1.1                          A bill for an act 
  1.2             relating to the environment; modifying provisions 
  1.3             relating to petroleum tank release cleanup; amending 
  1.4             Minnesota Statutes 2000, sections 115C.07, subdivision 
  1.5             3; 115C.09, subdivisions 1, 2a, 3, and 3h; 115C.093; 
  1.6             115C.112; and 115C.13; repealing Minnesota Statutes 
  1.7             2000, sections 115C.02, subdivisions 11a and 12a; 
  1.8             115C.082; 115C.09, subdivision 3g; 115C.091; and 
  1.9             115C.092. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 2000, section 115C.07, 
  1.12  subdivision 3, is amended to read: 
  1.13     Subd. 3.  [RULES.] (a) The board shall adopt rules 
  1.14  regarding its practices and procedures, the form and procedure 
  1.15  for applications for compensation from the fund, procedures for 
  1.16  investigation of claims and specifying the costs that are 
  1.17  eligible for reimbursement from the fund.  
  1.18     (b) By January 1, 1994, the board shall publish proposed 
  1.19  rules establishing a fee schedule of costs or criteria for 
  1.20  evaluating the reasonableness of costs submitted for 
  1.21  reimbursement.  The board shall adopt the rules by June 1, 1994. 
  1.22     (c) The board may adopt rules requiring certification of 
  1.23  environmental consultants. 
  1.24     (d) (c) The board may adopt other rules necessary to 
  1.25  implement this chapter. 
  1.26     Sec. 2.  Minnesota Statutes 2000, section 115C.09, 
  1.27  subdivision 1, is amended to read: 
  2.1      Subdivision 1.  [REIMBURSABLE COSTS.] (a) The board shall 
  2.2   provide reimbursement to eligible applicants for reimbursable 
  2.3   costs.  
  2.4      (b) The following costs are reimbursable for purposes of 
  2.5   this chapter:  
  2.6      (1) corrective action costs incurred by the applicant and 
  2.7   documented in a form prescribed by the board, except the costs 
  2.8   related to the physical removal of a tank; and 
  2.9      (2) costs that the responsible person is legally obligated 
  2.10  to pay as damages to third parties for bodily injury, property 
  2.11  damage, or corrective action costs incurred by a third party 
  2.12  caused by a release where the responsible person's liability for 
  2.13  the costs has been established by a court order or 
  2.14  court-approved settlement;. 
  2.15     (3) up to 180 days worth of interest costs associated with 
  2.16  the financing of corrective action and incurred by the applicant 
  2.17  in a written financing contract signed by the applicant and 
  2.18  executed after May 25, 1991.  Interest costs are not eligible 
  2.19  for reimbursement to the extent they exceed two percentage 
  2.20  points above the adjusted prime rate charged by banks, as 
  2.21  defined in section 270.75, subdivision 5, at the time the 
  2.22  financing contract was executed; and 
  2.23     (4) preremoval site assessment costs incurred by the 
  2.24  applicant and eligible for reimbursement under section 115C.092. 
  2.25     (c) A cost for liability to a third party is incurred by 
  2.26  the responsible person when an order or court-approved 
  2.27  settlement is entered that sets forth the specific costs 
  2.28  attributed to the liability.  Except as provided in this 
  2.29  paragraph, reimbursement may not be made for costs of liability 
  2.30  to third parties until all eligible corrective action costs have 
  2.31  been reimbursed.  If a corrective action is expected to continue 
  2.32  in operation for more than one year after it has been fully 
  2.33  constructed or installed, the board may estimate the future 
  2.34  expense of completing the corrective action and, after 
  2.35  subtracting this estimate from the total reimbursement available 
  2.36  under subdivision 3, reimburse the costs for liability to third 
  3.1   parties.  The total reimbursement may not exceed the limit set 
  3.2   forth in subdivision 3. 
  3.3      Sec. 3.  Minnesota Statutes 2000, section 115C.09, 
  3.4   subdivision 2a, is amended to read: 
  3.5      Subd. 2a.  [APPLICATION FOR REIMBURSEMENT.] (a) The board 
  3.6   may consider Applications for reimbursement may be submitted for 
  3.7   consideration by the board at the following stages:  
  3.8      (1) after the commissioner approves corrective actions 
  3.9   related to soil excavation and treatment or after the 
  3.10  commissioner determines that further soil excavation and 
  3.11  treatment should not be done. costs have been incurred, and the 
  3.12  associated tasks completed, for excavation basin soil sampling, 
  3.13  excavation of contaminated soil, treatment of contaminated soil, 
  3.14  or remedial investigation costs tasks such as soil borings 
  3.15  boring drilling, monitoring wells well installation, vapor risk 
  3.16  assessment, and well searches are reimbursable at this stage, 
  3.17  but groundwater receptor survey; corrective action costs 
  3.18  relating to the construction and installation of a comprehensive 
  3.19  corrective action design system are not reimbursable at this 
  3.20  stage; and 
  3.21     (2) after costs have been incurred, and the associated 
  3.22  tasks completed, for tasks related to the construction and 
  3.23  installation of a comprehensive corrective action design system, 
  3.24  but only if the commissioner approves has approved a 
  3.25  comprehensive plan for corrective action that will adequately 
  3.26  address the entire release, including groundwater contamination 
  3.27  if necessary, for corrective action costs related to the 
  3.28  construction and installation of a comprehensive corrective 
  3.29  action design system.  
  3.30     (b) An applicant shall not submit an application for 
  3.31  reimbursement more frequently than four times per 12-month 
  3.32  period unless the application is for more than $2,000 in 
  3.33  reimbursement. 
  3.34     (b) (c) The commissioner shall review a plan, and provide 
  3.35  an approval or disapproval to the applicant and the board, 
  3.36  within 60 days in the case of a plan submitted under paragraph 
  4.1   (a), clause (1), and within 120 days in the case of a plan 
  4.2   submitted under paragraph (a), clause (2), or the commissioner 
  4.3   shall explain to the board why additional time is necessary.  
  4.4   The board shall consider a complete initial application within 
  4.5   60 days of its submission of the application under paragraph 
  4.6   (a), clause (1), and shall consider a complete supplemental 
  4.7   application within 120 days of its submission of the application 
  4.8   under paragraph (a), clause (2), or the board shall explain for 
  4.9   the record why additional time is necessary.  For purposes of 
  4.10  the preceding sentence, board consideration of an application is 
  4.11  timely if it occurs at the regularly scheduled meeting following 
  4.12  the deadline.  Board staff may review applications submitted to 
  4.13  the board at the same time the commissioner considers the 
  4.14  appropriateness of the corrective action, but the board may not 
  4.15  act on the application until after the commissioner's approval 
  4.16  is received. 
  4.17     (c) (d) A reimbursement may not be made unless the board 
  4.18  determines that the commissioner has determined that the 
  4.19  corrective action was appropriate in terms of protecting public 
  4.20  health, welfare, and the environment. 
  4.21     Sec. 4.  Minnesota Statutes 2000, section 115C.09, 
  4.22  subdivision 3, is amended to read: 
  4.23     Subd. 3.  [REIMBURSEMENTS; SUBROGATION; APPROPRIATION.] (a) 
  4.24  The board shall reimburse from the fund 90 percent of the total 
  4.25  reimbursable costs incurred at the site to an eligible applicant 
  4.26  from the fund in the following amounts:.  However, the board may 
  4.27  reimburse an eligible applicant from the fund for greater than 
  4.28  90 percent of the total reimbursable costs, if the applicant 
  4.29  previously qualified for a higher reimbursement rate.  
  4.30     (1) 90 percent of the total reimbursable costs on the first 
  4.31  $250,000 and 75 percent on any remaining costs in excess of 
  4.32  $250,000 on a site; 
  4.33     (2) for corrective actions at a residential site used as a 
  4.34  permanent residence at the time the release was discovered, 92.5 
  4.35  percent of the total reimbursable costs on the first $100,000 
  4.36  and 100 percent of any remaining costs in excess of $100,000; or 
  5.1      (3) 90 percent of the total reimbursable costs on the first 
  5.2   $250,000 and 100 percent of the cumulative total reimbursable 
  5.3   costs in excess of $250,000 at all sites in which the 
  5.4   responsible person had interest, and for which the commissioner 
  5.5   has not issued a closure letter as of April 3, 1996, if the 
  5.6   responsible person dispensed less than 1,000,000 gallons of 
  5.7   petroleum at each location in each of the last three calendar 
  5.8   years that the responsible person dispensed petroleum at the 
  5.9   location and: 
  5.10     (i) has owned no more than three locations in the state at 
  5.11  which motor fuel was dispensed into motor vehicles and has 
  5.12  discontinued operation of all petroleum retail operations; or 
  5.13     (ii) has owned no more than one location in the state at 
  5.14  which motor fuel was dispensed into motor vehicles.  Not more 
  5.15  than $1,000,000 may be reimbursed for costs associated with a 
  5.16  single release, regardless of the number of persons eligible for 
  5.17  reimbursement, and not more than $2,000,000 may be reimbursed 
  5.18  for costs associated with a single tank facility. 
  5.19     (b) A reimbursement may not be made from the fund under 
  5.20  this chapter until the board has determined that the costs for 
  5.21  which reimbursement is requested were actually incurred and were 
  5.22  reasonable. 
  5.23     (c) When an applicant has obtained responsible competitive 
  5.24  bids or proposals according to rules promulgated under this 
  5.25  chapter prior to June 1, 1995, the eligible costs for the tasks, 
  5.26  procedures, services, materials, equipment, and tests of the low 
  5.27  bid or proposal are presumed to be reasonable by the board, 
  5.28  unless the costs of the low bid or proposal are substantially in 
  5.29  excess of the average costs charged for similar tasks, 
  5.30  procedures, services, materials, equipment, and tests in the 
  5.31  same geographical area during the same time period. 
  5.32     (d) When an applicant has obtained a minimum of two 
  5.33  responsible competitive bids or proposals on forms prescribed by 
  5.34  the board and where the rules promulgated under this chapter 
  5.35  after June 1, 1995, designate maximum costs for specific tasks, 
  5.36  procedures, services, materials, equipment and tests, the 
  6.1   eligible costs of the low bid or proposal are deemed reasonable 
  6.2   if the costs are at or below the maximums set forth in the rules.
  6.3      (e) Costs incurred for change orders executed as prescribed 
  6.4   in rules promulgated under this chapter after June 1, 1995, are 
  6.5   presumed reasonable if the costs are at or below the maximums 
  6.6   set forth in the rules, unless the costs in the change order are 
  6.7   above those in the original bid or proposal or are 
  6.8   unsubstantiated and inconsistent with the process and standards 
  6.9   required by the rules. 
  6.10     (f) A reimbursement may not be made from the fund in 
  6.11  response to either an initial or supplemental application for 
  6.12  costs incurred after June 4, 1987, that are payable under an 
  6.13  applicable insurance policy, except that if the board finds that 
  6.14  the applicant has made reasonable efforts to collect from an 
  6.15  insurer and failed, the board shall reimburse the applicant. 
  6.16     (g) If the board reimburses an applicant for costs for 
  6.17  which the applicant has insurance coverage, the board is 
  6.18  subrogated to the rights of the applicant with respect to that 
  6.19  insurance coverage, to the extent of the reimbursement by the 
  6.20  board.  The board may request the attorney general to bring an 
  6.21  action in district court against the insurer to enforce the 
  6.22  board's subrogation rights.  Acceptance by an applicant of 
  6.23  reimbursement constitutes an assignment by the applicant to the 
  6.24  board of any rights of the applicant with respect to any 
  6.25  insurance coverage applicable to the costs that are reimbursed.  
  6.26  Notwithstanding this paragraph, the board may instead request a 
  6.27  return of the reimbursement under subdivision 5 and may employ 
  6.28  against the applicant the remedies provided in that subdivision, 
  6.29  except where the board has knowingly provided reimbursement 
  6.30  because the applicant was denied coverage by the insurer. 
  6.31     (h) Money in the fund is appropriated to the board to make 
  6.32  reimbursements under this chapter.  A reimbursement to a state 
  6.33  agency must be credited to the appropriation account or accounts 
  6.34  from which the reimbursed costs were paid. 
  6.35     (i) The board may reduce the amount of reimbursement to be 
  6.36  made under this chapter if it finds that the applicant has not 
  7.1   complied with a provision of this chapter, a rule or order 
  7.2   issued under this chapter, or one or more of the following 
  7.3   requirements: 
  7.4      (1) the agency was given notice of the release as required 
  7.5   by section 115.061; 
  7.6      (2) the applicant, to the extent possible, fully cooperated 
  7.7   with the agency in responding to the release; 
  7.8      (3) the state rules applicable after December 22, 1993, to 
  7.9   operating an underground storage tank and appurtenances without 
  7.10  leak detection; 
  7.11     (4) the state rules applicable after December 22, 1998, to 
  7.12  operating an underground storage tank and appurtenances without 
  7.13  corrosion protection or spill and overfill protection; and 
  7.14     (5) the state rule applicable after November 1, 1998, to 
  7.15  operating an aboveground tank without a dike or other structure 
  7.16  that would contain a spill at the aboveground tank site. 
  7.17     (j) The reimbursement may be reduced as much as 100 percent 
  7.18  for failure by the applicant to comply with the requirements in 
  7.19  paragraph (i), clauses (1) to (5).  In determining the amount of 
  7.20  the reimbursement reduction, the board shall consider: 
  7.21     (1) the reasonable determination by the agency that the 
  7.22  noncompliance poses a threat to the environment; 
  7.23     (2) whether the noncompliance was negligent, knowing, or 
  7.24  willful; 
  7.25     (3) the deterrent effect of the award reduction on other 
  7.26  tank owners and operators; 
  7.27     (4) the amount of reimbursement reduction recommended by 
  7.28  the commissioner; and 
  7.29     (5) the documentation of noncompliance provided by the 
  7.30  commissioner. 
  7.31     (k) An applicant may assign the right to receive 
  7.32  reimbursement to each lender who advanced funds to pay the costs 
  7.33  of the corrective action or to each contractor or consultant who 
  7.34  provided corrective action services.  An assignment must be made 
  7.35  by filing with the board a document, in a form prescribed by the 
  7.36  board, indicating the identity of the applicant, the identity of 
  8.1   the assignee, the dollar amount of the assignment, and the 
  8.2   location of the corrective action.  An assignment signed by the 
  8.3   applicant is valid unless terminated by filing a termination 
  8.4   with the board, in a form prescribed by the board, which must 
  8.5   include the written concurrence of the assignee.  The board 
  8.6   shall maintain an index of assignments filed under this 
  8.7   paragraph.  The board shall pay the reimbursement to the 
  8.8   applicant and to one or more assignees by a multiparty check.  
  8.9   The board has no liability to an applicant for a payment under 
  8.10  an assignment meeting the requirements of this paragraph. 
  8.11     Sec. 5.  Minnesota Statutes 2000, section 115C.09, 
  8.12  subdivision 3h, is amended to read: 
  8.13     Subd. 3h.  [REIMBURSEMENT; ABOVEGROUND TANKS IN BULK 
  8.14  PLANTS.] (a) As used in this subdivision, "bulk plant" means an 
  8.15  aboveground or underground tank facility with a storage capacity 
  8.16  of more than 1,100 gallons but less than 1,000,000 gallons that 
  8.17  is used to dispense petroleum into cargo tanks for 
  8.18  transportation and sale at another location. 
  8.19     (b) Notwithstanding any other provision in this chapter and 
  8.20  any rules adopted pursuant to this chapter, the board shall 
  8.21  reimburse 90 percent of an applicant's cost for bulk plant 
  8.22  upgrades or closures completed between June 1, 1998, and 
  8.23  November 1, 2003, to comply with Minnesota Rules, chapter 7151, 
  8.24  provided that the board determines the costs were incurred and 
  8.25  reasonable.  The reimbursement may not exceed $10,000 per bulk 
  8.26  plant. 
  8.27     (c) For corrective action at a bulk plant located on what 
  8.28  is or was railroad right-of-way, the board shall reimburse 90 
  8.29  percent of total reimbursable costs on the first $40,000 and 100 
  8.30  percent of any remaining reimbursable costs when the applicant 
  8.31  can document that one or more other bulk plants were operated on 
  8.32  the same section of right-of-way. 
  8.33     Sec. 6.  Minnesota Statutes 2000, section 115C.093, is 
  8.34  amended to read: 
  8.35     115C.093 [CORRECTIVE ACTION PERFORMANCE AUDITS.] 
  8.36     (a) The board shall may contract for performance audits of 
  9.1   corrective actions for which reimbursement is sought under 
  9.2   section 115C.09, subdivision 3, paragraph (a), clause (3), and 
  9.3   may contract for audits of other corrective actions.  
  9.4      (b) A responsible person may request a performance audit 
  9.5   under this section.  If the board denies the request, it must 
  9.6   provide the requester with the reasons for the denial. 
  9.7      (c) A performance audit conducted under this section must 
  9.8   evaluate the adequacy of the corrective actions, the validity of 
  9.9   the corrective action costs, and whether alternative methods or 
  9.10  technologies could have been used to carry out the corrective 
  9.11  actions at a lower cost.  The board shall report the results of 
  9.12  audits conducted under this section to the chairs of the senate 
  9.13  committees on environment and natural resources and commerce and 
  9.14  consumer protection, the finance division of the senate 
  9.15  committee on environment and natural resources, and the house of 
  9.16  representatives committees on environment and natural resources, 
  9.17  environment and natural resources finance, and commerce, 
  9.18  tourism, and consumer affairs.  Money in the fund is 
  9.19  appropriated to the board for the purposes of this section. 
  9.20     Sec. 7.  Minnesota Statutes 2000, section 115C.112, is 
  9.21  amended to read: 
  9.22     115C.112 [CONSULTANT AND CONTRACTOR SANCTIONS; ACTIONS 
  9.23  BASED ON CONDUCT OCCURRING ON AND AFTER MARCH 14, 1996.] 
  9.24     The commissioner of commerce may by order deny a 
  9.25  registration, censure, suspend, or revoke a registrant and 
  9.26  require payment of all costs of proceedings resulting in an 
  9.27  action instituted under this section and impose a civil penalty 
  9.28  of not more than $10,000 if the commissioner of commerce finds:  
  9.29  (i) that the order is in the public interest; and (ii) that the 
  9.30  registrant or, in the case of a registrant that is not a natural 
  9.31  person, any partner, officer, or director, any person occupying 
  9.32  a similar status or performing similar functions, or any person 
  9.33  directly or indirectly controlling the registrant: 
  9.34     (1) has engaged in conduct that departs from or fails to 
  9.35  conform to the minimal standards of acceptable and prevailing 
  9.36  engineering, hydrogeological, or other technical practices 
 10.1   within the reasonable control of the consultant or contractor; 
 10.2      (2) has participated in a kickback scheme prohibited under 
 10.3   section 115C.045; 
 10.4      (3) has engaged in conduct likely to deceive or defraud, or 
 10.5   demonstrating a willful or careless disregard for public health 
 10.6   or the environment; 
 10.7      (4) has committed fraud, embezzlement, theft, forgery, 
 10.8   bribery, falsified or destroyed records, made false statements, 
 10.9   received stolen property, made false claims, or obstructed 
 10.10  justice; 
 10.11     (5) is the subject of an order revoking, suspending, 
 10.12  restricting, limiting, or imposing other disciplinary action 
 10.13  against the contractor's or consultant's license or 
 10.14  certification in another state or jurisdiction; 
 10.15     (6) if the person is a consultant, has failed to comply 
 10.16  with any of the ongoing obligations for registration as a 
 10.17  consultant in section 115C.11, subdivision 1; 
 10.18     (7) has failed to comply with any provision or any rule or 
 10.19  order under this chapter or chapter 45; 
 10.20     (8) has engaged in anticompetitive activity; 
 10.21     (9) has performed corrective action without having an 
 10.22  accurate and complete registration on file with the board or has 
 10.23  allowed another to perform corrective action when that party 
 10.24  does not have a complete registration on file with the board; 
 10.25     (10) has been shown to be incompetent, untrustworthy, or 
 10.26  financially irresponsible; or 
 10.27     (11) has made or assisted another in making any material 
 10.28  misrepresentation or omission to the board, commissioner, 
 10.29  commissioner of commerce, or upon reasonable request has 
 10.30  withheld or concealed information from, or refused to furnish 
 10.31  information to, the board, commissioner, or commissioner of 
 10.32  commerce; or 
 10.33     (12) has failed to reasonably supervise its employees or 
 10.34  representatives to assure their compliance with this chapter and 
 10.35  Minnesota Rules, chapter 2890. 
 10.36     Sec. 8.  Minnesota Statutes 2000, section 115C.13, is 
 11.1   amended to read: 
 11.2      115C.13 [REPEALER.] 
 11.3      Sections 115C.01, 115C.02, 115C.021, 115C.03, 115C.04, 
 11.4   115C.045, 115C.05, 115C.06, 115C.065, 115C.07, 115C.08, 115C.09, 
 11.5   115C.092, 115C.093, 115C.10, 115C.11, and 115C.111, 115C.112, 
 11.6   115C.12, and 115C.13, are repealed effective June 30, 2005. 
 11.7      Sec. 9.  [REPEALER.] 
 11.8      Minnesota Statutes 2000, sections 115C.02, subdivisions 11a 
 11.9   and 12a; 115C.082; 115C.09, subdivision 3g; 115C.091; and 
 11.10  115C.092, are repealed. 
 11.11     Sec. 10.  [EFFECTIVE DATE.] 
 11.12     Sections 1 to 9 are effective the day following final 
 11.13  enactment.