In a big win for the environmental remediation Industry, legislation has been signed into law by Governor Snyder that will financially incentivize more cleanups of leaking underground storage tanks (LUST). The legislation passed the Michigan Senate 26-10 earlier this month and passed the State House in June on a 61-46 vote. The legislation is now Public Act (PA) 134 of 2017 and takes effect immediately. The legislation, will allow owners/operators (O/O) to seek reimbursement for up to 50% of specific costs to clean up a legacy UST site.

The Michigan Underground Storage Tank Authority is tasked with assisting owners and operators of refined petroleum underground storage tanks (UST) in two important ways. The first is helping them meet their financial responsibilities regarding cleaning up releases from leaking underground storage tanks (LUSTs). The second is by providing financial assistance to remediate contamination caused by releases from LUSTs.

The money for this assistance comes from the Underground Storage Tank Cleanup Fund (USTCF). This Fund may be used to reimburse qualified owners and operators of leaking USTs for costs related to cleaning up a site. All refined petroleum products sold in Michigan are subject to an environmental protection regulatory fee, which is 7/8 of a cent per gallon of refined petroleum sold for resale or consumption in Michigan. The first $20.0 million of the revenue collected from this fee goes into the USTCF.

The Refined Petroleum Fund (RPF) finances the direct cleanup of contaminated underground storage tank (UST) sites considered to be “orphan sites”–sites for which there is no longer a liable party and the State will likely assume responsibility for remediation. Some people believe that money from the RPF should also should be used to reimburse owners and operators of USTs for UST compliance and cleanups. The bill does that for very specific instances. It also allows money in the Refined Petroleum Fund to be spent, upon appropriation, for the Legacy Release Program. Under this program, grants and loans would be made to facilitate brownfield development at property with LUSTs; the permanent closure of USTs, and reimbursement to local units of government and county road commissions for costs of corrective action in situations where regulated substances were left in a public highway.

The remaining revenue goes into the Refined Petroleum Fund for orphan sites and other purposes for which money in the Fund may be spent. The RPF currently has a surplus that is not being spent on orphan sites. It has been suggested that reimbursing owners or operators of LUSTs will allow them to focus on cleaning up other sites that require attention, creating work for environmental remediation firms in Michigan.

For Additional Information:

http://www.legislature.mi.gov/documents/2017-2018/billanalysis/Senate/pdf/2017-SFA-4583-A.pdf