House Bill No. 214

Introduced By grady, orr, beck, ellingson



A Bill for an Act entitled: An Act revising the funding and cost reimbursement provisions of the Petroleum Tank Release Compensation laws; clarifying and imposing limitations on cost reimbursement; authorizing loans by the board of investments to the Petroleum Tank Release Compensation Board; pledging the petroleum storage tank cleanup fees for loan repayment; amending sections 75-11-307, 75-11-313, and 75-11-318, MCA; and providing an effective date.



Be it enacted by the Legislature of the State of Montana:



Section 1.  Loans to petroleum tank release compensation board. (1) The board of investments may loan funds to the petroleum tank release compensation board to cover temporary cash shortfalls. The total of all loans may not exceed the greater of $15 million or 80% of the fees that the office of budget and program planning projects will be collected under 75-11-314 during the next 3 fiscal years. A loan must be amortized, based on projected fee revenue, over a period of not more than 10 years.

(2) The board shall establish the interest rate on the loan, considering the security and the term of the loan.



Section 2.  Section 75-11-307, MCA, is amended to read:

"75-11-307.   Reimbursement for expenses caused by a release. (1) Subject to the availability of money from the fund under subsection (5), an owner or operator who is eligible under 75-11-308 and who complies with 75-11-309 and any rules adopted to implement those sections must be reimbursed by the board from the fund for the following eligible costs caused by a release from a petroleum storage tank:

(a)  corrective action costs as required by a department-approved corrective action plan except if the corrective action plan addresses releases of substances other than petroleum products from an eligible petroleum storage tank, the board may reimburse only the costs that would have reasonably been incurred if the only release at the site was the release of the petroleum or petroleum products from the eligible petroleum storage tank; and

(b)  compensation paid to third parties for bodily injury or property damage. The board may not reimburse for property damage until the corrective action is completed.

(2)  An owner or operator may not be reimbursed from the fund for the following expenses:

(a)  corrective action costs or the costs of bodily injury or property damage paid to third parties that are determined by the board to be ineligible for reimbursement;

(b)  costs for bodily injury and property damage, other than corrective action costs, incurred by the owner or operator;

(c)  penalties or payments for damages incurred under actions by the department, board, or federal, state, local, or tribal agencies or other government entities involving judicial or administrative enforcement activities and related negotiations;

(d)  attorney fees and legal costs of the owner, the operator, or a third party;

(e)  costs for the repair or replacement of a tank or piping or costs of other materials, equipment, or labor related to the operation, repair, or replacement of a tank or piping;

(f)  expenses incurred before April 13, 1989, for owners or operators seeking reimbursement from the petroleum tank release cleanup fund and expenses incurred before May 15, 1991, for owners or operators seeking reimbursement from the petroleum tank release cleanup fund for a tank storing heating oil for consumptive use on the premises where it is stored or for a farm or residential tank with a capacity of 1,100 gallons or less that is used for storing motor fuel for noncommercial purposes;

(g)  expenses exceeding the maximum reimbursements provided for in subsection (4); and

(h)  expenses for work completed by or on behalf of the owner or operator more than 2 years prior to the owner's or operator's request for reimbursement. This limitation does not apply to claims for compensation paid to third parties for bodily injury or property damage.

(3)  An owner or operator may designate a person as an agent to receive the reimbursement, provided that if the owner or operator remains legally responsible for all costs and liabilities incurred as a result of the release.

(4)  Subject to the availability of funds under subsection (5):

(a)  for releases eligible for reimbursement from the petroleum tank release cleanup fund that are discovered and reported on or after April 13, 1989, from a tank storing heating oil for consumptive use on the premises where it is stored or from a farm or residential tank with a capacity of 1,100 gallons or less that is used for storing motor fuel for noncommercial purposes, the board shall reimburse an owner or operator for:

(i)  50% of the first $10,000 of eligible costs and 100% of subsequent eligible costs, up to a maximum total reimbursement of $495,000:

(A)  for single-walled tank system releases; and

(B)  for double-walled tank system releases for which the release date was prior to October 1, 1993; or

(ii) 100% of the eligible costs, up to a maximum total reimbursement of $500,000, for properly designed and installed double-walled tank system accidental releases that were discovered and reported on or after October 1, 1993; and

(b)  for all other releases eligible for reimbursement from the petroleum tank release cleanup fund that are discovered and reported on or after April 13, 1989, the board shall reimburse an owner or operator for:

(i)  50% of the first $35,000 of eligible costs and 100% of subsequent eligible costs, up to a maximum total reimbursement of $982,500:

(A)  for single-walled tank system releases; and

(B)  for double-walled tank system releases for which the release date was prior to October 1, 1993; or

(ii) 100% of the eligible costs, up to a maximum total reimbursement of $1 million, for properly designed and installed double-walled tank system accidental releases that were discovered and reported on or after October 1, 1993.

(5)  If the fund does not contain sufficient money to pay approved claims for eligible costs, a reimbursement may not be made and the fund and the board are not liable for making any reimbursement for the costs at that time. When the fund contains sufficient money, eligible costs must be reimbursed subsequently in the order in which they were approved by the board."



Section 3.  Section 75-11-313, MCA, is amended to read:

"75-11-313.   Petroleum tank release cleanup fund. (1) There is a petroleum tank release cleanup fund in the state special revenue fund established in 17-2-102. The fund is administered as a revolving fund by the board and is statutorily appropriated, as provided in 17-7-502, for the purposes provided for under subsections (3)(b) and (3)(c). Administrative costs under subsection (3)(a) must be paid pursuant to a legislative appropriation.

(2)  There is deposited in the fund:

(a)  all revenue from the petroleum storage tank cleanup fee as provided in 75-11-314;

(b)  money received by the board in the form of gifts, grants, reimbursements, or appropriations, from any source, intended to be used for the purposes of this fund;

(c)  money appropriated or advanced to the fund by the legislature; and

(d) money loaned to the board by the board of investments; and

(d)(e)  all interest earned on money in the fund.

(3)  The fund may be used only:

(a)  to administer this part, including payment of board and department expenses associated with administration;

(b)  to reimburse owners and operators for eligible costs caused by a release from a petroleum storage tank and approved by the board; and

(c)  for repayment of any advance made under subsection (4) and any loan made pursuant to [section 1], plus interest earned on the advance or loan.

(4)  (a) The legislature may appropriate to the fund repayable advances as necessary to carry out the purposes of this part. The outstanding total of repayable advances may not exceed the amount that the board estimates will be received by the fund from the petroleum storage tank cleanup fee during the next 24 months.

(b)  Advances to the fund must be repaid, and interest earned on advances must be paid to the general fund when determined appropriate by the board. However, all advances to the fund plus the interest earned must be repaid on or before December 31, 1995 by the board within 24 months of receipt of the advance.

(5) Whenever the board accepts a loan from the board of investments pursuant to [section 1], the receipts from the fees provided for in 75-11-314 in each fiscal year until the loan is repaid are pledged and dedicated for the repayment of the loan in an amount sufficient to meet the repayment obligation for that fiscal year."



Section 4.  Section 75-11-318, MCA, is amended to read:

"75-11-318.   Powers and duties of board. (1) The board shall administer the petroleum tank release cleanup fund in accordance with the provisions of this part, including the payment of reimbursement to owners and operators.

(2)  The board shall determine whether to approve reimbursement of eligible costs under the provisions of 75-11-309(2), shall obligate money from the fund for approved costs, and shall act on requests for the guarantee of payments through the procedures and criteria provided in 75-11-309.

(3)  The board may conduct meetings, hold hearings, undertake legal action, and conduct other business as may be necessary to administer its responsibilities under this part. The board shall meet at least quarterly for the purpose of reviewing and approving claims for reimbursement from the fund and conducting other business as necessary.

(4)  The board may hire staff, and the department shall provide staff support to the board as the department determines it is able. The board shall use the fund to pay its staff expenses, to pay for department staff utilized used for the review or preparation of corrective action plans and for the oversight of corrective action undertaken by owners and operators for the purposes of this part, and to pay for department of transportation staff utilized used for the collection of the petroleum storage tank cleanup fee.

(5)  The board shall adopt rules to administer this part, including:

(a)  rules governing submission of claims by owners or operators to the department and board;

(b)  procedures for determining owners or operators who are eligible for reimbursement and determining the validity of claims;

(c)  procedures for the review and approval of corrective action plans;

(d)  procedures for conducting board meetings, hearings, and other business necessary for the implementation of this part; and

(e)  other rules necessary for the administration of this part.

(6) The board may apply for, accept, and repay loans from the board of investments pursuant to [section 1]."



Section 5.  Nonimpairment by state. In accordance with the constitutions of the United States and the state of Montana, the state pledges that it may not in any way impair the obligations of any loan agreement between the board and the board of investments by repealing the petroleum storage tank cleanup fee imposed by 75-11-314 or by reducing it below the amount necessary to make annual loan payments.



Section 6.  Codification instruction. (1) [Section 1] is intended to be codified as an integral part of Title 17, chapter 6, part 2, and the provisions of Title 17, chapter 6, part 2, apply to [section 1].

(2) [Section 5] is intended to be codified as an integral part of Title 75, chapter 11, part 3, and the provisions of Title 75, chapter 11, part 3, apply to [section 5].



Section 7.  Effective date. [This act] is effective July 1, 1997.

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