It is enacted by the General Assembly as follows:

SECTION 1. Sections 46-12.9-2, 46-12.9-3, 46-12.9-5, 46-12.9-6, 46-12.9-7 and 46-12.9-8 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:

46-12.9-2. Legislative findings. -- The general assembly finds: (1) That a state administered underground storage tank (UST) clean-up fund is needed to provide an effective mechanism for USTs owners to comply with financial responsibility requirements and to insure that the environmental and public health impacts of UST leaks are addressed in an effective and timely manner.

(2) Certain tank owners must be able to demonstrate one million dollars ($1,000,000) of liability coverage to satisfy the U.S. environmental protection agency (EPA) (40 CFR Part 280.90 et seq. as published in the Federal Register dated October 26, 1988 and by Final Rule dated February 18, 1993). Specifically the EPA requirement is that all certain tank owners must demonstrate financial responsibility of up to one million dollars ($1,000,000) per incident and up to two million dollars ($2,000,000) in the aggregate for damages. Failure by the state to create a state-sponsored fund will result in enforcement action by the EPA which can include both financial penalties against tank owners and closure of tanks, if the owner fails to demonstrate financial responsibility.

(3) The Rhode Island economic development corporation recently concluded that failure by the state of Rhode Island to enact a state fund will adversely impact the state's economy by eighteen million dollars ($18,000,000) annually.

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) (4) "Fund" means the Rhode Island underground storage tank financial responsibility fund established herein.

(4) (5) "Fund administrator" means the clean water finance agency established pursuant to the provisions of chapter 12.2 of title 46 or any other agency of state government designated by the governor.

(5) (6) "Operator" means any person in control of, or having the responsibility for, the daily operation of an underground storage tank system.

(6) (7) "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) (8) "Petroleum" means crude oil, crude oil fractions, and refined petroleum fractions, including gasoline, kerosene, heating oils, used/waste oil and diesel fuels.

(8) (9) "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) (10) "Responsible party" means the person or persons liable for release of petroleum or the remediation of a release.

(10) (11) "Review board" means the Rhode Island underground storage tank financial responsibility review board established pursuant to the provisions of section 47-12.9-8 46-12.9-8.

(11) (12) "Site" means (a) 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.

(b) For the purposes of this chapter, "site" shall also include a petroleum leak or spill from any source on any location owned or occupied by any city or town, the state or any agency of the state "government site" shall mean 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) (13) "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) (14) "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. -- The purpose of the fund shall be to facilitate the clean-up of releases from leaking underground storage tanks, underground storage tank systems, and including those located on sites owned or occupied by a city, town, the state or any agency of the state or government sites in order to protect the environment including drinking water supplies and public health. The fund shall provide reimbursement to responsible parties for the eligible costs, expenses and other obligations 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 general treasurer or his or her designee for the following purposes, and only after the approval of the review board:

(1) Administrative expenses, personnel, expenses and miscellaneous costs directly related to the fund management incurred by the fund administrator and approved by the review board in carrying out fund activities; provided, however, that no more than five hundred and fifty thousand dollars ($550,000) shall be dispensed from the fund for administrative purposes during fiscal year 1998. For fiscal year 1999, no more than three hundred and fifty thousand dollars ($350,000) shall be dispensed from the fund for administrative purposes;

(2) 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, expenses and other obligations as defined in regulations promulgated hereunder and, as further defined in subsection (3) section 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, expenses and other obligations excluding legal costs and expenses; and ;

(3) Costs, expenses and other obligations as shall be incurred by the responsible party for site investigation, site remediation or other corrective action activities ordered or directed by the department or voluntarily done by the responsible party; provided, however, that a responsible party must bear the financial responsibility set forth in subsection (2) of this section; and

(4) 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 (2) 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

(5) Costs Eligible costs, expenses or obligations 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 including expenses of not more than twenty thousand dollars ($20,000).

(6) 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.

(7) Notwithstanding the provisions of this section, no city or town, the state nor any state agency shall be responsible for the costs set forth in this section in order to be eligible for reimbursement from the fund for costs, expenses and reimbursement to facilitate the clean-up of a site. The provisions of this subsection shall apply to the owner of or other successor in interest of a location which was previously owned or occupied by a city or town, the state, or a state agency.

46-12.9-6. Eligibility. -- (a) In order to be eligible for reimbursement from the fund for eligible costs, expenses and other obligations as set forth in section 46-12.9-5, a responsible party must be subject to financial responsibility as required by the EPA (40 CFR Part 280 Subpart H) and:

(1) Have complied with all state technical requirements for underground storage tanks and underground storage tank systems as promulgated by the 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, expense or obligation, in excess of the deductible amount specified in section 46-12.9-5(b) whether for clean-up or related matters or for claims of third parties as set forth in section 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; provided, however, that all such claims shall be reasonably verified and must be demonstrated to the reasonable satisfaction of the review board in order to be considered eligible for reimbursement.

(b) As set forth in section 46-12.9-5, cities and towns, the state or any state agency and the owners or other successors in interest of a site location shall be eligible for reimbursement from the fund notwithstanding the fact that the city or town, the state or state agency or the owner or other successor in interest of a site previously owned or occupied by a city or town, the state or a state agency has not complied with the financial requirements of section 46-12.9-5.

(c) The fact that the responsible party, as defined in section 46-12.9-3(9), cannot be determined shall not prevent eligibility for reimbursement from the fund. The review board shall, if it deems it necessary, establish criteria for reimbursement from the fund if the responsible party cannot be determined.

46-12.9-7. Rules and regulations. -- The review board, after consultation with the general treasurer and the department, is hereby authorized to promulgate, implement and amend regulations 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 means of making periodic and partial reimbursement to eligible parties to enable such parties to meet their interim costs, expenses, and obligations;

(5) A method of providing periodic reimbursement for eligible costs, expenses and obligations incurred by an eligible party after the effective date of this chapter;

(6) A requirement that the review board render its decisions to an eligible party upon the receipt of a complete claim for reimbursement within sixty (60) ninety (90) days following its receipt of completed claim;

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

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

(9) Empowering the review board to levy an annual tank registration fee of five hundred dollars ($500) per underground storage tank not to exceed two thousand five hundred dollars ($2,500) per site on underground storage tanks which are subject to financial responsibility regulation and which are used to store 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, aviation fuel or other materials as deemed appropriate by the review board; provided however that USTs containing heating oil used solely for onsite consumption shall be exempt from fees assessed under this statute; and

(10) The eligibility of claims shall be determined by the board, 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.

46-12.9-8. Review board. -- (a) There is hereby established a review board to oversee administration and implementation of the fund, to review submissions and claims received from eligible parties and to proceed to approve, modify, or deny disbursements to eligible parties and to have such other powers as are provided herein.

(b) The review board shall consist of thirteen (13) members, as follows: the director of the department or his or her designee; the director of the department of business regulation or his or her designee; the auditor general of the state or his or her designee; a representative of the Rhode Island petroleum association to be appointed by the speaker of the house; a representative of the independent oil marketers association of New England to be appointed by the senate majority leader; a representative of the oil heat institute appointed by the governor; a member of the house of representatives appointed by the speaker of the house; a member of the senate appointed by the senate majority leader; a member of a state wide environmental organization to be appointed by the governor; a representative of the independent petroleum dealers association of Rhode Island appointed by the governor; a member of the Rhode Island marine trade association, who is a marina operator and/or owner, to be appointed by the governor; a member of the general public, to be appointed by the governor; a member of the house of representatives to be appointed by the house minority leader.

(c) The review board shall file an annual report of all receipts and disbursements with the governor, general assembly, and secretary of state. When claims are pending, the review board shall meet no less than six (6) four (4) times per year.

SECTION 2. This act shall take effect upon passage.