2016 -- S 2399

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LC003227

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO WATERS AND NAVIGATION - RI UNDERGROUND STORAGE TANK

FINANCIAL RESPONSIBILITY ACT

     

     Introduced By: Senators Sosnowski, Conley, Felag, Kettle, and Coyne

     Date Introduced: February 11, 2016

     Referred To: Senate Environment & Agriculture

     It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 46-12.9-3, 46-12.9-5, 46-12.9-7, 46-12.9-8, 46-12.9-9 and 46-

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12.9-11 of the General Laws in Chapter 46-12.9 entitled "Rhode Island Underground Storage

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Tank Financial Responsibility Act" are hereby amended to read as follows:

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     46-12.9-3. Definitions. -- When used in this chapter:

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      (1) "Department" means the Rhode Island department of environmental management.

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      (2) "Director" means the director of the department of environmental management or his

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or her designee.

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      (3) "Eligible costs" means costs, expenses and other obligations as incurred by a

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responsible party for site investigation, site remediation or other corrective action activities

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ordered, or directed, and approved by the department or voluntarily performed by the responsible

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party and not specifically identified by the review board department as ineligible.

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      (4) "Fund" means the Rhode Island underground storage tank financial responsibility

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fund established herein.

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      (5) "Operator" means any person in control of, or having the responsibility for, the daily

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operation of an underground storage tank system.

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      (6) "Owner" means any agency or political subdivision of the state, any municipality,

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public or private corporation or authority, individual, trust, firm, joint stock company,

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partnership, association or other entity, and any officer, employee or agent thereof.

 

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      (7) "Petroleum" means crude oil, crude oil fractions, and refined petroleum fractions,

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including gasoline, kerosene, heating oils, used/waste oil and diesel fuels.

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      (8) "Release" means any leaking, emitting, discharging, escaping or leaching of

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petroleum from any underground storage tank or underground storage tank system into the

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environment.

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      (9) "Responsible party" means the person or persons liable for release of petroleum or

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the remediation of a release.

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      (10) "Review Advisory board" means the Rhode Island underground storage tank

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financial responsibility review advisory board established pursuant to the provisions of § 46-12.9-

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8.

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      (11) (i) "Site" means any location at which or from which there has been a release of

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petroleum associated with an underground storage tank or an underground storage tanks system

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or any location to which such petroleum has migrated.

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      (ii) For the purposes of this chapter, "government site" means any location owned or

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occupied, or previously owned or occupied, by any city or town, the state or any agency of the

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state of which or from which there has been a release of petroleum associated with an

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underground storage tanker and underground storage tank system.

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      (12) "Underground storage tank" means any one or combination of tanks, including

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underground pipes connected thereto, used to contain an accumulation of petroleum and the

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volume of which, including the volume of underground pipes connected thereto, is ten percent

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(10%) or more beneath the surface of the ground.

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      (13) "Underground storage tank system" means an underground storage tank and its

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associated ancillary equipment and containment system, if any.

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     46-12.9-5. Purpose of fund. -- (a) The purpose of the fund shall be to facilitate the clean-

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up of releases from leaking underground storage tanks, underground storage tank systems,

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including those located on sites or government sites in order to protect the environment including

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drinking water supplies and public health and to take necessary action to proactively prevent such

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releases.

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      (b) The fund shall provide reimbursement to responsible parties for the eligible costs

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incurred by them as a result of releases of certain petroleum from underground storage tanks or

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underground storage tank systems as provided herein. Monies in the fund shall be dispensed only

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upon the order of the review board or its designee for the following purposes.

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      (1) The fund shall pay not more than one million dollars ($1,000,000) per incident and

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up to two million dollars ($2,000,000) in the aggregate for damages of eligible costs, as defined

 

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in regulations promulgated hereunder and, as further defined in § 46-12.9-3 excluding legal costs

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and expenses, incurred by a responsible party as a result of a release of petroleum from an

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underground storage tank or underground storage tank system; provided, however, that a

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responsible party shall be responsible for the first twenty thousand dollars ($20,000) of said

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eligible costs;

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      (2) Reimbursement for any third party claim including, but not limited to, claims for

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bodily injury, property damage and damage to natural resources which are asserted against a

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responsible party and which have arisen as a result of a release of petroleum from an underground

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storage tank or underground storage tank system in an amount not to exceed one million dollars

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($1,000,000) for each release as set forth in subsection (b)(1) of this section; provided, that such

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claims are found by the review board to be justified, reasonable, related to the release of

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petroleum and not excessive or spurious in nature; and

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      (3) Eligible costs incurred by the department in carrying out the investigative, remedial

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and corrective action activities at sites of a petroleum release associated with an underground

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storage tank or underground storage tank system where the responsible party fails to comply with

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an order of the department to take such corrective action. In the event of such failure, the

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department may access the fund to perform the ordered work and shall proceed to recover from

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the responsible party on behalf of the fund any amount expended from the fund by the

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department.

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      (4) Nothing contained in this chapter shall be construed to prevent subrogation by the

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state of Rhode Island against any responsible party other than the owner and/or operator for all

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sums of money which the fund shall be obligated to pay hereunder plus reasonable attorneys' fees

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and costs of litigation and such right of subrogation is hereby created.

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      (5) Eligible costs incurred by the department to support the fund, including, but not

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limited to, all personnel support to process and review of claims in order to formulate

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recommendations for reimbursement for consideration by the review board, and providing

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meeting space for board meetings; provided, however, that no more than five hundred and fifty

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thousand dollars ($550,000) shall be dispensed from the fund for administrative purposes during

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any fiscal year. The department shall directly access the fund, pursuant to the limits set forth in

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subdivision 46-12.9-5(b)(1), to pay for such expenses.

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      (6) Grants to any third party for purposes of removal of underground storage tanks

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and/or replacement of underground storage tanks with other fuel storage and distribution systems,

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including aboveground storage tanks, when such removal and/or replacement will minimize the

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potential future exposure of the fund to major expenses related to reimbursement of costs incurred

 

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in response or remediation should a future release occur. Grants under this section shall be limited

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to fifty thousand dollars ($50,000) per site and shall be in addition to any eligible reimbursement

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for clean up expenses at that site.

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     46-12.9-7. Rules and regulations. -- The department is hereby authorized to promulgate,

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implement and amend regulations, in accordance with the provisions of chapter 35 of title 42,

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providing for the submission of claims to the fund and the timely disbursement of monies from

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the fund. Such regulations shall include, but not be limited to, the following:

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      (1) A means of notifying all eligible parties of the existence and functioning of the fund;

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      (2) The record keeping required of eligible parties for submission to and reimbursement

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from the fund;

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      (3) A set criteria which establishes the eligibility for reimbursement of specific costs,

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expenses and other obligations;

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      (4) A method of providing periodic reimbursement for eligible costs incurred by an

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eligible party after July 8, 1994;. Such reimbursement shall be processed in the order that the

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claims were filed, subject to funds availability, except in the case where the director finds that

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funds must be expended out of order in order to abate an environmental emergency;

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      (5) A requirement that the review board department render its decisions to an eligible

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party upon the receipt of a complete claim for reimbursement within ninety (90) days following

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its receipt of completed claim;

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      (6) Establishing procedures for verifying claims presented under this chapter;

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      (7) Establishing procedures for approving, modifying or denying claims;

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      (8) The eligibility of claims shall be determined by the review board department;

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provided however, that no claims shall be considered for costs incurred prior to January 1, 1994

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by responsible parties who are owners or operators of no more than one location containing

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underground storage tanks and July 8, 1994 by all other responsible parties.

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      (9) Empowering the department to recognize and arrange for performance-based and

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other contracts with the responsible party and contractor for the remediation of a release.

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      (10) Empowering the department to arrange for the establishment of alternate means of

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financial responsibility.

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     46-12.9-8. Review board. -- Advisory board. -- (a) There is hereby authorized, created

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and established the "underground storage tank review advisory board," to approve, modify, or

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deny disbursements to eligible parties and to have such other powers as are provided herein.

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      (b) The review advisory board shall consist of nine (9) seven (7) members, as follows:

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the director of the department of environmental management or his or her designee who shall be a

 

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subordinate within the department of environmental management. The governor, with the advice

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and consent of the senate, shall appoint eight (8) six (6) public members one of whom shall have

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expertise and experience in financial matters. In making these appointments the governor shall

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give due consideration to recommendations from the American Petroleum Institute, the

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Independent Oil Marketers Association, the Oil Heat Institute, the Environment Council, the

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Independent Oil Dealers Association and the Rhode Island Marine Trade Association. The newly

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appointed members will serve for a term of three (3) years commencing on the day they are

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qualified. Any vacancy which may occur on the board shall be filled by the governor, with the

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advice and consent of the senate, for the remainder of the unexpired term in the same manner as

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the member's predecessor as prescribed in this section. The members of the board shall be eligible

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to succeed themselves. Members shall serve until their successors are appointed and qualified. No

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one shall be eligible for appointment unless he or she is a resident of this state. The members of

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the board shall serve without compensation. Those members of the board as of the effective date

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of this act [July 15, 2005]who were appointed to the board by members of the general assembly

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shall cease to be members of the board on the effective date of this act, and the governor shall

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thereupon nominate three (3) members, each of whom shall serve the balance of the unexpired

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term of his or her predecessor. Those members of the board as of the effective date of this act

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[July 15, 2005]who were appointed to the board by the governor shall continue to serve the

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balance of their current terms. Thereafter, the appointments shall be made by the governor as

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prescribed in this section.

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      (c) When claims are pending, the review The advisory board shall meet at the call of the

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chair. All meetings shall be held consistent with chapter 46 of title 42.

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      (d) The review advisory board and its corporate existence shall continue until terminated

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by law. Upon termination of the existence of the review advisory board, all its rights and

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properties shall pass to and be vested in the state.

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      (e) The review advisory board shall have the following powers and duties, together with

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all powers incidental thereto or necessary for the performance of those stated in this chapter:

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      (1) To elect or appoint officers and agents of the review advisory board, and to define

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their duties:

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      (2) To make and alter bylaws, not inconsistent with this chapter, for the administration of

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the affairs of the review advisory board. Such bylaws may contain provisions indemnifying any

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person who is or was a director or a member of the review advisory board, in the manner and to

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the extent provided in § 7-6-6 of the Rhode Island nonprofit corporation act;

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      (3) To oversee, review, and evaluate the condition and performance of the underground

 

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storage tank fund and approve and submit an annual report within ninety (90) days after the end

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of each fiscal year to the governor, the speaker of the house of representatives, the president of

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the senate, and the secretary of state, of its activities during that fiscal year. The report shall

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provide information provided by the department, including;: an operating statement summarizing

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meetings or hearings held, including meeting minutes, subjects addressed, and decisions

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rendered; a summary of the review advisory board's actions, fees levied, collected or received as

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prescribed in §§ 46-12.9-7 and 46-12.9-11, claims submitted, verified, approved, modified, and

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denied as prescribed in § 46-12.9-7, and reconsideration hearings held as prescribed in § 46-12.9-

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9; a synopsis of any law suits or other legal matters related to the authority of the review board

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fund; and a summary of performance during the previous fiscal year including accomplishments,

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shortcomings and remedies; a briefing on anticipated activities in the upcoming fiscal year; and

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findings and recommendations for improvements; and a summary of any training courses held

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pursuant to subdivision (f)(15) of this section. The report shall be posted electronically as

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prescribed in § 42-20-8.2. The advisory board may make recommendations or suggestions on the

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claims process and/or the condition and management of the fund, and the department shall

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respond, in writing, to any of these suggestions or recommendations.

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      (4) To conduct a training course for newly appointed and qualified members and new

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designees of ex-officio members within six (6) months of their qualification or designation. The

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course shall be developed by the executive director, approved by the board, and conducted by the

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executive director. The board may approve the use of any board or staff members or other

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individuals to assist with training. The training course shall include instruction in the following

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areas: the provisions of chapters 46-12.9, 42-46, 36-14, and 38-2; and the boards rules and

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regulations. The director of the department of administration shall, within ninety (90) days of the

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effective date of this act [July 15, 2005] prepare and disseminate training materials relating to the

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provisions of chapters 36-14, 38-2, and 42-46.

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      (f) Upon the passage of this act and the appointment and qualification of the three (3)

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new members prescribed in subsection (b) of this section, the board shall elect from among its

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members a chair. Thereafter, the board shall elect annually in February a chair from among the

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members. The board may elect from among its members such other officers as it deems

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necessary.

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      (g) Six (6) Four (4) members of the board shall constitute a quorum and the vote of the

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majority of the members present shall be necessary and shall suffice for any action taken by the

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board. No vacancy in the membership of the board shall impair the right of a quorum to exercise

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all of the rights and perform all of the duties of the board.

 

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      (h) Members of the board shall be removable by the governor pursuant to section 36-17

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and removal solely for partisan or personal reasons unrelated to capacity or fitness for the office

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shall be unlawful.

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     46-12.9-9. Reconsideration hearing. -- Any person aggrieved by a decision of the

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review board on a claim submitted to the department may request a reconsideration hearing

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before the review board department of environmental management administrative adjudication

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division under the provisions of the regulations of the board and such regulations shall that office

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be consistent with the Rhode Island Administrative Procedures Act, chapter 35 of title 42. Any

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such decision shall contain a notice of the right to request a hearing and may specify a reasonable

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time limit, not to exceed twenty-one (21) days within which said person shall request a hearing. If

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no such request is made in a timely manner, the said person shall be deemed to have assented to

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the decision. If a timely request is received, the review board within a reasonable period of time

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shall act upon such request in accordance with the provisions of the Rhode Island Administrative

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Procedures Act.

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     46-12.9-11. Fundings. -- (a) There is hereby imposed an environmental protection

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regulatory fee of one cent ($0.01) per gallon payable of motor fuel, to be collected by distributors

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of motor fuel when the product is sold to owners and/or operators of underground storage tanks.

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Each distributor shall be responsible to the tax administrator for the collection of the regulatory

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fee, and if the distributor is unable to recover the fee from the person who ordered the product,

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the distribution shall nonetheless remit to the tax administrator the regulatory fee associated with

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the delivery. In accordance with the regulations to be promulgated hereunder, the fee shall be

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collected, reported, and paid to the Rhode Island division of taxation as a separate line item entry,

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on a quarterly tax report by those persons charged with the collection, reporting, and payment of

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motor fuels taxes. This fee shall be administered and collected by the division of taxation.

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Notwithstanding the provisions of this section, the fee shall not be applicable to purchases by the

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United States government.

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      (b) Of the one cent ($0.01) per gallon environmental protection regulatory fee collected

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by distributors of motor fuel and paid to the Rhode Island division of taxation, one-half cent

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($0.005) shall be deposited in the Intermodal Surface Transportation Fund to be distributed

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pursuant to § 31-36-20 and one-half cent ($0.005) shall be paid to the underground storage tank

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review board. All environmental protection regulatory fees paid to the review board, including

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tank registration fees assessed pursuant to § 46-12.9-7(9), shall be received by the review board,

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which shall keep such money in a distinct interest bearing restricted receipt account to the credit

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of and for the exclusive use of the fund provided that for the period January 1, 2008 through June

 

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30, 2008, all revenues generated by the environmental protection regulatory fee up to a maximum

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of two million dollars ($2,000,000) shall be deposited into the general fund. In fiscal year 2009,

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all revenues generated by the environmental protection regulatory fee up to a maximum

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equivalent to two million two hundred thirty-seven thousand five hundred dollars ($2,237,500)

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shall be deposited into the Intermodal Surface Transportation Fund. All fees collected may be

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invested as provided by law and all interest received on such investment shall be credited to the

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fund.

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      (c) When the fund reaches the sum of eight million dollars ($8,000,000), the imposition

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of the fee set forth in this chapter shall be suspended, and the division of taxation shall notify all

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persons responsible for the collection, reporting and payments of the fee of the suspension. In the

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event that the account balance of the fund subsequently is reduced to a sum less than five million

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dollars ($5,000,000) as a result of fund activity, the fee shall be reinstated by the division of

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taxation, following proper notice thereof, and once reinstated, the collection, reporting, and

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payment of the fee shall continue until the account balance again reaches the sum of eight million

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dollars ($8,000,000).

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      (d) Upon the determination by the review advisory board and the department that the

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fund has reached a balance sufficient to satisfy all pending or future claims, the review advisory

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board shall recommend to the general assembly the discontinuation of the imposition of the fee

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created in this section.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO WATERS AND NAVIGATION - RI UNDERGROUND STORAGE TANK

FINANCIAL RESPONSIBILITY ACT

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     This act would make the underground storage tank review board an advisory board

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reducing membership from nine (9) to seven (7) members, removing fifty thousand dollars

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($50,000) in grants for removal/replacement of underground storage tanks, and making other

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technical changes to the hearing and claim procedures.

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     This act would take effect upon passage.

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