Underground Fuel Tank Compliance and Coverage Options

Montana Public School Districts Underground Fuel Tank Compliance & Coverage Options

~Matt Komac, Assistant Director of PC Pool Operations

If a Montana public school district has an underground fuel storage tank (UST), it is essential to maintain continuous State and Federal regulatory compliance to remain eligible for potential reimbursement through the Montana Petroleum Tank Release Cleanup Fund (PTRCF). 

Districts that are not compliant should strongly consider purchasing a stand-alone pollution liability insurance policy. Without compliance or insurance, a district may be unintentionally self-insuring a significant environmental and financial exposure.

Overview of the Petroleum Tank Release Compensation (PTRC) Board and Clean-Up Fund

The Petroleum Tank Release Compensation Board (Board) and the Petroleum Tank Release Cleanup Fund (Fund), established by the 1989 Montana Legislature, were created for the following: 

  • Provide adequate financial resources and effective procedures through which tank owners and operators may undertake, and be reimbursed for, cleanup of petroleum contamination and payment to third parties for damages caused by releases from petroleum storage tanks;
  • Assist tank owners and operators in meeting financial assurance requirements under state and federal law governing operation of petroleum storage tanks;
  • Assist in protecting public health and safety and the environment by providing assistance for cleanup of petroleum tank releases; and
  • Provide tank owners with incentives to improve petroleum storage tank facilities to minimize the likelihood of accidental releases.

Many school districts rely on the Montana PTRCF to address UST related risks.  However, eligibility for reimbursement always requires full regulatory compliance.

Regulatory Compliance Requirements

UST compliance requirements include, but are not limited to the following:

  • Proper tank registration and permitting;
  • Completion of required third-party inspections, with documentation submitted to the Montana Department of Environmental Quality (DEQ);
  • Licensed operators;
  • Ongoing maintenance, monitoring, and recordkeeping 

Additional regulatory guidance is available on the DEQ website at Underground Storage Tanks | Montana DEQ 

In the event of an accidental release: 

  • The UST must be in full regulatory compliance, and
  • DEQ must be notified immediately

Failure to meet compliance requirements may result in denial of reimbursement. Moreover, even when a claim is eligible, the PTRCF requires a co-payment, typically ranging from $5,000 to $17,500, depending on tank size. Districts should plan in advance for how this co-pay will be funded.

Coverage Options

While self-insurance is technically an option, it is generally not considered a practical or prudent choice for school districts.  As a result, districts typically choose one of the following approaches:

  1. Participation in the PTRCF, combined with a financial mechanism to address the required co-payment; or
  2. Purchase of a stand-alone pollution liability insurance policy that covers the co-pay or fully insures the exposure.

For any coverage option, a dedicated funding source is needed (e.g., a building reserve fund) to address the co-pay or the purchase a pollution liability insurance policy.

Tank Registration Requirements   

Districts must ensure that all underground tanks are registered with the Montana DEQ.  This requires completion of the Voluntary Registration Form: Microsoft Word - Form.1V.doc and submitted via email to the DEQ: DEQUSTProgram@mt.gov

Certificate of Financial Responsibility

After tank registration, districts must do the following:

  • Complete the Certificate of Financial Responsibility: CERTFR.pdf
  • Email it to the DEQ at DEQUSTProgram@mt.gov and
  • Copy Brett.Smith@mt.gov and the district’s UST inspector, if known.

Districts with questions or compliance concerns are encouraged to contact the DEQ directly: 

UST Program Section Supervisor
Seth Hendrix – 406.444.0485 | shendrix@mt.gov

Compliance Inspection Review
Brett Smith – 406.444.0485 | Brett.Smith@mt.gov

Above-Ground Storage Tanks (ASTs)

While above-ground fuel storage tanks are not subject to the same regulatory requirements as USTs, they still pose a pollution liability exposure. Districts should consider addressing this risk through a stand-alone pollution liability policy.

Final Reminder

To remain eligible for reimbursement through the PTRCF, school districts must maintain full compliance at all times. Non-compliance can result in significant uninsured financial exposure.

The MSGIA encourages districts to proactively evaluate their compliance status and reach out to their insurance provider if interested in a dedicated pollution liability policy. 

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Reference

“Petroleum Tank Release Compensation Board | Montana DEQ.” Mt.gov, 2026, deq.mt.gov/cleanupandrec/Programs/ptrcb. Accessed 19 Mar. 2026.