2017 -- S 0560

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LC001335

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

RELATING TO WATERS AND NAVIGATION-RHODE ISLAND UNDERGROUND

STORAGE TANK FINANCIAL RESPONSIBILITY ACT

     Introduced By: Senators Sosnowski, Conley, Calkin, Coyne, and Archambault

     Date Introduced: March 15, 2017

     Referred To: Senate Environment & Agriculture

     (Dept. of Environmental Management)

It is enacted by the General Assembly as follows:

     SECTION 1. Sections 46-12.9-3, 46-12.9-4, 46-12.9-5, 46-12.9-6, 46-12.9-7, 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) "Advisory board" means the Rhode Island underground storage tank financial

responsibility advisory board established pursuant to the provisions of § 46-12.9-8.

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

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

or her designee.

     (4) "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 performed by the responsible party and

not specifically identified by the department as ineligible.

     (5) "Facility" means any parcel of real estate or contiguous parcels of real estate owned

and/or operated by the same person(s), which together with all land, structures, facility

components, improvements, fixtures and other appurtenances located therein form a distinct

geographic unit and at which petroleum products or hazardous materials are or have been stored

in underground storage tanks.

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

fund established herein.

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

daily operation of an underground, storage-tank system.

     (7)(8) "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 person,

corporation, group, or other entity who holds exclusive or joint title to, or lawful possession of, a

facility or part of a facility.

     (8)(9) "Petroleum product" means crude oil, crude-oil fractions, and refined-petroleum

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

oil or any fractions thereof that is liquid at standard conditions of temperature sixty degrees

Fahrenheit (60°F) and pressure fourteen and seven tenths pounds per square inch absolute (14.7

psia) and includes substances derived from crude oil including, but not limited to, the following:

     (i) Gasoline;

     (ii) Fuel Oils;

     (iii) Diesel Oils;

     (iv) Waste Oils;

     (v) Gasohol, lubricants and solvents.

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

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

environment. means any spilling, leaking, pumping, pouring, injecting, emitting, escaping,

leaching, discharging or disposing of any material stored in an underground storage tank system

subject to these regulations into groundwater, surface water, soil, air or any other environmental

media.

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

or the remediation of a release.

     (11) (i)(12) "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-tank

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

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underground storage tank 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 "UST" or "Underground storage

tank system" means any one or more underground tanks, and their associated components,

including piping, used to contain, transport, or store petroleum product or hazardous material

whose volume is ten percent (10%) or more beneath the surface of the ground.

     46-12.9-4. Petroleum cleanup fund.

     (a) There is hereby established the Rhode Island underground storage tank financial

responsibility fund.

     (b) The fund shall consist of any funds which the state may from time to time

appropriate, as well as money received as gifts, grants, bequests, donations or other funds from

any public or private sources or annual tank registration fees as established herein which are

intended to serve the purposes of the Rhode Island underground tank financial responsibility fund

and all funds collected pursuant to § 46-12.9-11.

     (c) All funds collected pursuant to this section shall be deposited in the underground

storage tank fees fund, and shall be disbursed according to the purposes expressed in § 46-12.9-5.

     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 department 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

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

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responsible party shall may 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); provided, that such claims are

found by the department to be justified, reasonable, related to the release of petroleum, and not

excessive or spurious in nature;

     (3) Eligible costs 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 undertake such activities.

In the event of such failure or documented inability to comply, the department may access the

fund to perform the ordered work and shall may 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; and

     (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, 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) [Deleted by P.L. 2016, ch. 148, § 1 and P.L. 2016, ch. 160, § 1].

     46-12.9-6. Eligibility.

     (a) In order to be eligible for reimbursement from the fund for eligible costs a responsible

party must be subject to financial responsibility as required by the EPA (40 C.F.R. part 280

subpart H) and:

     (1) Have substantially complied with all state technical regulatory requirements for

underground storage tanks and underground storage tank systems as promulgated by the

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department of environmental management pursuant to chapter 12 of this title and chapter 17.1 of

title 42, including, but not limited to, requirements for registration, proper installation, spill

containment, line leak detection, corrosion protection, leak detection, tank tightness testing,

inventory control, closure and leak or spill reporting;

     (2) Have incurred an eligible cost in excess of the deductible amount specified in § 46-

12.9-5(b)(1) whether for clean-up or related matters or for claims of third parties as set forth in §

46-12.9-3 resulting from a release of petroleum, subject to the motor and special fuels tax from an

underground storage tank or underground storage tank system. In order to apply for

reimbursement from the fund, it shall not be necessary that the third party and the responsible

party complete adjudication of any claim before submission to the review board department;

provided, however, that all such claims shall be reasonably verified and must be demonstrated to

the reasonable satisfaction of the review board department in order to be considered eligible for

reimbursement.

     (b) Notwithstanding the financial responsibility requirement of this section, responsible

parties may be eligible for reimbursement of eligible costs incurred for government sites provided

that:

     (1) A city, town, the state or a state agency is the responsible party for a release at the

government site and was the owner of the site at the time of the release;

     (2) A city, town, the state or a state agency is the responsible party and owner of the

government site at the time of application on which a release occurred prior to the city, town or

state agency's ownership, provided that the government entity purchased the property prior to

March 1, 1998; or

     (3) A city, town, the state or a state agency was the responsible party at the time of the

release and the government site is owned by a successor in interest at the time of application.

     (c) Incurred costs eligible for reimbursement may be submitted to the department up to

two (2) years from the date on the originally-issued invoice(s) for the incurred costs. Any

invoices submitted after this two (2) year deadline will be considered ineligible for

reimbursement.

     (c)(d) Notwithstanding the requirement that the released petroleum be subject to the

motor and special fuels tax, underground storage tanks containing petroleum products for which

the motor and special fuels tax is inapplicable including, but not limited to, underground storage

tanks used for the distribution of No. 2 heating oil, used/waste oil, kerosene or other materials as

deemed appropriate by the review board department may be eligible for reimbursement with the

following exceptions:

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     (1) Underground storage tanks containing heating or fuel oils used solely for onsite

consumption shall not be eligible.

     (2) Underground storage tanks exempted from the department's "regulations for

underground storage facilities used for petroleum products and hazardous materials" under

Section 5.03 and Section 9.01 (A-D) shall not be eligible.

     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 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 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/or contractor for the remediation of a release; and

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

financial responsibility.

     46-12.9-9. Reconsideration hearing.

     Any person aggrieved by a decision on a claim submitted to the department may request

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a reconsideration hearing before the department of environmental management administrative

adjudication division under the provisions of the regulations of that office and such regulations

shall 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 department of

environmental management administrative adjudication division, 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 distributor 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-per-gallon ($0.01) 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 fund. All environmental protection regulatory fees paid to the department, including

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

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 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

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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 advisory board and the department that the fund has

reached a balance sufficient to satisfy all pending or future claims, the 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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LC001335

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO WATERS AND NAVIGATION-RHODE ISLAND UNDERGROUND

STORAGE TANK FINANCIAL RESPONSIBILITY ACT

***

     This act would amend the Rhode Island Underground Storage Tank Financial

Responsibility Act to streamline fund processes and amends or provides several new definitions.

The act would also assist the department of environmental management in accessing the

underground storage tank financial responsibility fund to conduct environmental cleanup for

business owners.

     This act would take effect upon passage.

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LC001335

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