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                            CHAPTER 397-H.F.No. 2519 
                  An act relating to the environment; increasing the 
                  amount of reimbursement available for cleanup of 
                  petroleum releases by certain responsible persons; 
                  requiring corrective action performance audits in 
                  certain circumstances; exempting petroleum tank 
                  cleanup contracts from certain spending limitations; 
                  amending Minnesota Statutes 1995 Supplement, sections 
                  115C.08, subdivision 4; and 115C.09, subdivision 3; 
                  Laws 1995, chapter 254, article 1, section 93; 
                  proposing coding for new law in Minnesota Statutes, 
                  chapter 115C. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1995 Supplement, section 
        115C.08, subdivision 4, is amended to read: 
           Subd. 4.  [EXPENDITURES.] (a) Money in the fund may only be 
        spent: 
           (1) to administer the petroleum tank release cleanup 
        program established in this chapter; 
           (2) for agency administrative costs under sections 116.46 
        to 116.50, sections 115C.03 to 115C.06, and costs of corrective 
        action taken by the agency under section 115C.03, including 
        investigations; 
           (3) for costs of recovering expenses of corrective actions 
        under section 115C.04; 
           (4) for training, certification, and rulemaking under 
        sections 116.46 to 116.50; 
           (5) for agency administrative costs of enforcing rules 
        governing the construction, installation, operation, and closure 
        of aboveground and underground petroleum storage tanks; 
           (6) for reimbursement of the harmful substance compensation 
        account under subdivision 5 and section 115B.26, subdivision 4; 
        and 
           (7) for administrative and staff costs as set by the board 
        to administer the petroleum tank release program established in 
        this chapter; and 
           (8) for corrective action performance audits under section 
        115C.093. 
           (b) Money in the fund is appropriated to the board to make 
        reimbursements or payments under this section. 
           Sec. 2.  Minnesota Statutes 1995 Supplement, section 
        115C.09, subdivision 3, is amended to read: 
           Subd. 3.  [REIMBURSEMENTS; SUBROGATION; APPROPRIATION.] (a) 
        The board shall reimburse a responsible person who is eligible 
        under subdivision 2 from the fund in the following amounts: 
           (1) 90 percent of the total reimbursable costs on the first 
        $250,000 and 75 percent on any remaining costs in excess of 
        $250,000 on a site; or 
           (2) for corrective actions at a residential site used as a 
        permanent residence at the time the release was discovered, 92.5 
        percent of the total reimbursable costs on the first $100,000 
        and 100 percent of any remaining costs in excess of $100,000; or 
           (3) 90 percent of the total reimbursable costs on the first 
        $250,000 and 100 percent of the cumulative total reimbursable 
        costs in excess of $250,000 at all sites in which the 
        responsible person had interest, and for which the commissioner 
        has not issued a closure letter as of the effective date of this 
        clause, if the responsible person dispensed less than 1,000,000 
        gallons of petroleum at each location in each of the last three 
        calendar years that the responsible person dispensed petroleum 
        at the location and: 
           (i) has owned no more than three locations in the state at 
        which motor fuel was dispensed into motor vehicles and has 
        discontinued operation of all petroleum retail operations; or 
           (ii) has owned no more than one location in the state at 
        which motor fuel was dispensed into motor vehicles. 
           Not more than $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 $2,000,000 
        may be reimbursed for costs associated with a single tank 
        facility. 
           (b) A reimbursement may not be made from the fund under 
        this subdivision 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 under 
        this subdivision 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 responsible person has made 
        reasonable efforts to collect from an insurer and failed, the 
        board shall reimburse the responsible person under this 
        subdivision. 
           (g) If the board reimburses a responsible person for costs 
        for which the responsible person has petroleum tank leakage or 
        spill insurance coverage, the board is subrogated to the rights 
        of the responsible person 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 a responsible person of 
        reimbursement constitutes an assignment by the responsible 
        person to the board of any rights of the responsible person 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 responsible party the remedies 
        provided in that subdivision, except where the board has 
        knowingly provided reimbursement because the responsible person 
        was denied coverage by the insurer. 
           (h) Money in the fund is appropriated to the board to make 
        reimbursements under this section.  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 section if it finds that the responsible person 
        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 responsible person, to the extent possible, fully 
        cooperated with the agency in responding to the release; and 
           (3) the state and federal rules and regulations applicable 
        to the condition or operation of the tank when the noncompliance 
        caused or failed to mitigate the release. 
           (j) The reimbursement may be reduced as much as 100 percent 
        for failure by the responsible person to comply with the 
        requirements in paragraph (i), clauses (1) to (3).  In 
        determining the amount of the reimbursement reduction, the board 
        shall consider:  
           (1) the reasonable determination by the agency of the 
        environmental impact of the noncompliance; 
           (2) whether the noncompliance was negligent, knowing, or 
        willful; 
           (3) the deterrent effect of the award reduction on other 
        tank owners and operators; and 
           (4) the amount of reimbursement reduction recommended by 
        the commissioner. 
           (k) A person may assign the right to receive reimbursement 
        to each lender who advanced funds to pay the costs of the 
        corrective action or to each contractor or consultant who 
        provided corrective action services.  An assignment must be made 
        by filing with the board a document, in a form prescribed by the 
        board, indicating the identity of the responsible person, the 
        identity of the assignee, the dollar amount of the assignment, 
        and the location of the corrective action.  An assignment signed 
        by the responsible person is valid unless terminated by filing a 
        termination with the board, in a form prescribed by the board, 
        which must include the written concurrence of the assignee.  The 
        board shall maintain an index of assignments filed under this 
        paragraph.  The board shall pay the reimbursement to the 
        responsible person and to one or more assignees by a multiparty 
        check.  The board has no liability to a responsible person for a 
        payment under an assignment meeting the requirements of this 
        paragraph. 
           Sec. 3.  [115C.093] [CORRECTIVE ACTION PERFORMANCE AUDITS.] 
           (a) The board shall contract for performance audits of 
        corrective actions for which reimbursement is sought under 
        section 115C.09, subdivision 3, paragraph (a), clause (3), and 
        may contract for audits of other corrective actions.  
           (b) A responsible person may request a performance audit 
        under this section.  If the board denies the request, it must 
        provide the requester with the reasons for the denial. 
           (c) A performance audit conducted under this section must 
        evaluate the adequacy of the corrective actions, the validity of 
        the corrective action costs, and whether alternative methods or 
        technologies could have been used to carry out the corrective 
        actions at a lower cost.  The board shall report the results of 
        audits conducted under this section to the chairs of the senate 
        committees on environment and natural resources and commerce and 
        consumer protection, the finance division of the senate 
        committee on environment and natural resources, and the house of 
        representatives committees on environment and natural resources, 
        environment and natural resources finance, and commerce, 
        tourism, and consumer affairs.  Money in the fund is 
        appropriated to the board for the purposes of this section. 
           Sec. 4.  Laws 1995, chapter 254, article 1, section 93, is 
        amended to read: 
           Sec. 93.  [SPENDING LIMITATION ON CONTRACTS.] 
           (a) During the biennium ending June 30, 1997, the aggregate 
        amount spent by all departments or agencies defined in Minnesota 
        Statutes, section 15.91, subdivision 1, on professional or 
        technical service contracts may not exceed 95 percent of the 
        aggregate amount these departments or agencies spent on these 
        contracts during the biennium from July 1, 1993, to June 30, 
        1995.  For purposes of this section, professional or technical 
        service contracts are as defined in Minnesota Statutes, section 
        16B.17, but do not include contracts for highway construction or 
        maintenance, contracts between state agencies, contracts paid 
        for from insurance trust funds, gift and deposit funds, capital 
        projects funds, or federal funds, contracts with private 
        collection agencies, contracts that are entered into in 
        connection with the agency's distribution of grant funds, or 
        contracts entered into under Minnesota Statutes, section 
        16B.35 or 115C.093.  The governor or a designated official must 
        limit or disapprove proposed contracts as necessary to comply 
        with this section. 
           (b) During the biennium ending June 30, 1997, the amount 
        spent by (1) the house of representatives; (2) the senate; and 
        (3) the legislative coordinating commission and all groups under 
        its jurisdiction, from direct-appropriated funds on professional 
        or technical service contracts may not exceed 95 percent of the 
        amount spent on these contracts from direct-appropriated funds 
        during the biennium from July 1, 1993, to June 30, 1995.  Each 
        entity listed in clauses (1), (2), and (3) of this paragraph 
        must be treated separately for purposes of determining 
        compliance with this paragraph, except that the legislative 
        coordinating commission and all groups under its jurisdiction 
        must be treated as one unit.  For purposes of this paragraph, 
        "professional or technical service contract" has the meaning 
        defined in section 16B.17, but does not include contracts for 
        actuarial services entered into by the legislative commission on 
        pensions and retirement, or contracts with other legislative or 
        state executive agencies.  The house of representatives 
        committee on rules and legislative administration, the senate 
        committee on rules and administration, and the legislative 
        coordinating commission must each determine the amount of the 
        reduction to be made under this paragraph. 
           Sec. 5.  [EFFECTIVE DATE.] 
           Sections 1 to 4 are effective the day following final 
        enactment. 
           Presented to the governor March 29, 1996 
           Signed by the governor April 2, 1996, 10:02 a.m.

Official Publication of the State of Minnesota Revisor of Statutes