Financial Assurance Program Frequently Asked Questions

Last updated April 17, 2024.

What is the purpose of the State Financial Assurance Program?

The State Financial Assurance Program is a financial responsibility mechanism. The program is intended to help owners and operators of petroleum underground storage tanks (USTs) comply with state and federal regulations. Through this program, PLIA will directly assist owners and operators of enrolled tanks with funds to pay for costs to address contamination and complete successful cleanups. Under certain conditions, the Program will also clean up leaks from non-enrolled tanks.

What is the difference between insurance and financial assurance?

PLIA’s assurance program will provide a funding option that meets federal and state financial responsibility requirements for owners and operators of USTs. This is similar to insurance which can also meet financial responsibility requirements depending on the individual policies. The main difference is the assurance program will be provided directly by the state, and insurance will be provided by private companies.

Will the Financial Assurance Program be a mandatory or voluntary program?

The new program is entirely voluntary.

Will PLIA be a direct provider with the State Financial Assurance Program? Will the Program replace private insurance?

Financial assurance is just one financial responsibility mechanism along with private insurance. Private insurers may continue to offer coverage, and PLIA encourages you to contact them directly about their coverage options. If a UST is both enrolled in the Financial Assurance Program and covered by private insurance, private insurance funds must be exhausted before Program funds can be used for cleanup of releases.

Is the State Financial Assurance Program separate from the Underground Storage Tank (UST) Loan & Grant Program?

Yes. The Financial Assurance Program will help UST owners and operators meet financial assurance requirements to ensure funding for cleanup. The UST Loan and Grant Program provides funding for cleanup and infrastructure upgrades for sites that are not registered for the Financial Assurance Program or have already exhausted available funds from insurance or assurance.

Will this program affect a Loan and Grant Program applicant’s position in line?

No. The UST Loan and Grant Program applicants will continue to maintain their position for funding.

Will petroleum UST owners and operators be required to register their tanks?

Yes. In order to receive financial assurance, a petroleum UST owner or operator must enroll their tanks in accordance with procedures established by PLIA and maintain compliance with Program eligibility requirements.

Who will be eligible to participate in the new program?

Any owner or operator of a regulated UST who is required to maintain financial responsibility to clean up releases is eligible to participate. Additional program requirements are being developed.

Can aboveground storage tanks be enrolled?

No. Aboveground storage tanks are not regulated and will not be a part of the Program.

Does this new program affect private homeowners?

No. Financial assurance is not applicable to residential heating oil tanks.

Will the Program cover releases that existed prior to the Financial Assurance Program’s implementation?

In some cases. For USTs enrolled in the Program, the cleanup of releases that occurred prior to the tank’s enrollment may be funded up to $1 million. Funding will be prioritized for leaks that threaten human health and the environment. For these historic releases, owners and operators who choose to receive this funding may be subject to cost recovery, and a lien on their property.

If a UST owner chooses to stay with a private insurer, would they still have access to historical release coverage for leaks prior to the start of private coverage if they later enroll in the Financial Assurance Program?

Yes. If a UST is covered by private insurance and has a leak, cleanup of that leak may be funded by the $1 million coverage for historical releases if the UST is later enrolled in the Financial Assurance Program. However, the owner or operator must first exhaust private insurance funds, and, as with cleanup of all historic releases, PLIA will seek to recover costs, and may place a lien on the property where the UST is located.

Will the state have a list of approved or preferred contractors for the removal and installation of USTs under the Financial Assurance Program, similar to its other programs? Or will the state contract directly with consultants and service providers?

PLIA will contract directly with primary contractors to perform cleanups funded by the Program and will pay contractors directly. Primary contractors will be assigned to sites, but there will be a process to allow owners and operators of enrolled USTs to change contractors.

Will PLIA reimburse costs already expended on cleanup?

No. All cleanup costs must be pre-approved by PLIA and should be performed by contractors hired by PLIA. There will be some exceptions for emergency cleanup procedures and cleanup costs incurred by another government agency and passed on to the owner or operator of the enrolled UST. Further information will be provided in the Program Guidance document once published.

What types of costs will be covered by Financial Assurance Program funds?

Cleanup of contaminated sites is the priority of the Program. It will cover costs of assessments and cleanup. It will also cover the replacement of some infrastructure and some surface features, such as asphalt.  Further information will be provided in the Program Guidance document once published.

Are third-party claims covered under the Program?

Yes. Third parties may apply to the Program for damages resulting from a release from an enrolled UST. However, cleanup of releases is the priority of the Program, and third-party claims must wait for any funds left following cleanup. Further information will be provided in the Program Guidance document once published.

How much is the annual enrollment fee?

PLIA is currently reviewing fee structure options.

What is the enrollment duration?

Enrollment in the Program will be for a 12-month period, renewing automatically.  Payment plans will be available, though owners and operators of enrolled USTs must pay the full enrollment fee within the 12-month enrollment term period. An owner or operator may request not to renew enrollment, but coverage will continue until the end of the enrollment period unless PLIA cancels enrollment.

Will PLIA have enforcement authority related to this program to help get sites get cleaned up?

No. PLIA is not an enforcement agency and does not have enforcement authority, which remains with the Washington Department of Ecology.

Will PLIA provide 24/7 emergency response under the new program?

Enrolled UST owners and operators must still contact the Department of Ecology’s Spills Program to report releases and for emergency responses.

How will this program impact tribal governments that own/operate gas stations? What about USTs located on federal, state, or local government property. Is there any impact to tanks owned by the federal government?

Tribal owners and operators of USTs will be eligible to participate in the program, as will owners and operators of USTs located on government property.

Will the Program include fee discounts or other incentives for UST owners and operators that follow best practices, agree to closer monitoring, or upgrade their equipment?

Incentives will be developed as part of the program planning process with the goal of preventing releases. Discounts will be available for enrolled tanks at the beginning of their second year of enrollment.

Will UST owners and operators be required to send financial assurance documentation to the Business Licensing Department?

PLIA anticipates Department of Licensing business requirements will remain the same after implementation of the Program. PLIA is coordinating with the Department to keep them up to date on the new program.

Other states have UST funds that allow reimbursement for past owners of petroleum USTs. Will this program be able to provide this type of reimbursement, or will it be strictly for current owners?

No. The Financial Assurance Program will not provide reimbursement to past owners of UST tanks.

Will there be a trial or adjustment period prior to full implementation?

There will not be a trial period prior to full implementation of the Financial Assurance Program. If PLIA deems that adjustments to the program are necessary after implementation, PLIA will explore options for making necessary changes.

Is there a timeline for the program to begin?

There is currently no firm start date for the program to begin. PLIA is continuing Rulemaking and establishing policies and procedures prior to implementation.

What additional steps are there prior to rule finalization? Are there more opportunities for public comment/engagement prior to implementation?

Drawing on the feedback from public listening sessions, PLIA created draft rule language that will be made available in late April. PLIA will then schedule virtual public comment hearings that the public can attend to provide comments or ask questions. During the public comment period, the public will also be able to provide written comments to rules@plia.wa.gov. When the public comment period is over, PLIA will then consider all feedback and finalize the rule.

PLIA will post announcements for public comment sessions on our Rulemaking and Public Engagement pages. We will also send out an email to those on our email distribution list to provide updates regarding rulemaking and public engagement opportunities. If you are interested in joining our email distribution list, please let us know through our online contact form, or email rules@plia.wa.gov.

During the cleanup process, will PLIA work with property owners to support continued activity and profitability of businesses?

Yes. PLIA will work with both the property owners and the contractors employed to perform cleanup work at a contaminated site in a way that will allow an existing business to continue operating, if possible.

If you have any questions about the State Financial Assurance Program, please contact us.