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Three States Move to Expand Propane Tank Setbacks Near Schools, Raising Industry Alarms

By Bill StompPropane Insider2 min read

Proposed legislation in New York, California, and Illinois is drawing sharp attention from the propane industry after lawmakers introduced nearly identical bills that would significantly expand required setback distances for propane storage tanks located near schools and daycare facilities.

Three States Move to Expand Propane Tank Setbacks Near Schools, Raising Industry Alarms

Proposed legislation in New York, California, and Illinois is drawing sharp attention from the propane industry after lawmakers introduced nearly identical bills that would significantly expand required setback distances for propane storage tanks located near schools and daycare facilities. The proposals would increase minimum setback requirements from 25 feet to 75 feet in qualifying areas, a change industry groups say is not supported by incident data and could disrupt thousands of commercial accounts in both urban and suburban zones.

Coordinated Legislation Raises Questions

The bills — New York S.4891, California AB-2217, and Illinois HB-3304 — contain nearly identical language, prompting industry observers to suggest a coordinated model-policy approach rather than independent state drafting. If enacted, the measures would apply to propane tanks located within 500 feet of schools or childcare facilities, effectively expanding restricted placement zones in densely populated areas where businesses often operate close to educational buildings. For propane marketers, the concern is not only the expanded setback itself, but the lack of a transition period for existing installations that could fall out of compliance under the new rules.

Industry Groups Cite Lack of Incident Data

Propane industry organizations argue that the proposed changes are not supported by historical safety data. According to industry safety databases referenced by various trade groups, there have been no documented incidents involving propane tanks near schools under the current 25-foot setback standard over the past two decades.

That record is now central to the industry’s opposition, with groups such as the National Propane Gas Association and the Propane Education & Research Council pointing to the absence of school-related propane incidents as evidence that existing standards are working effectively.

Thousands of Commercial Accounts Could Be Affected

Beyond residential infrastructure, the proposed setback changes could impact a wide range of commercial customers operating near schools. Industry estimates suggest that more than 2,000 commercial accounts across the three states could fall within the expanded setback zone. These include restaurants, laundromats, small retailers, and community facilities that rely on propane service in densely developed areas.

Amber marks the 8 states whose LP-gas licensing law still names CETP by name.

States naming CETP in law: Georgia, Idaho, Kansas, Louisiana, Maryland, Missouri, Utah, West Virginia.

For some propane marketers, this could translate into significant revenue exposure if tanks must be relocated, modified, or removed entirely to comply with new distance requirements. In highly concentrated service territories, even a small percentage of affected accounts could represent meaningful annual revenue loss and operational disruption.

Broader Policy Implications for the Industry

Propane operators and industry analysts are also watching the legislation closely for its potential to spread beyond the initial three states. Because the bills share similar structure and language, some in the industry believe they may represent a broader policy template that could be introduced in additional states if any one measure is passed. That possibility has increased urgency around legislative engagement efforts, particularly during committee hearings scheduled in all three states over the coming months.

Industry Response Focused on Safety Record

Opponents of the bills are emphasizing long-standing safety performance data and existing federal standards, including NFPA 58 requirements governing propane storage and tank placement. Industry representatives argue that current regulations already establish a strong safety framework and that additional setback increases may not deliver measurable safety improvements while still imposing significant logistical and financial burdens on businesses.

The discussion has also highlighted the role of local engagement, with propane companies encouraged to provide testimony and share operational data with lawmakers to help contextualize the impact of the proposed changes.