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:

     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-

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

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

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

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

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

or her designee.

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

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

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

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

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

fund established herein.

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

operation of an underground storage tank system.

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

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

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

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

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

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

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

environment.

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

the remediation of a release.

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

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

8.

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

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

or any location to which such petroleum has migrated.

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

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

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

underground storage tanker and underground storage tank system.

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

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

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

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

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

associated ancillary equipment and containment system, if any.

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

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

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

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

releases.

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

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

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

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

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

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

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

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

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

eligible costs;

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

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

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

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

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

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

petroleum and not excessive or spurious in nature; and

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

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

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

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

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

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

department.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

for clean up expenses at that site.

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

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

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

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

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

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

from the fund;

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

expenses and other obligations;

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

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

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

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

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

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

its receipt of completed claim;

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

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

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

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

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

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

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

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

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

financial responsibility.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

prescribed in this section.

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

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

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

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

properties shall pass to and be vested in the state.

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

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

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

their duties:

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

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

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

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

      (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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

necessary.

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

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

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

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

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

shall be unlawful.

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

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

before the review board department of environmental management administrative adjudication

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

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

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

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

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

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

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

Procedures Act.

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

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

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

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

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

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

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

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

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

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

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

United States government.

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

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

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

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

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

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

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

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

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

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

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

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

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

fund.

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

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

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

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

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

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

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

dollars ($8,000,000).

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

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

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

created in this section.

     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

***

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

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

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

technical changes to the hearing and claim procedures.

     This act would take effect upon passage.

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LC003227

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