Nevada-specific: Petroleum Fund

Introduction

Federal underground storage tank (UST) regulations require UST owners and operators to demonstrate the ability to pay for cleanup or third-party liability compensation from a UST release. Federal funds like the Leaking Underground Storage Tank (LUST) Trust Fund help when it comes to UST financial responsibility by providing money related to cleanups. But states may have their own funds for storage tanks as well. Nevada is one of those states. They have the State of Nevada Petroleum Fund (Fund). This Fact File explains background on the Fund, enrollment requirements, and coverage.

Background

The Fund was first implemented in 1989. The Fund is administered by the Nevada Division of Environmental Protection (NDEP). It was set up by state legislation to help owners and operators of regulated underground storage tanks in meeting the federal requirement for financial responsibility, pursuant to Code of Federal Regulations (CFR) 40 CFR 280. The Fund also allows voluntary enrollment of non-regulated petroleum storage tanks.

Fund enrollment

To enroll a UST in the Nevada Petroleum Fund, an owner or operator must:

• Create an account with NDEP using the online database system, Nevada Environmental Activities;
• Submit an Environmental Protection Agency (EPA) 7530-1 form (Notification for Underground Storage Tanks) to the compliance branch using the online database system;
• Submit an enrollment request form using the online database system;
• Pay the annual $100 per tank fee; and
• Give documentation showing the tanks and lines of each system are not leaking at the time of enrollment.

Once enrolled, the owner or operator must pay the recurring enrollment fee of $100 per tank, per year. These invoices are generated in August and fees are due by October 1st.

Except for Marina aboveground storage tanks (ASTs), AST systems in Nevada are not federally or state regulated. However, you can voluntarily enroll ASTs that are 30,000 gallons or less into the Fund. The Fund enrollment process is the same for USTs but note that enrollment will begin 6 months from the moment the enrollment payment is received by NDEP for a new AST or an AST system that has lapsed enrollment. During the temporary 6-month period, the owner or operator must:

• Start monthly visual inspections of the tank systems and record the inspections on the AST Inspection Form.
• Hire a certified tester to tightness test any underground distribution piping associated with the AST.
• If underground distribution piping is made of steel, a corrosion protection system must be installed and tested before enrollment.

Upon completion of the 6-month interim, the owner or operator may have to give the following:

• Evidence of the visual AST system inspections
• If relevant, the passing proof of tightness testing for underground piping
• If relevant, corrosion testing for underground piping

Fund coverage

If you have full coverage, the Fund will pay up to $1 million less a 10 percent applicable co-payment for each leaking regulated tank system. So, for a single tank with full coverage of $1 million your share will be $100,000, paid in 10 percent increments with each claim. NDEP can advise that coverage be reduced by up to 40 percent if you do not comply with applicable state and federal regulations. NDEP will not cover releases:

• For tanks not enrolled with the Fund at the time of release discovery
• Due to product overfills and spills
• Due to negligence
• That were deliberate
• Happening above the shear valve, located at the base of the above-ground product dispenser

The Fund only reimburses for qualified activities approved by your implementing regulatory agency that are over $5,000 per UST system. The Fund also does not pay for costs related to identification of the release source.

Applicable laws & regulations

40 CFR 280 – Technical Standards and Corrective Action Requirements for Owners and Operators of Underground Storage Tanks (UST)

NRS 445C – Environmental Requirements; Cleanup of Discharged Petroleum

Related definitions

“Petroleum” means crude oil or any fraction thereof which is liquid at 60 degrees Fahrenheit and a pressure of 14.7 pounds per square inch absolute.

“Regulatory agency” means 1. The State Environmental Commission; 2. The State Department of Conservation and Natural Resources or the Division of Environmental Protection of that Department; 3. A district board of health acting as a solid waste management authority; or 4. A district board of health, county board of health, or board of county commissioners administering a program for the control of air pollution pursuant.

“Underground storage tank” means a tank and any underground piping connected to the tank containing at least 10 percent of its combined volume underground.

Keys to remember

If you happen to sell your facility the new owner is NOT automatically enrolled. They must enroll the facility with the Fund themselves. If you pay late one year or forget to enroll you are NOT enrolled in the Fund. If your enrollment lapses, you can be re-enrolled into the Fund only after you: remit the $100 tank registration fee to the Fund and submit NDEP-approved documentation that the tank and product lines are not presently leaking. Keep in mind that a 20 percent decrease to Fund coverage may be applied to UST systems for which a release is discovered during the same fiscal year a lapse in enrollment takes place.

Real world example

As of the beginning of 2022, more than 1,580 cases have been covered by the Fund for reimbursement of cleanup costs associated with leaks or accidental releases from petroleum storage tanks. And the Fund has provided more than $249 million towards the cleanup of petroleum releases in Nevada. The Fund can help you save a lot of money when it comes to petroleum releases if you are properly enrolled. Remember that paying a little now towards the Fund can limit the chance of paying too much when disaster strikes.