SB 0708 Ins. & Remedial Prog. For Above/Underground Storage Tanks
LR Number:L2724.07T Fiscal Note:2724-07
Committee:Corrections and General Laws
Last Action:07/12/96 - Signed by Governor
Title:HCS/SCS/SB 708
Effective Date:August 28, 1996
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Current Bill Summary

HCS/SCS/SB 708 - This act changes current law regulating underground storage tanks to regulations covering petroleum storage tanks. Liability and coverage remain essentially the same as in current law, except that "petroleum storage tanks", defined as above- or underground storage tanks used to contain petroleum, replaces "underground storage tanks". The name of the insurance fund from which moneys are paid for the costs of contamination cleanup is changed from the "Underground Storage Tank Insurance Fund" to the "Petroleum Storage Tank Insurance Fund".

A Board of Trustees is established to provide administration and fiduciary oversight of the fund. The board will consist of the Commissioner of the Office of Administration, the Director of the Department of Natural Resources (DNR), and the Director of the Department of Agriculture, or their designees. In addition, eight citizens appointed by the Governor, with the advice and consent of the Senate, will serve on the board. Of the appointed board members, one will represent a financial lending institution; one will represent the insurance underwriting industry; one will represent industrial or commercial users of petroleum; three will be owners or operators of retail petroleum storage tanks, including an owner of large tanks, an owner of small tanks, and one above-ground storage tank owner or operator; and two members will have no petroleum-related business interests. The trustees are to serve without compensation but will receive reimbursement for their actual and necessary expenses, and are required to meet at least quarterly. Staff resources for the insurance fund shall be provided by the DNR or another state agency as determined by the board. Reimbursement for staff resources shall be made from the fund pursuant to contracts negotiated between the board and the DNR or other state agency.

The act requires owners or operators of above-ground storage tanks in service on August 28, 1996 or brought into service after August 28, 1996 to remit $100 per tank to the DNR within 30 days of the effective date of this act or of the tank's initial use.

Current law allows the fund to provide moneys for the cleanup of contamination caused by releases, if the owner or operator was participating in or had applied for participation in the fund by August 28, 1995. This act changes the cut-off date to December 31, 1997, and provides that tanks coming into service after that date may apply to and participate in the fund. This act prohibits owners and operators of aboveground storage tanks from applying for participation in the fund before July 1, 1997. The costs of cleanup from releases caused by aboveground tanks taken out of use before December 31, 1997 will be covered by the fund, if the sites have been reported to the DNR before December 31, 1997. The fund will not cover expenses related to aboveground tanks incurred before July 1, 1997. The costs of cleanup from releases caused by underground tanks taken out of use before December 31, 1997 will be covered by the fund, if the sites have been reported to the DNR before December 31, 1997. Current law specifies that expenses related to underground tanks incurred before August 28, 1995 will not be covered by the fund.

Bids must be requested for actual remediation or cleanup work. The DNR will select a cost ceiling for competent and timely completion of the projected work, and will inform bidders of the cost ceiling. Bids are not required for costs associated with environmental consultants. However, the DNR may disapprove all or part of the costs if these are deemed excessive. Appeals of DNR disapproval of costs are made to the board.

Currently, a minimum fund balance of $8 million is required. This act requires that the board insure a minimum balance of $12 million. The board is to set surcharge rates on each transport load, up to $25 per transport load. The current surcharge rate is set at between $15 and $25 per transport load, which is defined as 8,000 gallons. This substitute also requires the board to establish procedures whereby those owning 50 or more petroleum tanks may pay required annual fees in installments.

Finally the act allows creditors to debtors with qualified properties to succeed the debtor in participating in the insurance fund, provided notice of the creditor's interest is given by certified mail to the insurance fund. The creditor may remedy any of the debtor's defaults in payments required by the insurance fund. Creditors must provide notice to the fund of any transfer of property with underground tanks by the creditor to a subsidiary or affiliate.