Is There a Red Tag in Your Future?
Red tags are bad for business. A red-tagged underground storage tank (UST) cannot be operated, which subsequently prevents fuel deliveries and dispensing—disrupting a key stream of revenue for businesses. If the current trend continues, the California State Water Resources Control Board (CSWRCB) predicts there will be close to 2,000 red-tagged tanks in California by Jan. 1, 2026, and an outreach program is currently in progress to notify stakeholders via the Single-Walled Underground Storage Tank Initiative.
If you have not started the process yet, it’s almost too late…almost. The clock is ticking and there is no time to waste for owners/operators (O/Os) to meet the deadline for compliance—or else face costly penalties and issues of funding for any otherwise eligible petroleum releases found during tank removal. Continue reading to learn more about how to avoid a red-tagged tank and financial help available to eligible small businesses.
On Sept. 25, 2014, California Governor Jerry Brown signed Senate Bill No. 445 (SB 445), which changed regulations regarding the design and construction of USTs. The law impacts tank O/Os with single-walled underground storage tanks (SWTs) and/or the connected piping, which do not have secondary containment and a continuous leak detection system. Based on data collected from over 1,000 SWT facilities by the CSWRCB through Oct. 1, 2020, approximately 30% of single-walled tanks have had releases of petroleum products into the environment. This higher risk of environmental impact is driving the regulatory agencies to motivate SWT O/Os to remove and/or upgrade these systems as soon as possible.
Tick, Tock, Tick, Tock
Regulations require the permanent closure of SWTs and piping by Dec. 31, 2025. The process of planning, permitting, choosing a tank removal contractor, and completion of the removal/upgrade process can take a significant amount of time—up to 12 months or more—and the availability of licensed tank removal contractors is a limiting factor in this process. Those who fail to meet the deadline and are found to be out of compliance with state regulations could be facing a red tag and a written directive to empty the non-compliant tank(s) no later than 48 hours after receiving the directive. The law also prohibits deposits of petroleum into a red-tagged UST system. Penalties for systems out of compliance are $500 to $5,000 per day per tank. The CSWRCB has created a Guidance Document [Local Guidance (LG) 171] to help O/Os navigate the closure statute and regulations.
I’m a small business owner/operator…how do I pay for this?
Given the potential costs of tank removal/upgrades, the State of California created the Replacing, Removing or Upgrading Underground Storage Tanks (RUST) Program. Please make note that this is not a reimbursement program, but rather a limited number of loans and grants are available each year to those small businesses who meet all eligibility requirements. Funding may also be available for removal of double-walled tanks/piping if they are being permanently removed and not replaced. The deadline to apply to the RUST program is Dec. 31, 2024, a full year in advance of the compliance deadline.
UST O/Os should be advised that upon UST removal, if a release is discovered, the responsible party may need to undertake corrective action (i.e., investigate and clean up the release). In order to ensure cleanup costs are covered upon discovery of a release, eligible O/O’s can file a claim application with the UST Cleanup Fund by Dec. 31, 2025. While a determination regarding eligibility, after filing, can be relatively quick, the process to remediate a release can be lengthy, therefore the time to act is now as Dec. 31, 2025 is also, currently, the final deadline to submit all costs for reimbursement. Don’t let the clock run out before you take action!
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