MICHIGAN — The state legislature worked with the Michigan Petroleum Association (MPA) and Bill Saad, the owner and CEO of Michigan Fuels, to develop a new law that creates the new Underground Storage Tank Cleanup Fund (USTCF).  

The USTCF is expected to save gas station owners and operators thousands of dollars a year. The new fund will eventually replace the need for owners of underground storage tanks to purchase costly tank insurance. 

Without the efforts of the MPA, this legislation would not have passed. Saad is encouraging more gas station owners and operators to become members of the MPA. 

“We need more members and people who are willing to get involved and work with the organization,” Saad said. “The dealers are really happy this law was passed. This is really going to help small business owners.” 

Gov. Snyder signed Senate Bill (SB) 791 on December 30, creating Public Act 416 of 2014.  This authorizes the creation of the USTCF, which in time will become a mechanism for owner/operators of underground storage tanks to use as a means of financial assurance and will be able to assist them in cleaning up releases at UST sites.

PA 416 starts the process of setting up the USTCF.  There is more work to be done and MPA anticipates this could take many months. The MPA indicated that it could take until October 1 before owners and operators can rely on the USTCF as a means of financial assurance.

Saad said the MPA has been working on creating such a law for about a decade. “Legislator really understood that this needed to be done,” he said, adding that the older tanks are the more difficult it is to get them insured. According to Saad, insurance companies will not insure tanks if they are more than 25 years old. 

“The older the tanks are the more you pay and sometimes this can be too much of a burden for gas station owners,” said Brian Mifsud of Michigan Fuels. 

He said the cost of purchasing new tanks can range from $15,000 to $20,000 a year and that some station owners have not been able to replace tanks and were forced to close down.

Mifsud also said that every year gas station owners and operators could spend upwards of $2,500 a year on tank insurance. 

To get the word out to owners and operators, Saad said meetings have been held with dealers. 

MPA is working with various departments in state government to move this process along as quickly as possible.  

“We have learned from the mistakes of the past and want to make sure we put this fund together the right way,” said Mark Griffin, MPA’s president.

The MPA is advising gas station owners and operators not to cancel their tank insurance at this time, or any other means of financial assurance that they had in place prior to December 30, like self-insurance. The EPA has not yet formally recognized the USTCF as a means of financial assurance, but indications are that it will at a future date.

Once the USTCF is fully up and running, MPA will tell its members that the USTCF is ready to provide their UST financial assurance needs and when they can cancel their tank insurance.