California Storage Tank Regulation 

California Senate Bill (SB) 445 (Stats. 2014, Ch.547) changed underground storage tank regulatory requirements, which have been reflected in California Health and Safety Code, chapter 6.7 (H&SC), section 25292.05. This change requires that on or before December 31, 2025, all single-walled underground storage tanks that contain a hazardous substance (including petroleum products) must be closed or removed.

The U.S. EPA reports that states and territories have been submitting information about their UST programs since 1988. As of September 2022:
-568,981 confirmed releases have been reported;
-555,985 cleanups have been initiated; and
-509,091 cleanups have been completed.

How will this impact your business?
Insurance carriers that offer storage tank liability insurance are aware of this requirement change and will potentially decline to offer coverage for tanks over a certain age (~20 years) and that are single walled. It is estimated that over 2,000 tanks are subject to this requirement.

Many clients take advantage of environmental insurance for maintaining financial assurance in accordance with registration guidelines in most states and territories. Regulators want to make sure that owners/operators have the financial wherewithal to conduct clean-ups in the event tanks have leaked. Many independent studies in the past 20 years have indicated the cost to clean up a leaking underground storage tank is about $100,000 to $150,000.

How to apply for public funding
Penalties for systems out of compliance levied by the State of California are $500 to $5,000 per day per underground storage tank. Public loans and grants are available through the California Replacing, Removing, or Upgrading Underground Storage Tanks (RUST) Program and can assist eligible firms with any costs associated with removal, replacement or retrofitting of existing single-walled USTs. RUST grants are limited and should be taken advantage of expeditiously.

If a release is discovered during removal, the owner/operator may need to undertake certain remedial actions to investigate and clean up the release. Filing a claim application with the UST Cleanup Fund, completing the mitigation measures and receiving reimbursement can be an involved and lengthy process. The cut-off for the UST Cleanup Fund to receive applications is December 31, 2024.

Both the State of California Waterboard UST Leak Prevention Unit and the United States Environmental Protection Agency have engaged contractors to conduct training and outreach programs to make businesses aware of this looming deadline.