2022 -- H 7921

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LC005254

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO WATERS AND NAVIGATION -- RHODE ISLAND UNDERGROUND

STORAGE TANK FINANCIAL RESPONSIBILITY ACT

     

     Introduced By: Representatives Slater, and Diaz

     Date Introduced: March 07, 2022

     Referred To: House Finance

     (Dept. of Environmental Management)

It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 46-12.9-3, 46-12.9-5, 46-12.9-6, 46-12.9-7 and 46-12.9-11 of the

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General Laws in Chapter 46-12.9 entitled "Rhode Island Underground Storage Tank Financial

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Responsibility Act" are hereby amended to read as follows:

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     46-12.9-3. Definitions.

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     When used in this chapter:

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     (1) "Advisory board" means the Rhode Island underground storage tank financial

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

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

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

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his or her designee.

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     (4)(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 ordered

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or directed, and approved, by the department or performed by the responsible party and not

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specifically identified by the department as ineligible.

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

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

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improvements, fixtures, and other appurtenances located therein, form a distinct geographic unit

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and at which petroleum products or hazardous materials are or have been stored in underground

 

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storage tanks.

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

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fund established herein.

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     (7)(6) "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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     (8)(7) "Owner" means any person, corporation, group, or other entity who or that holds

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exclusive or joint title to, or lawful possession of, a facility or part of a facility.

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     (9)(8) "Petroleum product" means crude oil, or any fractions thereof, that is liquid at

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standard conditions of temperature sixty degrees Fahrenheit (60°F) and pressure fourteen and seven

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tenths pounds per square inch absolute (14.7 psia) and includes substances derived from crude oil

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including, but not limited to, the following:

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     (i) Gasoline;

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     (ii) Fuel Oils;

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     (iii) Diesel Oils;

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     (iv) Waste Oils;

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     (v) Gasohol, lubricants and solvents.

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     (10)(9) "Release" means any spilling, leaking, pumping, pouring, injecting, emitting,

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

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

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environmental media.

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

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or the remediation of a release.

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     (12)(11) "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 tank system, or

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any location to which such petroleum has migrated.

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     (13)(12) "UST" or "Underground storage tank system" means any one or more

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underground tanks, and their associated components, including piping, used to contain, transport,

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or store petroleum product or hazardous material whose volume is ten percent (10%) or more

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beneath the surface of the ground.

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     46-12.9-5. Purpose of fund.

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     (a) The purpose of the fund shall be to facilitate the clean-up of releases from leaking

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underground storage tanks, underground storage tank systems, residential heating oil tanks,

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including those located on sites in order to protect the environment, including drinking water

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supplies and public health.

 

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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, or residential heating oil tanks as provided herein. Monies in

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the fund shall be dispensed only upon the order of the department 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 up

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

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

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

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storage tank, or underground storage tank system, or residential heating oil tank; provided,

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however, that a responsible party may be responsible for the first twenty thousand dollars ($20,000)

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of said eligible costs;

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

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injury, property damage, and damage to natural resources that are asserted against a responsible

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party and that have arisen as a result of a release of petroleum from an underground storage tank,

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or underground storage tank system, or residential heating oil tank, in an amount not to exceed one

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million dollars ($1,000,000) for each release as set forth in subsection (b)(1); provided, that such

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claims are found by the department to be justified, reasonable, related to the release of petroleum,

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and not excessive or spurious in nature;

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     (3) Costs incurred by the department in carrying out the investigative, remedial, and

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

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tank, or underground storage tank system, or residential heating oil tank where the responsible party

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fails to comply with an order of the department to undertake such activities. In the event of such

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failure or documented inability to comply, the department may access the fund to perform the

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ordered work and may proceed to recover from the responsible party, on behalf of the fund, any

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amount expended from the fund by the department;

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

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

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of money that the fund shall be obligated to pay hereunder, plus reasonable attorney's fees and costs

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of litigation and such right of subrogation is hereby created; and

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

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to, all personnel support to process and review claims in order to formulate recommendations for

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reimbursement for consideration, and providing meeting space for board meetings; provided,

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however, that no more than five hundred and fifty thousand dollars ($550,000) seven hundred fifty

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thousand dollars ($750,000) 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 (b)(1) of this section, to pay for such expenses.

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

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     46-12.9-6. Eligibility.

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

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

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H) and:

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

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

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environmental management pursuant to chapter 12 of this title and chapter 17.1 of title 42,

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

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line leak detection, corrosion protection, leak detection, tank tightness testing, inventory control,

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closure, and leak or spill reporting;

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

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

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

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

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

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adjudication of any claim before submission to the department; provided, however, that all such

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claims shall be reasonably verified and must be demonstrated to the reasonable satisfaction of the

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department in order to be considered eligible for reimbursement.

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

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parties may be eligible for reimbursement of eligible costs incurred for sites provided that:

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

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

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

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at the time of application on which a release occurred prior to the city, town, or state agency's

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ownership, provided that the government entity purchased the property prior to March 1, 1998; or

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

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

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     (4) The release occurred from a residential heating oil tank.

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

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

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submitted after this two-year (2) deadline will be considered ineligible for reimbursement.

 

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

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

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and special fuels tax is inapplicable including, but not limited to, underground storage tanks used

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

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materials as deemed appropriate by the department may be eligible for reimbursement with the

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following exceptions:

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

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consumption other than residential heating oil tanks shall not be eligible.

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     (2) Underground Other than residential heating oil tanks, underground storage tanks

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exempted from the department's "regulations for underground storage facilities used for petroleum

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products and hazardous materials."

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     46-12.9-7. Rules and regulations.

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     The department is hereby authorized to promulgate, implement, and amend regulations, in

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accordance with the provisions of chapter 35 of title 42, providing for the submission of claims to

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the fund and the timely disbursement of monies from the fund. Such regulations shall include, but

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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 that 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 eligible

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

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filed, subject to funds availability, except in the case where the director finds that funds must be

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expended out of order in order to abate an environmental emergency;

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     (5) A requirement that the department render its decisions to an eligible party upon the

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receipt of a complete claim for reimbursement within ninety (90) days following its receipt of

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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 department; provided, however,

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that no claims shall be considered for costs incurred prior to January 1, 1994, by responsible parties

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who are owners or operators of no more than one location containing underground storage tanks

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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 other

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contracts with the responsible party and/or contractor for the remediation of a release; and

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

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financial responsibility.; and

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     (11) Establishing new regulations specific to residential heating oil tank releases.

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     46-12.9-11. Fundings.

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     (a) There is hereby imposed an environmental protection regulatory fee of one cent ($0.01)

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per gallon payable of motor fuel, to be collected by distributors of motor fuel when the product is

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sold to owners and/or operators of underground storage tanks. Each distributor shall be responsible

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to the tax administrator for the collection of the regulatory fee, and if the distributor is unable to

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recover the fee from the person who ordered the product, the distributor shall nonetheless remit to

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the tax administrator the regulatory fee associated with the delivery. In accordance with the

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regulations to be promulgated hereunder, the fee shall be collected, reported, and paid to the Rhode

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Island division of taxation as a separate, line-item entry, on a quarterly tax report by those persons

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charged with the collection, reporting, and payment of motor fuels taxes. This fee shall be

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administered and collected by the division of taxation. Notwithstanding the provisions of this

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section, the fee shall not be applicable to purchases by the United States government.

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     (b) Of the one-cent-per-gallon ($0.01) 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 pursuant

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to § 31-36-20 and one-half cent ($0.005) shall be paid to the fund. All environmental protection

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regulatory fees paid to the department shall be received by the department, which shall keep such

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money in a distinct, interest-bearing, restricted-receipt account to the credit of, and for the exclusive

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use of, the fund provided that for the period January 1, 2008, through June 30, 2008, all revenues

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generated by the environmental protection regulatory fee, up to a maximum of two million dollars

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($2,000,000), shall be deposited into the general fund. In fiscal year 2009, all revenues generated

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by the environmental protection regulatory fee, up to a maximum equivalent to two million two

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hundred thirty-seven thousand five hundred dollars ($2,237,500), shall be deposited into the

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intermodal surface transportation fund. All fees collected may be invested as provided by law and

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all interest received on such investment shall be credited to the fund.

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

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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 advisory board and the department that the fund has

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reached a balance sufficient to satisfy all pending or future claims, the advisory board department

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

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in this section.

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     SECTION 2. Section 46-12.9-8 of the General Laws in Chapter 46-12.9 entitled "Rhode

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Island Underground Storage Tank Financial Responsibility Act" is hereby repealed.

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     46-12.9-8. Advisory board.

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     (a) There is hereby authorized, created, and established the "underground storage tank

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advisory board," to have such powers as are provided herein.

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     (b) The advisory board shall consist of seven (7) members, as follows: the director of the

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department of environmental management, or his or her designee, who shall be a subordinate within

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the department of environmental management. The governor, with the advice and consent of the

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senate, shall appoint six (6) public members, one of whom shall have expertise and experience in

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financial matters. In making these appointments the governor shall give due consideration to

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recommendations from the American Petroleum Institute, the Independent Oil Marketers

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

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Association, and the Rhode Island Marine Trade Association. The newly appointed members will

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serve for a term of three (3) years commencing on the day they are qualified. Any vacancy which

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may occur on the board shall be filled by the governor, with the advice and consent of the senate,

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for the remainder of the unexpired term in the same manner as the member's predecessor as

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prescribed in this section. The members of the board shall be eligible to succeed themselves.

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Members shall serve until their successors are appointed and qualified. No one shall be eligible for

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appointment unless he or she is a resident of this state. The members of the board shall serve without

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compensation. Those members of the board, as of the effective date of this act [July 15, 2005], who

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were appointed to the board by members of the general assembly, shall cease to be members of the

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board on the effective date of this act, and the governor shall thereupon nominate three (3)

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members, each of whom shall serve the balance of the unexpired term of his or her predecessor.

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Those members of the board, as of the effective date of this act [July 15, 2005], who were appointed

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to the board by the governor, shall continue to serve the balance of their current terms. Thereafter,

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the appointments shall be made by the governor as prescribed in this section.

 

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     (c) The advisory board shall meet at the call of the chair. All meetings shall be held

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consistent with chapter 46 of title 42.

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     (d) The advisory board and its corporate existence shall continue until terminated by law.

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Upon termination of the existence of the advisory board, all its rights and properties shall pass to

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and be vested in the state.

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

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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 advisory board, and to define 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 advisory board. Such bylaws may contain provisions indemnifying any person

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

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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 after the end of each fiscal year to the

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governor, the speaker of the house of representatives, the president of the senate, and the secretary

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of state, of its activities during that fiscal year. The report shall provide information provided by

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the department, including: an operating statement summarizing meetings held, including meeting

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minutes, subjects addressed, and decisions rendered; a summary of the advisory board's actions,

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fees levied, collected, or received, as prescribed in §§ 46-12.9-7 and 46-12.9-11, claims submitted,

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verified, approved, modified, and denied, as prescribed in § 46-12.9-7, and reconsideration hearings

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held; a synopsis of any law suits or other legal matters related to the fund; and a summary of

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performance during the previous fiscal year, including accomplishments, shortcomings, and

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

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

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subdivision (e)(4). The report shall be posted electronically as prescribed in § 42-20-8.2. The

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advisory board may make recommendations or suggestions on the claims process and/or the

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condition and management of the fund, and the department shall respond, in writing, to any of these

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suggestions or recommendations; and

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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 chapter 12.9 of title 46, chapter 46 of title 42, chapter 14 of title 36 and

 

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chapter 2 of title 38; and the board's rules and regulations. The director of the department of

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administration shall, within ninety (90) days of the effective date of this act [July 15, 2005], prepare

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and disseminate training materials relating to the provisions of chapter 14 of title 36, chapter 2 of

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title 38, and chapter 46 of title 42.

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

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members prescribed in subsection (b), the board shall elect, from among its members, a chair.

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

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may elect, from among its members, such other officers as it deems necessary.

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

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of the members present shall be necessary and shall suffice for any action taken by the board. No

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vacancy in the membership of the board shall impair the right of a quorum to exercise all of the

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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 § 36-1-7 and

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

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be unlawful.

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     SECTION 3. This act shall take effect upon passage.

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LC005254

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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

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     This act would eliminate the Rhode Island Underground Storage Tank financial advisory

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board and include the cleanup of residential heating oil tanks under the eligibility for

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reimbursement from the cleanup fund.

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     This act would take effect upon passage.

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LC005254

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