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1999 Minnesota Statutes

This is a historical version of this statute section. Also view the most recent published version.

115C.09 Reimbursement.

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, except the costs related to the physical removal of a tank;

(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;

(3) up to 180 days worth of interest costs associated with the financing of corrective action and incurred by the applicant in a written financing contract signed by the applicant and executed after May 25, 1991. 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 270.75, subdivision 5, at the time the financing contract was executed; and

(4) preremoval site assessment costs incurred by the applicant and eligible for reimbursement under section 115C.092.

(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.

Subd. 2. Responsible person eligibility. A responsible person who has incurred reimbursable costs after June 4, 1987, in response to a release, may apply to the board for reimbursement under subdivision 3.

Subd. 2a. Application for reimbursement. (a) The board may consider applications for reimbursement at the following stages:

(1) after the commissioner approves corrective actions related to soil excavation and treatment or after the commissioner determines that further soil excavation and treatment should not be done. Remedial investigation costs such as soil borings monitoring wells, and well searches are reimbursable at this stage, but corrective action costs relating to the construction and installation of a comprehensive corrective action design system are not; and

(2) after the commissioner approves a comprehensive plan for corrective action that will adequately address the entire release, including groundwater contamination if necessary, for corrective action costs related to the construction and installation of a comprehensive corrective action design system. An applicant shall not submit an application for reimbursement more frequently than four times per 12-month period unless the application is for more than $2,000 in reimbursement.

(b) The commissioner shall review a plan, and provide an approval or disapproval to the applicant and the board, within 60 days in the case of a plan submitted under paragraph (a), clause (1), and within 120 days in the case of a plan submitted under paragraph (a), clause (2), or the commissioner shall explain to the board why additional time is necessary. The board shall consider a complete application within 60 days of submission of the application under paragraph (a), clause (1), and within 120 days of submission of the application under paragraph (a), clause (2), or the board shall explain for the record why additional time is necessary. For purposes of the preceding sentence, board consideration of an application is timely if it occurs at the regularly scheduled meeting following the deadline. Board staff may review applications submitted to the board at the same time the commissioner considers the appropriateness of the corrective action, but the board may not act on the application until after the commissioner's approval is received.

(c) A reimbursement may not be made unless the board determines that the commissioner has determined that the corrective action was appropriate in terms of protecting public health, welfare, and the environment.

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;

(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 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.

Subd. 3a. Eligibility of other persons. A person who has taken corrective action may apply to the board for reimbursement under subdivision 3 if the board determines that:

(1) the person took the corrective action in response to a request or order of the commissioner made under this chapter;

(2) the commissioner has determined that the person was not a responsible person as defined in this chapter;

(3) the board has determined the person was not a volunteer under subdivision 3b; and

(4) the person incurs reimbursable costs on or after June 4, 1987.

Notwithstanding subdivision 3, paragraph (a), a person eligible for reimbursement under this subdivision shall receive 100 percent of total reimbursable costs up to $1,000,000.

Subd. 3b. Volunteer eligibility. (a) A person may apply to the board for reimbursement under subdivision 3 if the board determines that:

(1) the person is not a responsible person as defined in this chapter;

(2) holds legal or equitable title to the property where a release occurred; and

(3) incurs reimbursable costs on or after May 23, 1989.

(b) The board may reduce the reimbursement to a person eligible under this subdivision if the person acquired legal or equitable title to the property from a responsible person who failed to comply with subdivision 3, paragraph (i), except that the board may not reduce the reimbursement under this provision to a mortgagee who acquires title to the property through foreclosure or receipt of a deed in lieu of foreclosure.

Subd. 3c. Release at refineries and tank facilities not eligible for reimbursement. (a) Reimbursement may not be made under this chapter for costs associated with a release:

(1) from a tank located at a petroleum refinery; or

(2) from a tank facility, including a pipeline terminal, with more than 1,000,000 gallons of total petroleum storage capacity at the tank facility.

(b) Paragraph (a), clause (2), does not apply to reimbursement for costs associated with a release from a tank facility:

(1) owned or operated by a person engaged in the business of mining iron ore or taconite;

(2) owned by a political subdivision, a housing and redevelopment authority, an economic development authority, or a port authority that acquired the tank facility prior to May 23, 1989; or

(3) owned by a person:

(i) who acquired the tank facility prior to May 23, 1989;

(ii) who did not use the tank facility for the bulk storage of petroleum; and

(iii) who is not affiliated with the party who used the tank facility for the bulk storage of petroleum.

Subd. 3d. Political subdivision eligibility. (a) A political subdivision that has taken corrective action may apply to the board for reimbursement under subdivision 3 if the board determines that:

(1) the political subdivision is not a responsible person as defined by this chapter;

(2) is not a volunteer under subdivision 3b; and

(3) incurs reimbursable costs on or after April 8, 1992.

(b) A political subdivision eligible for reimbursement under this subdivision may only apply for reimbursement if the identified responsible person has failed to take a corrective action ordered by the commissioner.

Subd. 3e. Department of transportation eligibility. The department of transportation may apply to the board and is eligible for reimbursement of reimbursable costs associated with property that the department has acquired under section 115C.021, subdivision 3a, if corrective action pursuant to a plan reviewed and approved by the commissioner of the pollution control agency in accordance with applicable rules and guidance documents was taken on the entire property so acquired. Notwithstanding subdivision 3, paragraph (a), the department of transportation shall receive 100 percent of total reimbursable costs associated with a single release up to $1,000,000.

Subd. 3f. Reimbursements; small gasoline retailers. (a) As used in this subdivision, "small gasoline retailer" means a tank owner or operator who owns only one location in this state, and no locations in any other state, where motor fuel was dispensed to the public into motor vehicles, watercraft, or aircraft, and who dispensed motor fuel at that location.

(b) Notwithstanding subdivision 1, paragraph (b), clause (1), for eligible applicants who are small gasoline retailers that have dispensed less than 500,000 gallons of motor fuel during the most recent calendar year that petroleum products were dispensed at the location owned by the retailer, the board shall reimburse the applicant for 90 percent of the applicant's total reimbursable cost for tank removal projects started after January 1, 1996, including, but not limited to, tank removal, closure in place, backfill, resurfacing, and utility service restoration costs, regardless of whether a release has occurred at the site, provided that the tank involved is a regulated underground storage tank.

(c) Notwithstanding subdivision 1, paragraph (b), clause (1), for eligible applicants who are small gasoline retailers that have dispensed less than 250,000 gallons of motor fuel during the most recent calendar year that petroleum products were dispensed at the location owned by the retailer, provided that the tank involved is a regulated underground storage tank, the board shall reimburse the applicant for 95 percent of the following costs:

(1) tank removal costs described in paragraph (b); and

(2) petroleum contamination cleanup as provided under subdivision 1 incurred during or after the tank removal project.

(d) An applicant who owns only one location in this or any other state where motor fuel was dispensed to the public into motor vehicles, watercraft, or aircraft but who did not dispense motor fuel at that location may qualify as a small gasoline retailer if:

(1) the previous tank owner or operator at the location was a small gasoline retailer that dispensed less than 500,000 gallons of motor fuel during the most recent calendar year that petroleum products were dispensed at the location; and

(2) the applicant acquired legal or equitable title to the property after January 1, 1996.

(e) This subdivision expires January 1, 2000.

Subd. 3g. Reimbursements; small business owners. (a) As used in this subdivision, "small business owner" means a person:

(1) who has no more than $250,000 per year in sales;

(2) who owns no more than one location where motor fuel was previously dispensed to the public into motor vehicles;

(3) who did not dispense motor fuel at that location; and

(4) whose tanks were never registered with the state.

(b) Notwithstanding subdivision 1, paragraph (b), clause (1), the board shall reimburse an eligible applicant who is a small business owner for 90 percent of the applicant's total reimbursable cost for tank removal projects started after January 1, 1998, including, but not limited to, tank removal, closure in place, backfill, resurfacing, and utility service restoration costs, regardless of whether a release has occurred at the site, and provided that the person does not intend to replace the tanks.

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.

Subd. 4. Reimbursement does not affect other liability. The right to apply for reimbursement and the receipt of reimbursement does not limit the liability of a responsible person for damages or costs incurred by a person or the state as a result of a release.

Subd. 5. Return of reimbursement. (a) The board may demand the complete or partial return of any reimbursement made under this chapter if the applicant for reimbursement:

(1) misrepresents or omits a fact relevant to a determination made by the board or the commissioner under this chapter;

(2) fails to complete corrective action that the commissioner determined at the time of the reimbursement to be necessary to adequately address the release, unless the reimbursement was made under subdivision 3a;

(3) fails to reimburse a person for agreed-to amounts for corrective actions taken in response to a request by the applicant; or

(4) has entered an agreement to settle or compromise any portion of the incurred costs, in which case the amount returned must be prorated in proportion to the amount of the settlement or compromise.

(b) If a reimbursement under this chapter is not returned upon demand by the board, the board may recover the reimbursement, with administrative and legal expenses, in a civil action in district court brought by the attorney general against the applicant. If the board's demand for return of the reimbursement is based on willful actions of the applicant, the applicant shall also forfeit and pay to the state a civil penalty, in an amount to be determined by the court, of not more than the full amount of the reimbursement.

Subd. 6. Fraud. If a person, with intent to defraud, issues an invoice or other demand for payment with knowledge that it is false in whole or in part, and with knowledge that it is being submitted to the board for reimbursement:

(1) that person shall be considered to have presented a false claim to a public body under section 609.465; and

(2) the board may demand that the person return any money received as a result of a reimbursement made on the basis of the false invoice or other demand for payment. If the money is not returned upon demand by the board, the board may recover the money, with administrative and legal expenses, in a civil action in district court brought by the attorney general against the person. The person shall also forfeit and pay to the state a civil penalty, in an amount to be determined by the court, of not more than the full amount of the money received by the person on the basis of the false invoice or other demand for payment.

Subd. 7. Duty to provide information. (a) A person who submits an application to the board for reimbursement, or who has issued invoices or other demands for payment which are the basis of an application, shall furnish to the board copies of any financial records which the board requests and which are relevant to determining the validity of the costs listed in the application, or shall make the financial records reasonably available to the board for inspection and auditing. The board may obtain access to information required to be made available under this chapter in the manner provided in section 115C.03, subdivision 7.

(b) After reimbursement has been granted, an agreement to settle or compromise any portion of the incurred costs must be reported to the board by the parties to the agreement.

Subd. 8. Limitation on reimbursement obligation. The amount of the state's obligation to make reimbursement under this chapter is limited to the amount available. Notwithstanding any other provisions of this chapter, there shall be no obligation to the general fund to make a reimbursement if there are not sufficient funds in the petroleum tank fund.

Subd. 9. Insufficient funds. The board may not approve an application for reimbursement if there are insufficient funds available to pay the reimbursement.

Subd. 10. Delegation of board's powers. The board may delegate to the commissioner of commerce its powers and duties under this chapter.

HIST: 1987 c 186 s 15; 1987 c 389 s 9; 1988 c 683 s 4-6; 1989 c 226 s 3; 1989 c 335 art 4 s 106; 1990 c 501 s 5-7; 1991 c 175 s 3-9; 1991 c 233 s 52; 1991 c 294 s 2; 1992 c 414 s 3,4; 1992 c 490 s 8,9; 1993 c 341 art 1 s 11-16; 1994 c 632 art 4 s 44; 1995 c 220 s 130; 1995 c 240 art 1 s 4-7; 1996 c 308 s 5; 1996 c 397 s 2; 1997 c 200 art 2 s 5,6; 1997 c 246 s 12,35; 1Sp1998 c 1 art 3 s 16,17; 1999 c 203 s 2,3

* NOTE: See section 115C.13 for repealer.

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