SF 3135

as introduced - 89th Legislature (2015 - 2016) Posted on 03/24/2016 09:16am

A bill for an act
relating to environment; modifying Petroleum Tank Release Cleanup Act;
amending Minnesota Statutes 2014, section 115C.09, subdivisions 1, 3.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2014, section 115C.09, subdivision 1, is amended to read:

Subdivision 1.

Reimbursable costs.

(a) The board shall provide reimbursement to
eligible applicants for reimbursable costs.

(b) The following costs are reimbursable for purposes of this chapter:

(1) corrective action costs incurred by the applicant and documented in a form
prescribed by the board deleted text begin , except the costs related to the physical removal of a tank deleted text end new text begin .
Corrective action costs incurred by the applicant include costs for physical removal of
a tank when the physical removal is part of a corrective action, regardless of whether
the tank is leaking at the time of removal, and the removal is directed or approved by
the commissioner new text end ;

(2) costs that the responsible person is legally obligated to pay as damages to third
parties for bodily injury, property damage, or corrective action costs incurred by a third
party caused by a release where the responsible person's liability for the costs has been
established by a court order or court-approved settlement; and

(3) up to 180 days of interest costs associated with the financing of corrective action
and incurred by the applicant in a written extension of credit or loan that has been signed by
the applicant and executed after July 1, 2002, provided that the applicant documents that:

(i) the interest costs are incurred as a result of an extension of credit or loan from a
financial institution; and

(ii) the board has not considered the application within the applicable time frame
specified in subdivision 2a, paragraph (c).

Interest costs meeting the requirements of this clause are eligible only when they are
incurred between the date a complete initial application is received by the board, or the
date a complete supplemental application is received by the board, and the date that the
board first notifies the applicant of its reimbursement determination. An application is
complete when the information reasonably required or requested by the board's staff
from the applicant has been received by the board's staff. Interest costs are not eligible
for reimbursement to the extent they exceed two percentage points above the adjusted
prime rate charged by banks, as defined in section 270C.40, subdivision 5, at the time the
extension of credit or loan was executed.

(c) A cost for liability to a third party is incurred by the responsible person when an
order or court-approved settlement is entered that sets forth the specific costs attributed
to the liability. Except as provided in this paragraph, reimbursement may not be made
for costs of liability to third parties until all eligible corrective action costs have been
reimbursed. If a corrective action is expected to continue in operation for more than one
year after it has been fully constructed or installed, the board may estimate the future
expense of completing the corrective action and, after subtracting this estimate from the
total reimbursement available under subdivision 3, reimburse the costs for liability to third
parties. The total reimbursement may not exceed the limit set forth in subdivision 3.

Sec. 2.

Minnesota Statutes 2014, section 115C.09, subdivision 3, is amended to read:

Subd. 3.

Reimbursements; subrogation; appropriation.

(a) The board shall
reimburse an eligible applicant from the fund for 90 percent of the total reimbursable costs
incurred at the site, except that the board may reimburse an eligible applicant from the
fund for greater than 90 percent of the total reimbursable costs, if the applicant previously
qualified for a higher reimbursement rate. For costs associated with a release from a tank
in transport, the board may reimburse a maximum of $100,000.

Not more than deleted text begin $1,000,000 may be reimbursed for costs associated with a single
release, regardless of the number of persons eligible for reimbursement, and not more than deleted text end
$2,000,000 may be reimbursed for costs associated with a single deleted text begin tank facility deleted text end new text begin release new text end .

(b) A reimbursement may not be made from the fund under this chapter until the
board has determined that the costs for which reimbursement is requested were actually
incurred and were reasonable.

(c) When an applicant has obtained responsible competitive bids or proposals
according to rules promulgated under this chapter prior to June 1, 1995, the eligible costs
for the tasks, procedures, services, materials, equipment, and tests of the low bid or proposal
are presumed to be reasonable by the board, unless the costs of the low bid or proposal are
substantially in excess of the average costs charged for similar tasks, procedures, services,
materials, equipment, and tests in the same geographical area during the same time period.

(d) When an applicant has obtained a minimum of two responsible competitive bids
or proposals on forms prescribed by the board and where the rules promulgated under
this chapter after June 1, 1995, designate maximum costs for specific tasks, procedures,
services, materials, equipment and tests, the eligible costs of the low bid or proposal are
deemed reasonable if the costs are at or below the maximums set forth in the rules.

(e) Costs incurred for change orders executed as prescribed in rules promulgated
under this chapter after June 1, 1995, are presumed reasonable if the costs are at or below
the maximums set forth in the rules, unless the costs in the change order are above those in
the original bid or proposal or are unsubstantiated and inconsistent with the process and
standards required by the rules.

(f) A reimbursement may not be made from the fund in response to either an initial
or supplemental application for costs incurred after June 4, 1987, that are payable under
an applicable insurance policy, except that if the board finds that the applicant has made
reasonable efforts to collect from an insurer and failed, the board shall reimburse the
applicant.

(g) If the board reimburses an applicant for costs for which the applicant has
insurance coverage, the board is subrogated to the rights of the applicant with respect to
that insurance coverage, to the extent of the reimbursement by the board. The board may
request the attorney general to bring an action in district court against the insurer to enforce
the board's subrogation rights. Acceptance by an applicant of reimbursement constitutes
an assignment by the applicant to the board of any rights of the applicant with respect to
any insurance coverage applicable to the costs that are reimbursed. Notwithstanding this
paragraph, the board may instead request a return of the reimbursement under subdivision
5 and may employ against the applicant the remedies provided in that subdivision, except
where the board has knowingly provided reimbursement because the applicant was denied
coverage by the insurer.

(h) Money in the fund is appropriated to the board to make reimbursements under
this chapter. A reimbursement to a state agency must be credited to the appropriation
account or accounts from which the reimbursed costs were paid.

(i) The board may reduce the amount of reimbursement to be made under this
chapter if it finds that the applicant has not complied with a provision of this chapter, a
rule or order issued under this chapter, or one or more of the following requirements:

(1) the agency was given notice of the release as required by section 115.061;

(2) the applicant, to the extent possible, fully cooperated with the agency in
responding to the release;

(3) the state rules applicable after December 22, 1993, to operating an underground
storage tank and appurtenances without leak detection;

(4) the state rules applicable after December 22, 1998, to operating an underground
storage tank and appurtenances without corrosion protection or spill and overfill
protection; and

(5) the state rule applicable after November 1, 1998, to operating an aboveground
tank without a dike or other structure that would contain a spill at the aboveground tank site.

(j) The reimbursement may be reduced as much as 100 percent for failure by
the applicant to comply with the requirements in paragraph (i), clauses (1) to (5). In
determining the amount of the reimbursement reduction, the board shall consider:

(1) the reasonable determination by the agency that the noncompliance poses a
threat to the environment;

(2) whether the noncompliance was negligent, knowing, or willful;

(3) the deterrent effect of the award reduction on other tank owners and operators;

(4) the amount of reimbursement reduction recommended by the commissioner; and

(5) the documentation of noncompliance provided by the commissioner.

(k) An applicant may request that the board issue a multiparty check that includes each
lender who advanced funds to pay the costs of the corrective action or to each contractor
or consultant who provided corrective action services. This request must be made by filing
with the board a document, in a form prescribed by the board, indicating the identity of the
applicant, the identity of the lender, contractor, or consultant, the dollar amount, and the
location of the corrective action. The applicant must submit a request for the issuance
of a multiparty check for each application submitted to the board. Payment under this
paragraph does not constitute the assignment of the applicant's right to reimbursement
to the consultant, contractor, or lender. The board has no liability to an applicant for a
payment issued as a multiparty check that meets the requirements of this paragraph.