GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H	1 

HOUSE BILL 1061

Short Title:  Underground Storage Tanks Amends '93.	(Public)
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Sponsors: Representative DeVane.
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Referred to:  Environment.
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April 19, 1993

A BILL TO BE ENTITLED
AN ACT TO AMEND THE LEAKING PETROLEUM UNDERGROUND STORAGE TANK CLEANUP ACT OF 1988.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 143-215.94B(b) reads as rewritten:
"(b)	The Commercial Fund shall be used for the payment of the following costs up to an aggregate maximum of one million dollars ($1,000,000) per occurrence resulting from a discharge or release of a petroleum product from a commercial underground storage tank that at the time the discharge or release is discovered or reported is beneath the surface of the ground or has been removed within the preceding 120 days:
(1)	For discharges or releases discovered or reported between 30 June 1988 and 31 December 1991 inclusive, the cleanup of environmental damage as required by G.S. 143-215.94E(a) in excess of fifty thousand dollars ($50,000) per occurrence.
(2)	For discharges or releases discovered on or after 1 January 1992 and reported between 1 January 1992 and 31 December 1993 inclusive, the cleanup of environmental damage as required by G.S. 143-215.94E(a) in excess of twenty thousand dollars ($20,000) per occurrence.
(2a)	For discharges or releases discovered and reported on or after 1 January 1994 and prior to 1 January 1995, the cleanup of environmental damage as required by G.S. 143-215.94E(a) in excess of twenty thousand dollars ($20,000) if, prior to 1 January 1994, the owner or operator notifies the Department of its intent to either permanently close the tank in accordance with applicable regulations or upgrade the tank to meet the requirements that existing underground storage tanks must meet by 22 December 1998, and the closure or upgrade is commenced prior to 1 July 1994 and completed prior to 1 January 1995.
(3)	For discharges or releases discovered and reported on or after 1 January 1994, the cleanup of environmental damage as required by G.S. 143-215.94E(a) in excess of twenty thousand dollars ($20,000) if, prior to the discharge or release, the commercial underground storage tank from which the discharge or release occurred met the performance standards applicable to tanks installed after 22 December 1988 or met the requirements that existing underground storage tanks must meet by 22 December 1998.
(4)	For discharges or releases discovered and reported on or after 1 January 1994 from a commercial underground storage tank that does not qualify under subdivision (2a) of this subsection or does not meet the standards in subdivision (3) of this subsection, sixty percent (60%) of the costs per occurrence of the cleanup of environmental damage as required by G.S. 143-215.94E(a) that exceeds twenty thousand dollars ($20,000) but is not more than one hundred fifty-seven thousand five hundred dollars ($157,500) and one hundred percent (100%) of the costs above this amount, up to the limits established in this section.
(5)	Compensation to third parties for bodily injury and property damage in excess of one hundred thousand dollars ($100,000) per occurrence.
(6)	Reimbursing the State for damages or other costs incurred as a result of a loan from the Loan Fund. The per occurrence limit does not apply to reimbursements to the State under this subdivision."
Sec. 2.  G.S. 143-215.94C(b) reads as rewritten:
"(b)	The annual operating fee shall be determined on a calendar year basis.  For petroleum commercial underground storage tanks in use on 1 January and remaining in use on or after 1 December of that year, the annual operating fee due for that year shall be as specified in subsection (a) of this section.  For a petroleum commercial underground storage tank that is first placed in use in any year, the annual operating fee due for that year shall be determined by multiplying one-twelfth (1/12) of the amount specified in subsection (a) of this section by the number of months remaining in the calendar year.  For a petroleum commercial underground storage tank that is permanently removed from use in any year, the annual operating fee due for that year shall be determined by multiplying one-twelfth (1/12) of the amount specified in subsection (a) of this section by the number of months in the calendar year preceding the permanent removal from use.  In calculating the pro rata annual operating fee for a tank that is first placed in use or permanently removed during a calendar year under the preceding two sentences, a partial month shall count as a month, except that where a tank is permanently removed and replaced by another tank, the total of the annual operating fee for the tank that is removed and the replacement tank shall not exceed the annual operating fee for the replacement tank.  The annual operating fee shall be due and payable on the first day of the month in accordance with a staggered schedule established by the Department.  The Department shall implement a staggered schedule to the end that the total amount of fees to be collected by the Department is approximately the same each quarter.  A person who owns or operates more than one petroleum commercial underground storage tank may request that the fee for all tanks be due at the same time.  A person who owns or operates 12 or more commercial petroleum storage tanks may request that the total of all fees be paid in four equal payments to be due on the first day of each calendar quarter."
Sec. 3.  G.S. 143-215.94E is amended by adding two new subsections to read:
"( a1)	Subsection (a) of this section does not apply to a person who:
(1)	Holds indicia of ownership in an underground storage tank solely to protect a security interest and is not an operator or otherwise an owner of the underground tank;
(2)	Is not otherwise engaged in the production, refining, or marketing of petroleum; and
(3)	After obtaining title by foreclosure, empties the underground storage tank and either temporarily or permanently closes the underground storage tank in accordance with applicable rules within 45 days of the date that a final report of the sale of the property by foreclosure is required to be filed.
(i)	An owner or operator who notifies the Department of an intention to close or upgrade a commercial underground storage tank as provided in G.S. 143-215.94B(b)(2a) shall commence the closure or upgrade prior to 1 July 1994 and shall complete the closure or upgrade prior to 1 January 1995.  An owner who notifies the Department of an intention to close or upgrade a commercial underground storage tank and who fails to commence and complete the closure as specified in this subsection is subject to a civil penalty as provided in G.S. 143-215.94K.  The provisions of G.S. 143-215.94B(b)(2a) do not apply if an owner or operator who notifies the Department of an intention to close or upgrade a commercial underground storage tank fails to commence or complete the closure or upgrade within the dates specified in this subsection."
Sec. 4.  G.S. 143-215.94E(c) reads as rewritten:
"(c)	In the case of a discharge or release from a noncommercial underground storage tank or a commercial underground storage tank eligible for the Noncommercial Fund in accordance with G.S. 143-215.94D(b), the owner or operator may elect to have the Noncommercial Fund pay or reimburse the owner or operator for the costs described in G.S. 143-215.94D(b1) up to a maximum of one million dollars ($1,000,000) per discharge or release."
Sec. 5.  G.S. 143-215.94G reads as rewritten:
"§ 143-215.94G.  (Expires December 31, 1998) Authority of the Department to engage in cleanups; actions for fund reimbursement.
(a)	The Department may use staff, equipment, or materials under its control or provided by other cooperating federal, State, or local agencies and may contract with any agent or contractor it deems appropriate to develop and implement a cleanup plan, to provide interim alternative sources of drinking water to third parties, and to pay the initial costs for providing permanent alternative sources of drinking water to third parties, and shall pay the costs resulting from commercial underground storage tanks from the Commercial Fund and shall pay the costs resulting from noncommercial underground storage tanks from the Noncommercial Fund, whenever there is a discharge or release of petroleum from any of the following:
(1)	A noncommercial underground storage tank.
(2)	An underground storage tank whose owner or operator cannot be identified or located.
(3)	An underground storage tank whose owner or operator fails to proceed as required by G.S. 143-215.94E(a).
(4)	A commercial underground storage tank taken out of operation prior to 1 January 1974 if, when the discharge or release is discovered, neither the owner nor operator owns or leases the land on which the underground storage tank is located.
(a1)	Every State agency shall provide to the Department to the maximum extent feasible such staff, equipment, and materials as may be available and useful to the development and implementation of a cleanup program.
(a2)	The cost of any action authorized under subsection (a) of this section shall be paid, to the extent funds are available, from the following sources in the order listed:
(1)	Any funds to which the State is entitled under any federal program providing for the cleanup of petroleum discharges or releases from underground storage tanks, including, but not limited to, the Leaking Underground Storage Tank Trust Fund established pursuant to 26 U.S.C. § 4081 and 42 U.S.C. § 6991b(h).
(2)	The Commercial Fund or the Noncommercial Fund.
(b)	Whenever the discharge or release of a petroleum product is from a commercial underground storage tank, the Department may supervise the cleanup of environmental damage required by G.S. 143-215.94E(a).  If the owner or operator elects to have the Commercial Fund reimburse or pay for any costs allowed under G.S. 143-215.94B(b), the Department shall require the owner or operator to submit documentation of all expenditures claimed for the purposes of establishing that the owner or operator has spent the amounts required to be paid by the owner or operator pursuant to and in accordance with G.S. 143-215.94E(b).  The Department shall allow credit for all expenditures that the Department determines to be reasonable and necessary.  The Department may not pay for any costs for which the Commercial Fund was established until the owner or operator has paid the amounts specified in G.S. 143-215.94E(b).
(c)	The Secretary shall keep a record of all expenses incurred for the services of State personnel and for the use of the State's equipment and material.
(d)	The Secretary shall seek reimbursement through any legal means available, for:
(1)	Any costs not authorized to be paid from either the Commercial or the Noncommercial Fund;
(2)	The amounts provided for in G.S. 143-215.94B(b) required to be paid for by the owner or operator pursuant to G.S. 143-215.94E(b) where the owner or operator of a commercial underground storage tank is later identified or located;
(3)	The amounts provided for in G.S. 143-215.94B(b) required to be paid for by the owner or operator pursuant to G.S. 143-215.94E(b) where the owner or operator of a commercial underground storage tank failed to proceed as required by G.S. 143-215.94E(a);
(3a)	The amounts provided for by G.S. 143-215.94B(b)(5) required to be paid by the owner or operator to third parties for the cost of providing interim alternative sources of drinking water to third parties and the initial cost of providing permanent alternative sources of drinking water to third parties;
(4)	Any funds due under G.S. 143-215.94E(g); and
(5)	Any funds to which the State is entitled under any federal program providing for the cleanup of petroleum discharges or releases from underground storage tanks.
(e)	In the event that a civil action is commenced to secure reimbursement pursuant to subdivisions (1) through (4) of subsection (d) of this section, the Secretary may recover, in addition to any amount due, the costs of the action, including but not limited to reasonable attorney's fees and investigation expenses.  Any monies received or recovered as reimbursement shall be paid into the appropriate fund or other source from which the expenditures were made.
(f)	In the event that a recovery equal to or in excess of the amounts required to be paid for by the owner or operator pursuant to G.S. 143-215.94E(b) is recovered pursuant to subdivisions (2) and (3) of subsection (d) of this section for the costs described in G.S. 143-215.94B(b), the Department shall transfer funds from the Commercial Fund that would have been paid from the Commercial Fund pursuant to G.S. 143-215.94B(b) if the owner or operator had proceeded with the cleanup, but which were paid from the Noncommercial Fund, into the Noncommercial Fund."
Sec. 6.  G.S. 143-215.94P reads as rewritten:
"§ 143-215.94P.  Groundwater Protection Loan Fund.
(a)	There is established under the control and direction of the Department the Groundwater Protection Loan Fund.  This Loan Fund shall be a nonreverting revolving fund consisting of any monies appropriated to it by the General Assembly or available to it from grants, and other monies paid to it or recovered on behalf of the Loan Fund.  The Loan Fund shall be credited with interest on the Loan Fund by the State Treasurer pursuant to G.S. 147-69.2 and G.S. 147-69.3.
(b)	The Loan Fund shall be used to provide loans to the owners of commercial petroleum underground storage tanks who are creditworthy but may be unable to secure conventional loans to upgrade or replace commercial underground storage tanks in use on 1 July 1991 so as to meet the performance standards applicable to tanks installed after 22 December 1988 or the requirements that existing underground storage tanks must meet by 22 December 1998.  All applications for loans under this section must be received by the Department prior to 1 January 1995.
(c)	The Department shall adopt rules for use in managing the Loan Fund.  Rules for managing the Loan Fund shall be based on generally accepted standards prevailing among commercial lending institutions with such modifications as may be necessary to achieve the purpose of this section to make loans available to creditworthy applicants.  The Department shall administer the loan program through existing commercial lending institutions.  In the event that the Department is unable to arrange for the administration of the loan program through existing commercial institutions in all or any part of the State, the Department may administer the loan program through the Office of State Budget and Management.  Each commercial institution or agency that administers any part of the loan program shall collect all charges for securing and administering each loan, including but not limited to application fees, recording costs, collection costs, and attorneys' fees from the borrower.  Receipt of a loan from the Loan Fund is not a right, duty, or privilege; therefore, Article 3 of Chapter 150B of the General Statutes does not apply to the grant or denial of a loan from the Loan Fund.
(d)	Funds received in repayment of loans made from the Loan Fund shall be deposited into the Loan Fund until the proceeds of all approved loans are disbursed to the borrowers.  Thereafter, funds received in repayment of loans made from the Loan Fund and any other funds remaining in the Loan Fund shall be deposited in the Commercial Fund.
(e)	In the event of a default on a loan from the Loan Fund or a violation of a loan agreement, the Secretary may request the Attorney General to bring a civil action for collection of the amount owed or other appropriate relief.  An action shall be filed in the superior court of the county where the loan recipient resides, where the loan recipient does business, or where the tanks replaced or upgraded by the loan are located.  In an action, the Attorney General may recover all costs of litigation, including attorneys' fees.
(f)	If the State incurs liability in extending credit from the Loan Fund and, as a result of the liability, the State is ordered to pay or, as part of a settlement agreement, agrees to pay damages or other costs, the State shall seek reimbursement for the amount of the damages or other costs from the following sources in the order listed:
(1)	Any funds to which the State is entitled under any federal program providing for the cleanup of petroleum discharges or releases from underground storage tanks, including but not limited to the Leaking Underground Storage Tank Trust Fund established pursuant to 26 U.S.C. § 4081 and 42 U.S.C. § 6991b(h).
(2)	The Noncommercial Fund.
(3)	The Commercial Fund."
Sec. 7.  The catch line to G.S. 143-215.94L reads as rewritten:
"§ 143-215.94L.  (Expires December 31, 1998) Adoption of rules; administrative procedure; miscellaneous provisions; short title; allocation of funds."
Sec. 8.  Section 17 of Chapter 652 of the 1989 Session Laws is codified as G.S. 143-215.94L(e) and reads as rewritten:
" (e)	All sums collected on kerosene and motor fuel pursuant to G.S. 119-18 that are not allotted by the Office of State Budget and Management to administer and enforce the provisions of Chapter 119 of the General Statutes shall be credited to the Commercial Fund and the Noncommercial Fund as certified on a monthly basis as follows:  all such funds shall be credited to the Noncommercial Fund unless the balance in the Noncommercial Fund exceeds five million dollars ($5,000,000), and in that event, one-half (1/2) shall be credited to the Noncommercial Fund and one-half (1/2) shall be credited to the Commercial Fund. "
Sec. 9.  Section 1 through Section 6 and Section 9 of this act are effective upon ratification.  Sections 7 and 8 of this act become effective 1 July 1993.