You should note where in the Code your question occurs. In this case I believe it turns out to be the seismic hydrodynamic hoop stress in section E.6.1.4.
When the seismic event occurs the tank shell will see additional hoop forces from the product sloshing. This additional force varies throughout the height of the product. The value Y specifies where you want to calculate this additional hoop force.
You will need to choose a number of Y locations so you can be certain that each ring of your tank is sufficiently thick to withstand the normal hydrostatic hoop forces plus these additional hydrodynamic hoop forces from seismic. You should probably pick the same locations used in your shell design (see either 5.6.3 or 5.6.4). Keep in mind the allowable stress increase in E.6.2.
