SF 638

1st Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to the environment; petroleum release 
  1.3             compensation fund; creating a petroleum tank upgrade 
  1.4             assistance program; extending the authority of the 
  1.5             commissioner of the pollution control agency to issue 
  1.6             liability assurances in certain situations; extending 
  1.7             the repealer of the program; amending Minnesota 
  1.8             Statutes 1996, sections 115C.08, subdivision 4; 
  1.9             115C.09, subdivision 3; and 115C.13; proposing coding 
  1.10            for new law in Minnesota Statutes, chapter 116J. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 1996, section 115C.08, 
  1.13  subdivision 4, is amended to read: 
  1.14     Subd. 4.  [EXPENDITURES.] (a) Money in the fund may only be 
  1.15  spent: 
  1.16     (1) to administer the petroleum tank release cleanup 
  1.17  program established in this chapter; 
  1.18     (2) for agency administrative costs under sections 116.46 
  1.19  to 116.50, sections 115C.03 to 115C.06, and costs of corrective 
  1.20  action taken by the agency under section 115C.03, including 
  1.21  investigations; 
  1.22     (3) for costs of recovering expenses of corrective actions 
  1.23  under section 115C.04; 
  1.24     (4) for training, certification, and rulemaking under 
  1.25  sections 116.46 to 116.50; 
  1.26     (5) for agency administrative costs of enforcing rules 
  1.27  governing the construction, installation, operation, and closure 
  1.28  of aboveground and underground petroleum storage tanks; 
  2.1      (6) for reimbursement of the harmful substance compensation 
  2.2   account under subdivision 5 and section 115B.26, subdivision 4; 
  2.3      (7) for administrative and staff costs as set by the board 
  2.4   to administer the petroleum tank release program established in 
  2.5   this chapter; and 
  2.6      (8) for corrective action performance audits under section 
  2.7   115C.093; and 
  2.8      (9) for contamination cleanup grants, as provided in 
  2.9   paragraph (c). 
  2.10     (b) Except as provided in paragraph (c), money in the fund 
  2.11  is appropriated to the board to make reimbursements or payments 
  2.12  under this section. 
  2.13     (c) $6,200,000 is annually appropriated from the fund to 
  2.14  the commissioner of trade and economic development for 
  2.15  contamination cleanup grants under section 116J.554, provided 
  2.16  that money appropriated in this paragraph may be used only for 
  2.17  cleanup costs attributable to petroleum contamination, as 
  2.18  determined by the commissioner of the pollution control agency. 
  2.19     Sec. 2.  Minnesota Statutes 1996, section 115C.09, 
  2.20  subdivision 3, is amended to read: 
  2.21     Subd. 3.  [REIMBURSEMENTS; SUBROGATION; APPROPRIATION.] (a) 
  2.22  The board shall reimburse an eligible applicant from the fund in 
  2.23  the following amounts: 
  2.24     (1) 90 percent of the total reimbursable costs on the first 
  2.25  $250,000 and 75 percent on any remaining costs in excess of 
  2.26  $250,000 on a site; 
  2.27     (2) for corrective actions at a residential site used as a 
  2.28  permanent residence at the time the release was discovered, 92.5 
  2.29  percent of the total reimbursable costs on the first $100,000 
  2.30  and 100 percent of any remaining costs in excess of $100,000; or 
  2.31     (3) 90 percent of the total reimbursable costs on the first 
  2.32  $250,000 and 100 percent of the cumulative total reimbursable 
  2.33  costs in excess of $250,000 at all sites in which the 
  2.34  responsible person had interest, and for which the commissioner 
  2.35  has not issued a closure letter as of April 3, 1996, if the 
  2.36  responsible person dispensed less than 1,000,000 gallons of 
  3.1   petroleum at each location in each of the last three calendar 
  3.2   years that the responsible person dispensed petroleum at the 
  3.3   location and: 
  3.4      (i) has owned no more than three locations in the state at 
  3.5   which motor fuel was dispensed into motor vehicles and has 
  3.6   discontinued operation of all petroleum retail operations; or 
  3.7      (ii) has owned no more than one location in the state at 
  3.8   which motor fuel was dispensed into motor vehicles; or 
  3.9      (4) until December 31, 1999, 95 percent of the total 
  3.10  reimbursable cost, plus tank removal, closure in place, 
  3.11  installation and excavation costs incurred in conjunction with 
  3.12  new tank installation, backfill, site restoration, resurfacing, 
  3.13  and utility service restoration costs if the responsible person 
  3.14  dispensed less than 300,000 gallons of petroleum during the last 
  3.15  year in which petroleum products were dispensed at the location, 
  3.16  and if, as of January 1, 1997, the responsible person owns no 
  3.17  more than one location in this or any other state at which motor 
  3.18  fuel was dispensed into motor vehicles or watercraft. 
  3.19     Not more than $1,000,000 may be reimbursed for costs 
  3.20  associated with a single release, regardless of the number of 
  3.21  persons eligible for reimbursement, and not more than $2,000,000 
  3.22  may be reimbursed for costs associated with a single tank 
  3.23  facility. 
  3.24     (b) A reimbursement may not be made from the fund under 
  3.25  this chapter until the board has determined that the costs for 
  3.26  which reimbursement is requested were actually incurred and were 
  3.27  reasonable. 
  3.28     (c) When an applicant has obtained responsible competitive 
  3.29  bids or proposals according to rules promulgated under this 
  3.30  chapter prior to June 1, 1995, the eligible costs for the tasks, 
  3.31  procedures, services, materials, equipment, and tests of the low 
  3.32  bid or proposal are presumed to be reasonable by the board, 
  3.33  unless the costs of the low bid or proposal are substantially in 
  3.34  excess of the average costs charged for similar tasks, 
  3.35  procedures, services, materials, equipment, and tests in the 
  3.36  same geographical area during the same time period. 
  4.1      (d) When an applicant has obtained a minimum of two 
  4.2   responsible competitive bids or proposals on forms prescribed by 
  4.3   the board and where the rules promulgated under this chapter 
  4.4   after June 1, 1995, designate maximum costs for specific tasks, 
  4.5   procedures, services, materials, equipment and tests, the 
  4.6   eligible costs of the low bid or proposal are deemed reasonable 
  4.7   if the costs are at or below the maximums set forth in the rules.
  4.8      (e) Costs incurred for change orders executed as prescribed 
  4.9   in rules promulgated under this chapter after June 1, 1995, are 
  4.10  presumed reasonable if the costs are at or below the maximums 
  4.11  set forth in the rules, unless the costs in the change order are 
  4.12  above those in the original bid or proposal or are 
  4.13  unsubstantiated and inconsistent with the process and standards 
  4.14  required by the rules. 
  4.15     (f) A reimbursement may not be made from the fund in 
  4.16  response to either an initial or supplemental application for 
  4.17  costs incurred after June 4, 1987, that are payable under an 
  4.18  applicable insurance policy, except that if the board finds that 
  4.19  the applicant has made reasonable efforts to collect from an 
  4.20  insurer and failed, the board shall reimburse the applicant. 
  4.21     (g) If the board reimburses an applicant for costs for 
  4.22  which the applicant has insurance coverage, the board is 
  4.23  subrogated to the rights of the applicant with respect to that 
  4.24  insurance coverage, to the extent of the reimbursement by the 
  4.25  board.  The board may request the attorney general to bring an 
  4.26  action in district court against the insurer to enforce the 
  4.27  board's subrogation rights.  Acceptance by an applicant of 
  4.28  reimbursement constitutes an assignment by the applicant to the 
  4.29  board of any rights of the applicant with respect to any 
  4.30  insurance coverage applicable to the costs that are reimbursed.  
  4.31  Notwithstanding this paragraph, the board may instead request a 
  4.32  return of the reimbursement under subdivision 5 and may employ 
  4.33  against the applicant the remedies provided in that subdivision, 
  4.34  except where the board has knowingly provided reimbursement 
  4.35  because the applicant was denied coverage by the insurer. 
  4.36     (h) Money in the fund is appropriated to the board to make 
  5.1   reimbursements under this chapter.  A reimbursement to a state 
  5.2   agency must be credited to the appropriation account or accounts 
  5.3   from which the reimbursed costs were paid. 
  5.4      (i) The board may reduce the amount of reimbursement to be 
  5.5   made under this chapter if it finds that the applicant has not 
  5.6   complied with a provision of this chapter, a rule or order 
  5.7   issued under this chapter, or one or more of the following 
  5.8   requirements: 
  5.9      (1) the agency was given notice of the release as required 
  5.10  by section 115.061; 
  5.11     (2) the applicant, to the extent possible, fully cooperated 
  5.12  with the agency in responding to the release; and 
  5.13     (3) the state and federal rules and regulations applicable 
  5.14  to the condition or operation of the tank when the noncompliance 
  5.15  caused or failed to mitigate the release. 
  5.16     (j) The reimbursement may be reduced as much as 100 percent 
  5.17  for failure by the applicant to comply with the requirements in 
  5.18  paragraph (i), clauses (1) to (3).  In determining the amount of 
  5.19  the reimbursement reduction, the board shall consider:  
  5.20     (1) the reasonable determination by the agency of the 
  5.21  environmental impact of the noncompliance; 
  5.22     (2) whether the noncompliance was negligent, knowing, or 
  5.23  willful; 
  5.24     (3) the deterrent effect of the award reduction on other 
  5.25  tank owners and operators; and 
  5.26     (4) the amount of reimbursement reduction recommended by 
  5.27  the commissioner. 
  5.28     (k) An applicant may assign the right to receive 
  5.29  reimbursement to each lender who advanced funds to pay the costs 
  5.30  of the corrective action or to each contractor or consultant who 
  5.31  provided corrective action services.  An assignment must be made 
  5.32  by filing with the board a document, in a form prescribed by the 
  5.33  board, indicating the identity of the applicant, the identity of 
  5.34  the assignee, the dollar amount of the assignment, and the 
  5.35  location of the corrective action.  An assignment signed by the 
  5.36  applicant is valid unless terminated by filing a termination 
  6.1   with the board, in a form prescribed by the board, which must 
  6.2   include the written concurrence of the assignee.  The board 
  6.3   shall maintain an index of assignments filed under this 
  6.4   paragraph.  The board shall pay the reimbursement to the 
  6.5   applicant and to one or more assignees by a multiparty check.  
  6.6   The board has no liability to an applicant for a payment under 
  6.7   an assignment meeting the requirements of this paragraph. 
  6.8      Sec. 3.  Minnesota Statutes 1996, section 115C.13, is 
  6.9   amended to read: 
  6.10     115C.13 [REPEALER.] 
  6.11     Sections 115C.01, 115C.02, 115C.021, 115C.03, 115C.04, 
  6.12  115C.045, 115C.05, 115C.06, 115C.065, 115C.07, 115C.08, 115C.09, 
  6.13  115C.092, 115C.10, 115C.11, and 115C.12, are repealed effective 
  6.14  June 30, 2000 2005. 
  6.15     Sec. 4.  [116J.56] [PETROLEUM TANK UPGRADE LOAN PROGRAM.] 
  6.16     Subdivision 1.  [ESTABLISHMENT.] The commissioner may 
  6.17  establish a petroleum tank upgrade loan program to finance 
  6.18  petroleum tank upgrades. 
  6.19     Subd. 2.  [LOANS.] Direct loans may be made to borrowers 
  6.20  who meet the requirements of section 115C.09, subdivision 3, 
  6.21  paragraph (a), clause (4).  The interest rate on the loan shall 
  6.22  be three percent.  Loans shall not exceed 50 percent of the cost 
  6.23  of the upgrade or $10,000, whichever is less, but not to exceed 
  6.24  the total out of pocket expense of the borrower.  Each loan must 
  6.25  be secured by a mortgage on real property and such other 
  6.26  security as the commissioner may require. 
  6.27     Subd. 3.  [APPLICATION AND ORIGINATION FEE.] The 
  6.28  commissioner may impose a reasonable nonrefundable application 
  6.29  fee for each application for a loan and an origination fee for 
  6.30  each loan issued under the petroleum tank upgrade loan program.  
  6.31  The origination fee initially shall be set at no more than 1.5 
  6.32  percent and the application fee at $50.  The commissioner may 
  6.33  review the fees annually and make adjustments as necessary.  The 
  6.34  fees must be deposited in the state treasury and credited to an 
  6.35  account in the special revenue fund.  Money in this account is 
  6.36  appropriated to the commissioner for administrative expenses of 
  7.1   the petroleum tank upgrade loan program. 
  7.2      Subd. 4.  [APPROPRIATION.] An amount necessary is 
  7.3   appropriated from the petroleum tank fund to the commissioner of 
  7.4   trade and economic development for the petroleum tank upgrade 
  7.5   assistance loan program established under this section. 
  7.6      Sec. 5.  [EFFECTIVE DATE.] 
  7.7      Sections 1 to 4 are effective July 1, 1997.