Federal and state programs that oversee the Leaking Underground Storage Tanks program rely upon funding from the LUST Trust Fund, which is financed by a 1/10th penny per gallon of gasoline and diesel fuel sold. The program, established in 1986, is designed to ensure that all tank owners take appropriate means to prevent fuel from leaking into the environment. The Energy Policy Act of 2005 established new requirements for states and tank owners to ensure that all underground storage tanks are held to the same standards and to enhance compliance with federal regulations. These new requirements included, among others provisions:
- States must inspect every tank at least once every three years
- Every tank operator must be appropriately trained according to the individual’s level of responsibility
- The federal government, states and tribes must report the status of compliance of tanks within their jurisdiction, including those they own and operate
- Prohibits the delivery and/or receipt of product into an UST known to be non-compliant with UST regulations
To comply with these mandates, states require additional funding from the LUST Trust Fund. The Energy Policy Act of 2005 authorized significant resources from the LUST Trust Fund to help pay for these reforms, but this did not automatically send money to the states. NACS has worked aggressively to increase the LUST funding level and has successfully secured an increase of nearly 60% above traditional appropriations. Funding for fiscal year 2010 totaled $113.1 million. The LUST Trust Fund excise tax is scheduled to expire September 30, 2011.
In related developments, EPA has initiated a regulatory review process to evaluate existing regulations. EPA has solicited input from a wide variety of interested stakeholders, including tank owners.
As states struggle to comply with the new federal mandates, absent additional federal funding they are likely to either abandon their programs, leaving retailers subject to federal enforcement, or impose additional fees on tank owners within their borders. If the excise tax expires, resources available to the states will be more constrained.
NACS is advocating that Congress extend the LUST Trust Fund excise tax, extend the authorized uses of Trust Fund appropriations and increase appropriations to the states.
Due to the budget constraints, on July 19, 2011, the House appropriations committee set funding for FY2012 at $105.7 million. The Senate has not yet acted.
As of September 9, 2011, it was unclear if Congress would extend the LUST Excise Tax and EPA had taken no further action on its regulatory review.