Connecticut Regulators Propose to End UST Fund

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Connecticut Regulators Propose to End UST Fund


HARTFORD, Conn. -- Nearly two months after the U.S. Environmental Protection Agency warned Connecticut that it could cease to recognize the state's Underground Storage Tank Fund, the Department of Energy and Environmental Protection (DEEP) has proposed closing the fund entirely, according to the Hartford Business Journal.

If Senate Bill 375 is approved, the fund would be phased out by 2014 and gas station owners would receive only a fraction of the reimbursed funds the state currently owes them.

The program, which was launched in 1991 after Congress enacted stricter regulation of leaking underground fuel tanks, was meant to serve as an alternative resource for gas station owners who could not get private insurance to cover their liabilities. In its early years, the fund received $10 million annually, but after Connecticut directed its gross receipts tax to other areas of the budget, the amount meant to assist businesses dipped as low as $250,000.

The fund currently owes station owners $17 million in unpaid approved claims, as well as an additional $81.6 million in pending claims, although DEEP spokesman Dennis Schain stated that this amount is usually reduced during the approval process. Businesses that own more than four gas stations, which reportedly make up more than 97 percent of claimants, would receive 20 cents on the dollar or less for their approved or pending claims.

Without the fund, gas station owners would have to acquire private insurance to cover the cost of fuel spills, something that the Independent Connecticut Petroleum Association (ICPA) predicted could force one-third to half of the state's 1,480 stations to close.

"It is unacceptable," said ICPA President Gene Guilford. "The state has an obligation, as uncomfortable as that is. That obligation needs to be paid."

Connecticut plans to stop accepting new applications from businesses with more than 100 gas stations as of Oct. 1, 2012, and stop accepting new applications from businesses that operate between four and 99 stations as of Oct. 1, 2013. Small businesses that operate three stations or fewer, and property owners near gas stations, receive 100-percent reimbursement and can submit new applications through Oct. 1, 2014.