Audit says state overcollecting certain fuel tax

Monday, Nov. 13, 2000 | 10:51 a.m.

Under state law, the state Division of Environmental Protection is supposed to stop collecting a tax on fuel and heating oil when the fund hits $7.5 million and resume collections when it drops below $5 million at the end of any fiscal year.

At the end of June, the fund balance was $9.7 million, according to the Reno Gazette-Journal.

The Petroleum Trust Fund collects a $0.0075 tax on every gallon of gas, diesel fuel and heating oil sold in the state, or 7.5 cents for every 10 gallons sold.

The division ceased collecting the tax in September but auditors said the agency needs to do a better job of anticipating the fund's balance and stop the tax when the fund hits its limit.

Allen Biaggi, environmental division administrator, said this was the first time in its 10-year history that the fund has gone over its limit.

"Five years ago, we were in the opposite direction, there was not enough money to pay out," Biaggi said.

The money that comes into the fund varies from month to month, depending on how many tourists come into the state and buy gas and when commercial fuel tank owners send in their annual $100 tank enrollment fees, he said. Homeowners with heating oil tanks are automatically enrolled in the program and do not have to pay the annual fee.

The program pays 90 percent of the cost of cleaning up an underground fuel leak after the tank owner pays a $10,000 deductible. The program helps tank owners with the financial burden of cleaning up environmental problems that could otherwise bankrupt them.

"I can't think of another program in the state that has been as successful in cleaning up environmental problems," Biaggi said. "There have been hundreds and hundreds of cases addressed that would've contributed to groundwater problems.

"This fund has been a real godsend in assisting people getting things done."