Utah's Management of Underground Storage Tanks Task Force has finished drafting a proposed new law to set up a state insurance system that would deal with leaking gasoline tanks.

The task force voted last week to send its bill to the Legislature's Interim Health Committee on Dec. 14. This committee will recommend for or against the bill when the Legislature meets next month.So far, Utah has spent $300,000 to clean up gasoline that seeped from an underground tank in Moab. The insurance would help pay the cost of cleanups or lawsuits, with individual gas stations protected up to a designated ceiling.

The bill, a response to federal requirements, was praised by Jim Peacock, president of the Utah Petroleum Association. But Paul Ashton, who represented small retail gasoline outlets, predicted it would cause many bankruptcies of gas stations.

The new law would be administered by the Utah Bureau of Solid and Hazardous Waste. Each owner or operator of an underground storage tank in use or closed after Jan. 1, 1974, must register it with the state.

The state will assess an annual fee from the owners or operators of underground storage tanks that are not closed. Members of the task force mentioned a fee in the range of $250 per tank per year, for the first three years, and $150 for the fourth year.

This money is to go into a Petroleum Storage Tank Fund, which will also include proceeds from penalties, plus money recovered by the state for corrective actions and investigations. The money is to earn interest, with the interest going into the account also.

The fund would finance investigation of suspected leaking tanks and for corrective actions performed by the owner or operator of a tank who is covered part of the fund.

The insurance would not pay for more than $975,000 in expenses for a single tank episode. The task force put a ceiling of $300,000 of this as a payment to a third-party claimant who sues, saying he has been harmed by a nearby leaking tank.

Costs beyond those levels would be passed along to the company responsible.

Other Western states have worked on such bills, Peacock said. But this one seems the most extensive attempt to meet federal requirements.

"This may well be rather a landmark bill," he said.

Ashton said "This thing creates a lot of fear in my people's minds." He called for the state to set up a system of low-interest loans to help "these little tiny guys."

He complained that many gas station owners purchased their stations from major oil companies, who had gas spills on the sites. Now the small operators have inherited the problem, he said.

He predicted that 60 percent of small operators would go out of business and vowed not to support the bill "one iota" until he knows the rules on cleaning up gasoline problems.

The problem is, the state isn't able to raise taxes to pay for the cleanups, he said. He said he is puzzled about how to solve the liability problem.

The task force agreed to recommend that state gasoline taxes be used to fund such projects. But for that to happen, they said, the Utah Constitution must be revised.

Sen. Fred Finlinson, R-Murray, chairman of the task force, said the proposed state insurance system will "only pass if everybody really gets together and works on it. My legal counsel still has very grave concerns about the position the state gets put in."

State Health Director Kenneth Alkema told the Deseret News there was a difference between this insurance system and the state's former insurance system for thrifts, which failed when the thrift industry collapsed.

The Industrial Loan Guaranty Corp. had seven members at the time of the thrift fiasco. In comparison, Alkema said 10,000 gas tanks throughout Utah would be assessed to fund the insurance system.