by Jeri Gray,
Water Resources Research Institute of the University of North Carolina
Reprinted from WRRI News, Number 348, July/August 2004

1988 General Assembly passed H 1304 establishing two funds (Commercial and Noncommercial) for reimbursing eligible UST owners, operators and landowners for costs of cleanup and third party liability claims. Required tank owners to pay tank operating fees of $30 for tanks of 3,500 gallons or less and $50 for larger tanks and directed tank fees to the commercial fund. Required tank owners to demonstrate financial responsibility of $100,000.

1989 General Assembly passed H 957 applying one-half cent of the kerosene and motor fuel inspection tax to the tank funds, raising tank fees to $45 and $75, setting deductibles at $50,000 for cleanup and $100,000 for third party damages and requiring demonstration of financial responsibility for those amounts.

1991 General Assembly passed H 1222 raising tank operating fees to $100 and $150, establishing the N.C. Petroleum Underground Storage Tank Funds Council, establishing the Groundwater Protection Loan Fund to help tank owners upgrade tanks, and applying one-half cent per gallon of the gasoline excise tax to the three funds.

1992 General Assembly passed S 1169 that gave landowners not responsible for tanks access to the commercial fund.

1993 North Carolina Environmental Management Commission approved changes to groundwater cleanup rules providing that where no threat to human health or the environment exists, cleanup may be based on "natural remediation." The State Auditor released a report saying that without additional cost containment measures the solvency of the state's Commercial LUST Trust Fund would be in jeopardy. The report also revealed frequent shoddy work by individuals and businesses that install and remove tanks leading to leaks from new tanks and residual contamination at closed sites.

1995 General Assembly passed S 1012 directing the EMC to adopt rules for risk-based assessment and cleanup of discharges and releases from USTs and prohibited reimbursement from the funds for cleanup of sites that do not pose an unacceptable level of risk. It also required operating permits for USTs, prohibited placement of petroleum product into a UST that does not have an operating permit, and provided for civil and criminal penalties for violating the prohibition and various other UST regulations. Because of the immediate need to staunch the flow of money from the commercial fund, the EMC passed temporary rules that partially implemented riskbased corrective action.

1996 General Assembly passed S 1317 requiring DENR to immediately classify all known discharges according to risk criteria specified in the bill until such time as risk-based cleanup rules were adopted by the EMC and to deny reimbursement from the fund for discharges posing no risk. The legislation required the EMC to adopt a permanent riskbased rule by October 1997.

1997 General Assembly passed S 114 prohibiting DENR from requiring cleanup of any LUST site that had been classified as CDE (low risk) under requirements of S 1317 and requiring the EMC to adopt a temporary rule to put risk-based assessment and cleanup into place by Sept 1997. In Sept 1997, the EMC adopted temporary risk-based assessment and cleanup rules that became effective Jan 1, 1998. In Oct 1997, the EMC adopted permanent risk-based rules.

2001 General Assembly passed H 1063 providing for the voluntary use of pay-for-performance cleanups.

2003 General Assembly passed H 897 to require that cleanups be pre-approved by DENR and that payments from the funds be limited to that necessary to achieve the most cost-effective cleanup that addresses imminent threats to human health and the environment. Required that DENR consider the availability of funds in the Commercial Fund in establishing a schedule for assessment and cleanup of sites that will be paid for from the fund.

2004 In the 2004 appropriations act (H 1414) the General Assembly increased the amount of gasoline excise tax going to the trust funds to one and one-tenth cents a gallon for one year. The legislation also prohibits DENR from pre-approving any cleanup costs unless money will be available in the funds to pay the claim within 90 days of approval.