Gov. Rendell this week withdrew a Department of Insurance regulation that would have almost doubled the per gallon fee on gasoline to support underground storage tank cleanups.

"While I appreciate the board's intent to ensure the solvency of the fund, given the cost of gas at the pump and the fact that there is no insolvency issue confronting the fund in the short term, I think the action was ill-advised,” Gov. Rendell said. "As such, I have directed the Department of Insurance to withdraw the fee increase regulation."

The Department of Insurance representative on the Underground Storage Tank Indemnification Board formally proposed the increase of the fee from $.011 to $.02 per gallon, which would generate about $45 million annually.

The final-omitted regulation containing the fee increase, which is not subject to public comment, was submitted to the Independent Regulatory Review Commission and was set to consider the regulation December 6.

“The Governor has taken the correct step by recalling the proposal to impose a 1-cent increase in Pennsylvania’s gas tax to bolster the USTIF,” said Sen. Don White (R-Indiana), Chair of the Senate Insurance Committee. “At a time when consumers are being hit hardest at the gas pump by ever-increasing prices, the last thing the Administration needs to do is to increase this burden by imposing any increase in Pennsylvania’s gas tax.

“The severity of the fiscal crisis facing the USTIF fund is not completely clear, but in any event the potential deficit is something that could occur many years in the future. Even a study commissioned by the USTIF board states “ ... no change in fees is necessary as the projection shows USTIF having positive Cash and Invested Assets through the middle of the July 1, 2015-2016 fiscal year.”

Milliman, the actuarial firm, reported to the Underground Storage Tank Indemnification Board on September 21 that, “On September 29, 2003, the Board established an objective of having positive Cash and Invested Assets for a projection period of at least five years. Based on this criterion, no change in fees is necessary as the project shows USTIF having positive Cash and Invested Assets through the middle of the July 1, 2015-2016 fiscal year.”

NewsClips: Rendell Kills Proposed Penny Per Gallon Gasoline Tax

PA Fund May Squeeze Extra Cent Per Gallon

Another Penny Per Gallon Could Trickle Down to Pumps in PA

11/30/2007