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Key: (1) language to be deleted (2) new language

                            CHAPTER 203-H.F.No. 595 
                  An act relating to storage tanks; imposing a specific 
                  standard of proof for certain petrofund reimbursement 
                  reductions; providing reimbursement for certain bulk 
                  petroleum plants upgrading or closing aboveground 
                  storage tanks; modifying application requirements for 
                  contamination; cleanup grants; regulating the cleanup 
                  of contaminated land; specifying the marking required 
                  on petroleum product storage tanks; modifying the 
                  application of the Fire Code to tanks; providing an 
                  exception; amending Minnesota Statutes 1998, sections 
                  115C.08, subdivision 4; 115C.09, subdivision 3, and by 
                  adding a subdivision; 116J.553, subdivision 2; 
                  116J.562, subdivision 2; 116J.567; and 239.752; 
                  proposing coding for new law in Minnesota Statutes, 
                  chapter 299F. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1998, 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; 
           (7) for administrative and staff costs as set by the board 
        to administer the petroleum tank release program established in 
        this chapter; 
           (8) for corrective action performance audits under section 
        115C.093; and 
           (9) for contamination cleanup grants, as provided in 
        paragraph (c). 
           (b) Except as provided in paragraph (c), money in the fund 
        is appropriated to the board to make reimbursements or payments 
        under this section. 
           (c) $6,200,000 is annually appropriated from the fund to 
        the commissioner of trade and economic development for 
        contamination cleanup grants under section 116J.554, provided 
        that money appropriated in this paragraph may be used only for 
        cleanup costs attributable to petroleum contamination, as 
        determined by the commissioner of the pollution control agency.  
        Of this amount, the commissioner may spend up to $120,000 
        annually for administration of the contamination cleanup grant 
        program.  The appropriation does not cancel and is available 
        until expended.  The appropriation shall not be withdrawn from 
        the fund nor the fund balance reduced until the funds are 
        requested by the commissioner of trade and economic 
        development.  The commissioner shall schedule requests for 
        withdrawals from the fund to minimize the necessity to impose 
        the fee authorized by subdivision 2.  Unless otherwise provided, 
        the appropriation in this paragraph may be used for: 
           (1) project costs at a qualifying site if a portion of the 
        cleanup costs are attributable to petroleum contamination; and 
           (2) the costs of performing contamination investigation if 
        there is a reasonable basis to suspect the contamination is 
        attributable to petroleum. 
           Sec. 2.  Minnesota Statutes 1998, 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 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; 
           (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 April 3, 1996, 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 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; 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 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 (3) (5).  In determining the 
        amount of the reimbursement reduction, the board shall consider: 
           (1) the reasonable determination by the agency of the 
        environmental impact of 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; and 
           (4) the amount of reimbursement reduction recommended by 
        the commissioner; and 
           (5) the documentation of noncompliance provided by the 
        commissioner. 
           (k) An applicant 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 applicant, the identity of 
        the assignee, the dollar amount of the assignment, and the 
        location of the corrective action.  An assignment signed by the 
        applicant 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 
        applicant and to one or more assignees by a multiparty check.  
        The board has no liability to an applicant for a payment under 
        an assignment meeting the requirements of this paragraph. 
           Sec. 3.  Minnesota Statutes 1998, section 115C.09, is 
        amended by adding a subdivision to read: 
           Subd. 3h.  [REIMBURSEMENT; ABOVEGROUND TANKS IN BULK 
        PLANTS.] (a) As used in this subdivision, "bulk plant" means an 
        aboveground or underground tank facility with a storage capacity 
        of more than 1,100 gallons but less than 1,000,000 gallons that 
        is used to dispense petroleum into cargo tanks for 
        transportation and sale at another location. 
           (b) Notwithstanding any other provision in this chapter and 
        any rules adopted pursuant to this chapter, the board shall 
        reimburse 90 percent of an applicant's cost for bulk plant 
        upgrades or closures completed between June 1, 1998, and 
        November 1, 2003, to comply with Minnesota Rules, chapter 7151, 
        provided that the board determines the costs were incurred and 
        reasonable.  The reimbursement may not exceed $10,000 per bulk 
        plant. 
           Sec. 4.  Minnesota Statutes 1998, section 116J.553, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REQUIRED CONTENT.] (a) The commissioner shall 
        prescribe and provide the application form.  The application 
        must include at least the following information: 
           (1) identification of the site; 
           (2) an approved response action plan for the site, 
        including the results of engineering and other tests showing the 
        nature and extent of the release or threatened release of 
        contaminants at the site; 
           (3) a detailed estimate, along with necessary supporting 
        evidence, of the total cleanup costs for the site; 
           (4) an appraisal of the current market value of the 
        property, separately taking into account the effect of the 
        contaminants on the market value, prepared by a qualified 
        independent appraiser using accepted appraisal methodology; 
           (5) an assessment of the development potential or likely 
        use of the site after completion of the response action plan, 
        including any specific commitments from third parties to 
        construct improvements on the site; 
           (6) the manner in which the municipality will meet the 
        local match requirement; and 
           (7) any additional information or material that the 
        commissioner prescribes. 
           (b) A response action plan is not required as a condition 
        to receive a grant under section 116J.554, subdivision 1, 
        paragraph (c). 
           Sec. 5.  Minnesota Statutes 1998, section 116J.562, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REDEVELOPMENT COSTS OR COSTS.] "Redevelopment 
        costs" or "costs" means the costs of land 
        acquisition, stabilizing unstable soils when infill is required, 
        demolition, infrastructure improvement, and ponding, or other 
        environmental infrastructure. 
           Sec. 6.  Minnesota Statutes 1998, section 116J.567, is 
        amended to read: 
           116J.567 [SALE OF LAND.] 
           Bond proceeds funds in the account may only be used for 
        redevelopment costs for publicly owned property.  Nonbond 
        proceeds funds in the account may be used for redevelopment 
        costs as defined in section 116J.562, subdivision 2, provided 
        that the land upon which the improvements are made will 
        ultimately be sold to a private developer at the fair market 
        value of the land, unless it can be determined by the 
        commissioner that a sale for less than fair market value does 
        not result in a subsidy to a private business or developer.  Net 
        sale proceeds, up to the amount of the grant, must be paid to 
        the account by the development authority within two years of the 
        sale.  The sale and repayment provisions of this section do not 
        apply to lands that will be acquired with nonbond proceeds funds 
        and retained in public ownership for infrastructure improvement 
        and ponding or other environmental infrastructure.  For the 
        purpose of this section, "net sales proceeds" means the purchase 
        price of the land minus redevelopment costs related to the land 
        including redevelopment costs paid with grants made under 
        section 116J.564. 
           Sec. 7.  Minnesota Statutes 1998, section 239.752, is 
        amended to read: 
           239.752 [STORAGE TANK MARKING; RETAIL LOCATION.] 
           Subdivision 1.  [MARKING REQUIRED.] A person responsible 
        for the product shall securely mount affix a permanent engraved 
        plastic or stamped metal identification tag on the fill pipe of 
        a petroleum product storage tank at a business where petroleum 
        products are sold, offered for sale, or dispensed at retail into 
        the storage tanks of motor vehicles.  A bulk storage facility 
        operator shall securely affix a metal identification tag on the 
        fill pipe of each storage tank at the distributor's bulk storage 
        facility.  The identification tag must clearly display the grade 
        or trade name of the product stored in the tank.  The grade or 
        trade name on the identification tag must be the same as the 
        grade or trade name displayed on the dispensers through which 
        the product is dispensed.  The grade or trade name must not be 
        displayed on an access cover over a fill pipe be constructed and 
        printed according to subdivision 2 and installed according to 
        subdivision 3.  The identification tag must be printed with the 
        appropriate product identification according to subdivision 4, 
        5, or 6.  This section does not apply to storage tanks at 
        petroleum refineries or terminals. 
           Subd. 2.  [IDENTIFICATION TAG; CONSTRUCTION, PRINTING.] The 
        identification tag required in subdivision 1 must be constructed 
        of one three and one-half inch by three and one-half inch piece 
        of aluminum or stainless steel.  All surfaces of the tag must be 
        coated with a permanent enamel paint or powder coating.  The 
        coating must be light blue for gasoline and alcohol products and 
        dark green for petroleum distillate products.  Lettering must be 
        at least three-eighths of one inch high, and printed on the tag 
        with permanent enamel paint or powder coating.  Lettering must 
        be black for gasoline and alcohol products and white for 
        petroleum distillate products. 
           Subd. 3.  [IDENTIFICATION TAG; INSTALLATION.] The 
        identification tag required in subdivision 1 must be securely 
        affixed to a fill pipe by means of an adjustable steel band 
        clamp.  The display surface of the tag must be positioned so 
        that the product information can be easily read by a person 
        filling the storage tank. 
           Subd. 4.  [PRODUCT IDENTIFICATION; GASOLINE, OXYGENATED 
        GASOLINE.] An identification tag placed on a storage tank 
        containing gasoline or oxygenated gasoline must be marked with 
        the word "GASOLINE" and with the correct octane number and the 
        appropriate product name of the fuel stored in the tank.  The 
        product name must be selected from the following: 
           (1) "REGULAR" for oxygenated gasoline of less than 88 
        octane; 
           (2) "MID-GRADE" for oxygenated gasoline of at least 88 
        octane, but less than 91 octane; 
           (3) "PREMIUM" for oxygenated gasoline of at least 91 
        octane; 
           (4) "NON-OXY PREM" for nonoxygenated gasoline of at least 
        91 octane; 
           (5) "AVIATION" for gasoline used solely as a fuel for 
        aircraft; 
           (6) "RACING" for a special racing gasoline intended to be 
        sold for use in off-road motor vehicles; or 
           (7) "SPECIAL" for gasoline blended with mineral oil or 
        other additives and intended to be sold for use in boats, 
        chainsaws, snowmobiles, or off-road equipment. 
           Subd. 5.  [PRODUCT IDENTIFICATION; ALCOHOL, ALCOHOL-BASED 
        MOTOR FUEL.] An identification tag placed on a storage tank 
        containing unblended alcohol or a predominantly alcohol-based 
        motor fuel must be marked with the word "ALCOHOL" and with the 
        appropriate product name of the fuel stored in the tank.  The 
        product name must be selected from the following: 
           (1) "ETHANOL" for denatured ethanol, as defined in section 
        296A.01; 
           (2) "METHANOL" for methanol; 
           (3) "E-85" for an ethanol-gasoline blend, as defined in 
        section 296A.01; or 
           (4) "M-85" for a methanol-gasoline blend, as defined in 
        section 296A.01. 
           Subd. 6.  [PRODUCT INFORMATION; PETROLEUM 
        DISTILLATES.] Storage tanks containing diesel fuel, heating 
        fuel, kerosene, or other petroleum distillate must be marked 
        with the word "DISTILLATE" and with the correct product grade 
        and appropriate tax status selected from the following: 
           (1) "#1 DIESEL" "UNDYED" for #1 diesel fuel for which the 
        motor fuel excise tax has been paid; 
           (2) "#1" "DYED" for #1 heating fuel or #1 diesel fuel 
        intended to be sold for use in off-road vehicles and equipment; 
           (3) "#2 DIESEL" "UNDYED" for #2 diesel fuel for which the 
        motor fuel excise tax has been paid; 
           (4) "#2" "DYED" for #2 heating fuel or #2 diesel fuel 
        intended to be sold for use in off-road vehicles and equipment; 
           (5) "DIESEL" "PREMIUM" "UNDYED" for premium diesel fuel for 
        which the motor fuel excise tax has been paid; 
           (6) "DIESEL" "PREMIUM" "DYED" for premium diesel fuel 
        intended to be sold off-road; 
           (7) "KEROSENE" "UNDYED" for kerosene for which the federal 
        motor fuel excise tax has been paid; 
           (8) "KEROSENE" "DYED" for kerosene intended to be sold for 
        use in off-road vehicles, heating equipment, and other off-road 
        equipment; or 
           (9) "JET/TURBINE" for jet fuel or turbine fuel. 
           Sec. 8.  [299F.014] [ABOVEGROUND PETROLEUM STORAGE TANKS 
        NOT USED FOR DISPENSING TO THE PUBLIC; TANK VEHICLES.] 
           (a) Any rule of the commissioner of public safety that 
        adopts provisions of the Uniform Fire Code relating to 
        aboveground tanks for petroleum storage that are not used for 
        dispensing to the public is superseded by Minnesota Rules, 
        chapter 7151, in regard to:  secondary containment, substance 
        transfer areas, tank and piping standards, overfill protection, 
        corrosion protection, leak detection, labeling, monitoring, 
        maintenance, recordkeeping, and decommissioning.  If Minnesota 
        Rules, chapter 7151, does not address an issue relating to 
        aboveground tanks for petroleum storage that are not used for 
        dispensing to the public, any applicable provision of the 
        Uniform Fire Code, 1997 Edition, shall apply. 
           (b) A motorized tank vehicle used to transport petroleum 
        products may be parked within 500 feet of a residence if the 
        vehicle is parked at an aboveground tank facility used for 
        dispensing petroleum into cargo tanks for sale at another 
        location. 
           Sec. 9.  [UNDERGROUND TANKS ON FARMS.] 
           An owner or operator of a registered underground storage 
        tank located on a farm in the state who fails to remove the 
        underground storage tank in compliance with the requirements of 
        Minnesota Rules, chapter 7150, before December 22, 2000, shall 
        not be subject to any penalties under state law for failure to 
        comply with the removal requirements of Minnesota Rules, chapter 
        7150, with regard to a tank located on a farm. 
           Sec. 10.  [EFFECTIVE DATE.] 
           Sections 1 to 6 and 9 are effective the day following final 
        enactment.  Section 7 is effective June 1, 2000. 
           Presented to the governor May 21, 1999 
           Signed by the governor May 24, 1999, 10:05 a.m.

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Revisor of Statutes