1.1                          A bill for an act 
  1.2             relating to economic development; imposing a specific 
  1.3             standard of proof for certain petrofund reimbursement 
  1.4             reductions; providing reimbursement for certain bulk 
  1.5             petroleum plants upgrading or closing aboveground 
  1.6             storage tanks; regulating the cleanup of contaminated 
  1.7             land; amending Minnesota Statutes 1998, sections 
  1.8             115C.08, subdivision 4; 115C.09, subdivision 3, and by 
  1.9             adding a subdivision; 116J.562, subdivision 2; and 
  1.10            116J.567. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 1998, 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; 
  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  Of this amount, the commissioner may spend up to $120,000 
  2.20  annually for administration of the contamination cleanup grant 
  2.21  program.  The appropriation does not cancel and is available 
  2.22  until expended.  The appropriation shall not be withdrawn from 
  2.23  the fund nor the fund balance reduced until the funds are 
  2.24  requested by the commissioner of trade and economic 
  2.25  development.  The commissioner shall schedule requests for 
  2.26  withdrawals from the fund to minimize the necessity to impose 
  2.27  the fee authorized by subdivision 2.  Unless otherwise provided, 
  2.28  the appropriation in this paragraph may be used for: 
  2.29     (1) project costs at a qualifying site if a portion of the 
  2.30  cleanup costs are attributable to petroleum contamination; and 
  2.31     (2) the costs of performing contamination investigation if 
  2.32  there is a reasonable basis to suspect the contamination is 
  2.33  attributable to petroleum. 
  2.34     Sec. 2.  Minnesota Statutes 1998, section 115C.09, 
  2.35  subdivision 3, is amended to read: 
  2.36     Subd. 3.  [REIMBURSEMENTS; SUBROGATION; APPROPRIATION.] (a) 
  3.1   The board shall reimburse an eligible applicant from the fund in 
  3.2   the following amounts: 
  3.3      (1) 90 percent of the total reimbursable costs on the first 
  3.4   $250,000 and 75 percent on any remaining costs in excess of 
  3.5   $250,000 on a site; 
  3.6      (2) for corrective actions at a residential site used as a 
  3.7   permanent residence at the time the release was discovered, 92.5 
  3.8   percent of the total reimbursable costs on the first $100,000 
  3.9   and 100 percent of any remaining costs in excess of $100,000; or 
  3.10     (3) 90 percent of the total reimbursable costs on the first 
  3.11  $250,000 and 100 percent of the cumulative total reimbursable 
  3.12  costs in excess of $250,000 at all sites in which the 
  3.13  responsible person had interest, and for which the commissioner 
  3.14  has not issued a closure letter as of April 3, 1996, if the 
  3.15  responsible person dispensed less than 1,000,000 gallons of 
  3.16  petroleum at each location in each of the last three calendar 
  3.17  years that the responsible person dispensed petroleum at the 
  3.18  location and: 
  3.19     (i) has owned no more than three locations in the state at 
  3.20  which motor fuel was dispensed into motor vehicles and has 
  3.21  discontinued operation of all petroleum retail operations; or 
  3.22     (ii) has owned no more than one location in the state at 
  3.23  which motor fuel was dispensed into motor vehicles. 
  3.24     Not more than $1,000,000 may be reimbursed for costs 
  3.25  associated with a single release, regardless of the number of 
  3.26  persons eligible for reimbursement, and not more than $2,000,000 
  3.27  may be reimbursed for costs associated with a single tank 
  3.28  facility. 
  3.29     (b) A reimbursement may not be made from the fund under 
  3.30  this chapter until the board has determined that the costs for 
  3.31  which reimbursement is requested were actually incurred and were 
  3.32  reasonable. 
  3.33     (c) When an applicant has obtained responsible competitive 
  3.34  bids or proposals according to rules promulgated under this 
  3.35  chapter prior to June 1, 1995, the eligible costs for the tasks, 
  3.36  procedures, services, materials, equipment, and tests of the low 
  4.1   bid or proposal are presumed to be reasonable by the board, 
  4.2   unless the costs of the low bid or proposal are substantially in 
  4.3   excess of the average costs charged for similar tasks, 
  4.4   procedures, services, materials, equipment, and tests in the 
  4.5   same geographical area during the same time period. 
  4.6      (d) When an applicant has obtained a minimum of two 
  4.7   responsible competitive bids or proposals on forms prescribed by 
  4.8   the board and where the rules promulgated under this chapter 
  4.9   after June 1, 1995, designate maximum costs for specific tasks, 
  4.10  procedures, services, materials, equipment and tests, the 
  4.11  eligible costs of the low bid or proposal are deemed reasonable 
  4.12  if the costs are at or below the maximums set forth in the rules.
  4.13     (e) Costs incurred for change orders executed as prescribed 
  4.14  in rules promulgated under this chapter after June 1, 1995, are 
  4.15  presumed reasonable if the costs are at or below the maximums 
  4.16  set forth in the rules, unless the costs in the change order are 
  4.17  above those in the original bid or proposal or are 
  4.18  unsubstantiated and inconsistent with the process and standards 
  4.19  required by the rules. 
  4.20     (f) A reimbursement may not be made from the fund in 
  4.21  response to either an initial or supplemental application for 
  4.22  costs incurred after June 4, 1987, that are payable under an 
  4.23  applicable insurance policy, except that if the board finds that 
  4.24  the applicant has made reasonable efforts to collect from an 
  4.25  insurer and failed, the board shall reimburse the applicant. 
  4.26     (g) If the board reimburses an applicant for costs for 
  4.27  which the applicant has insurance coverage, the board is 
  4.28  subrogated to the rights of the applicant with respect to that 
  4.29  insurance coverage, to the extent of the reimbursement by the 
  4.30  board.  The board may request the attorney general to bring an 
  4.31  action in district court against the insurer to enforce the 
  4.32  board's subrogation rights.  Acceptance by an applicant of 
  4.33  reimbursement constitutes an assignment by the applicant to the 
  4.34  board of any rights of the applicant with respect to any 
  4.35  insurance coverage applicable to the costs that are reimbursed.  
  4.36  Notwithstanding this paragraph, the board may instead request a 
  5.1   return of the reimbursement under subdivision 5 and may employ 
  5.2   against the applicant the remedies provided in that subdivision, 
  5.3   except where the board has knowingly provided reimbursement 
  5.4   because the applicant was denied coverage by the insurer. 
  5.5      (h) Money in the fund is appropriated to the board to make 
  5.6   reimbursements under this chapter.  A reimbursement to a state 
  5.7   agency must be credited to the appropriation account or accounts 
  5.8   from which the reimbursed costs were paid. 
  5.9      (i) The board may reduce the amount of reimbursement to be 
  5.10  made under this chapter if it finds that the applicant has not 
  5.11  complied with a provision of this chapter, a rule or order 
  5.12  issued under this chapter, or one or more of the following 
  5.13  requirements: 
  5.14     (1) the agency was given notice of the release as required 
  5.15  by section 115.061; 
  5.16     (2) the applicant, to the extent possible, fully cooperated 
  5.17  with the agency in responding to the release; ~~and~~ 
  5.18     (3) ~~the state and federal rules and regulations applicable~~ 
  5.19  ~~to the condition or operation of the tank when the noncompliance~~ 
  5.20  ~~caused or failed to mitigate the release~~ the state rules 
  5.21  applicable after December 22, 1993, to operating an underground 
  5.22  storage tank and appurtenances without leak detection; 
  5.23     (4) the state rules applicable after December 22, 1998, to 
  5.24  operating an underground storage tank and appurtenances without 
  5.25  corrosion protection or spill and overfill protection; and 
  5.26     (5) the state rule applicable after November 1, 1998, to 
  5.27  operating an aboveground tank without a dike or other structure 
  5.28  that would contain a spill at the aboveground tank site. 
  5.29     (j) The reimbursement may be reduced as much as 100 percent 
  5.30  for failure by the applicant to comply with the requirements in 
  5.31  paragraph (i), clauses (1) to (3).  In determining the amount of 
  5.32  the reimbursement reduction, the board shall consider: 
  5.33     (1) the reasonable determination by the agency ~~of the~~ 
  5.34  ~~environmental impact of~~ that the noncompliance poses a threat to 
  5.35  the environment; 
  5.36     (2) whether the noncompliance was negligent, knowing, or 
  6.1   willful; 
  6.2      (3) the deterrent effect of the award reduction on other 
  6.3   tank owners and operators; ~~and~~ 
  6.4      (4) the amount of reimbursement reduction recommended by 
  6.5   the commissioner; and 
  6.6      (5) the documentation of noncompliance provided by the 
  6.7   commissioner. 
  6.8      (k) An applicant may assign the right to receive 
  6.9   reimbursement to each lender who advanced funds to pay the costs 
  6.10  of the corrective action or to each contractor or consultant who 
  6.11  provided corrective action services.  An assignment must be made 
  6.12  by filing with the board a document, in a form prescribed by the 
  6.13  board, indicating the identity of the applicant, the identity of 
  6.14  the assignee, the dollar amount of the assignment, and the 
  6.15  location of the corrective action.  An assignment signed by the 
  6.16  applicant is valid unless terminated by filing a termination 
  6.17  with the board, in a form prescribed by the board, which must 
  6.18  include the written concurrence of the assignee.  The board 
  6.19  shall maintain an index of assignments filed under this 
  6.20  paragraph.  The board shall pay the reimbursement to the 
  6.21  applicant and to one or more assignees by a multiparty check.  
  6.22  The board has no liability to an applicant for a payment under 
  6.23  an assignment meeting the requirements of this paragraph. 
  6.24     Sec. 3.  Minnesota Statutes 1998, section 115C.09, is 
  6.25  amended by adding a subdivision to read: 
  6.26     Subd. 3h.  [REIMBURSEMENT; ABOVEGROUND TANKS IN BULK 
  6.27  PLANTS.] (a) As used in this subdivision, "bulk plant" means an 
  6.28  aboveground or underground tank facility with a storage capacity 
  6.29  of more than 1,100 gallons but less than 1,000,000 gallons that 
  6.30  is used to dispense petroleum into cargo tanks for 
  6.31  transportation and sale at another location. 
  6.32     (b) Notwithstanding any other provision in this chapter and 
  6.33  any rules adopted pursuant to this chapter, the board shall 
  6.34  reimburse 90 percent of an applicant's cost for bulk plant 
  6.35  upgrades or closures completed between June 1, 1998, and 
  6.36  November 1, 2003, to comply with Minnesota Rules, chapter 7151, 
  7.1   provided that the board determines the costs were incurred and 
  7.2   reasonable.  The reimbursement may not exceed $10,000 per bulk 
  7.3   plant. 
  7.4      Sec. 4.  Minnesota Statutes 1998, section 116J.562, 
  7.5   subdivision 2, is amended to read: 
  7.6      Subd. 2.  [REDEVELOPMENT COSTS OR COSTS.] "Redevelopment 
  7.7   costs" or "costs" means the costs of land 
  7.8   acquisition, stabilizing unstable soils when infill is required, 
  7.9   demolition, infrastructure improvement, and ponding, or other 
  7.10  environmental infrastructure. 
  7.11     Sec. 5.  Minnesota Statutes 1998, section 116J.567, is 
  7.12  amended to read: 
  7.13     116J.567 [SALE OF LAND.] 
  7.14     Bond proceeds funds in the account may only be used for 
  7.15  redevelopment costs for publicly owned property.  Nonbond 
  7.16  proceeds funds in the account may be used for redevelopment 
  7.17  costs as defined in section 116J.562, subdivision 2, provided 
  7.18  that the land upon which the improvements are made will 
  7.19  ultimately be sold to a private developer at the fair market 
  7.20  value of the land, unless it can be determined by the 
  7.21  commissioner that a sale for less than fair market value does 
  7.22  not result in a subsidy to a private business or developer.  Net 
  7.23  sale proceeds, up to the amount of the grant, must be paid to 
  7.24  the account by the development authority within two years of the 
  7.25  sale.  The sale and repayment provisions of this section do not 
  7.26  apply to lands that will be acquired with nonbond proceeds funds 
  7.27  and retained in public ownership for infrastructure improvement 
  7.28  and ponding or other environmental infrastructure.  For the 
  7.29  purpose of this section, "net sales proceeds" means the purchase 
  7.30  price of the land minus redevelopment costs related to the land 
  7.31  including redevelopment costs paid with grants made under 
  7.32  section 116J.564. 
  7.33     Sec. 6.  [EFFECTIVE DATE.] 
  7.34     Sections 1 to 5 are effective the day following final 
  7.35  enactment.