Court of Appeals Reopens
Underground Storage Tank Cleanup Fund to Many Claimants
The California Underground Storage Tank Cleanup Fund (the Fund) provides money for cleanups of spills from underground petroleum tanks. This program is managed by the State Water Resources Control Board (the Board).
One of the requirements for eligibility to the Fund is that the claimant (usually the current owner) must show that the required operational permits were obtained for the tank in a timely manner. Such permits were first mandated in 1984; however, the permits were to be issued by local agencies, and many local agencies did not inform tank owners or start issuing permits for several years after the mandate.
In a large number of cases, tanks had been out of service for many years before the permit requirement became widely known. In other cases, the owners may not have been aware of either the existence of the tank or the permit requirements until just before the tank was removed. The statute governing the Fund allowed the Board to grant “permit waivers” to such applicants as long as the applicant did not know of the permit requirement before January 1, 1990, and met certain other requirements. From 1994 until 2004, such permit waivers were regularly and liberally granted.
Then, in 2004, the Board issued its decision in Matter of the Petition of Murray Kelsoe (WQO 2004-0015-UST) (the “Kelsoe Order”). In that decision, the Board reversed its practice, and stated that permit waivers could only be granted to excuse permit non-compliance that occurred before January 1, 1990. In other words, for any tank in the ground as of January 1, 1990: if the tank had not been permitted by that date, the owner and operator of the tank were permanently ineligible to receive money from the Fund for cleanup. The Kelsoe Order has been used by the Board to deny many people access to the Fund since then.
On July 20, 2007, the California Court of Appeals reversed the Kelsoe Order (Kelsoe v. California State Water Resources Control Board). The court called the Board’s position that permit waivers would not be granted to applicants who did not have a permit after January 1, 1990, “not reasonable” and pointed out that it was inconsistent with the State Board’s own regulations. Under the Court’s decision, anyone who owned or operated a tank that was in the ground as of January 1, 1990 can be eligible for a permit waiver if they can show that they were unaware of the permit requirement before that date. This returns the law to the way it was interpreted before 2004.
The Board has 60 days from the date of the decision to appeal to the California Supreme Court. However, if the decision stands, it will allow many people who were denied access to the Fund in the last several years to reapply. The Court of Appeals decision will be very helpful for the redevelopment of a large number of inner city properties contaminated by old tanks, where the Fund has been unavailable for the past three years.
Peter Niemiec |
