A BILL TO BE ENTITLED
AN ACT to make various changes to the laws governing the state's underground storage tank program and petroleum discharges.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 143‑215.3(a) reads as rewritten:
"(a)	Additional Powers. – In addition to the specific powers prescribed elsewhere in this Article, and for the purpose of carrying out its duties, the Commission shall have the power:
…
(15)	To adopt rules for the prevention of pollution from underground tanks containing petroleum, petroleum products, or hazardous substances. Rules adopted under this section may not incorporate standards and restrictions which exceed or are more comprehensive than comparable federal regulations.
(16)	To adopt rules limiting the manufacture, storage, sale, distribution or use of cleaning agents containing phosphorus pursuant to G.S. 143‑214.4(e), and to adopt rules limiting the manufacture, storage, sale, distribution or use of cleaning agents containing nitrilotriacetic acid.
(17)	To adopt rules to implement Part 2A of Article 21A of Chapter 143.
(18)	To adopt rules pertaining to the discharge or release of petroleum, from any source, which provide for risk‑based assessment and cleanup."
SECTION 2.  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:
…
(8)	The costs of a site investigation required by the Department for the purpose of determining whether a release from a tank system has occurred, whether or not the investigation confirms that a release has occurred."
SECTION 3.  G.S. 143‑215.94B(b1) reads as rewritten:  
"(b1)	In the event that two or more discharges or releases at any one facility, the first of which was discovered or reported on or after 30 June 1988, result in more than one plume of soil, surface water, or groundwater contamination, the Commercial Fund shall be used for the payment of the costs of the cleanup of environmental damage as required by G.S. 143‑215.94E(a) in excess of the multiple discharge amount up to the applicable aggregate maximum specified in subsections (b) and (b2) of this section. The multiple discharge amount shall be calculated as follows:
(1)	Each discharge or release shall be considered separately as if it were the only discharge or release, and the cost for which the owner or operator is responsible under subdivisions (1), (2), (2a), or (3) of subsection (b) of this section, whichever are applicable, shall be determined for each discharge or release. For each discharge or release for which subdivision (4) of subsection (b) of this section is applicable, the cost for which the owner or operator is responsible, for the purpose of this subsection, shall be seventy‑five thousand dollars ($75,000). For purposes of this subsection, two or more discharges or releases that result in a single plume of soil, surface water, or groundwater contamination shall be considered as a single discharge or release.(2)	The multiple discharge amount shall be the lesser of:
a.	The sum of all the costs determined as set out in subdivision (1) of this subsection; or
b.	The product of the highest of the costs determined as set out in subdivision (1) of this subsection multiplied by one and one‑half (1½).
(3)	If in the process of investigating a discharge or release from an underground storage tank system an owner or operator discovers a separate discharge or release for which the owner or operator is not responsible, the responsible party cannot be identified, and the releases are commingled, the owner or operator may elect to clean up both releases, in which case the amount the owner or operator is responsible for shall be the lesser of the applicable costs under subdivision (1), (2), (2a), (3), or (4) of subsection (b) of this section, whichever are applicable."
SECTION 4.(a)	G.S. 143‑215.94B is amended by adding a new subsection to read:
"(b5)	In the event a discharge or release of petroleum from an underground storage tank results in contamination in soil or groundwater that becomes commingled with contamination that is the result of a discharge or release of petroleum from another source, the Commercial Fund may be used to reimburse an owner, operator, or landowner that is otherwise eligible for reimbursement and proceeds with cleanup pursuant to this Part for any costs in accordance with subsection (b1) of this section."
SECTION 4.(b)  G.S. 143‑215.94B(d) reads as rewritten:
"(d)	The Commercial Fund shall not be used for:
(1)	Costs incurred as a result of a discharge or release from an aboveground tank, aboveground pipe or fitting not connected to an underground storage tank, or vehicle, unless the discharge or release becomes commingled with contamination from an underground storage tank.
…."
SECTION 4.(c)  G.S. 143‑215.94D(d) reads as rewritten:
"(d)	The Noncommercial Fund shall not be used for:
(1)	Costs incurred as a result of a discharge or release from an aboveground tank, aboveground pipe or fitting not connected to an underground storage tank, or  vehicle, unless the discharge or release becomes commingled with contamination from an underground storage tank.
…."
SECTION 5.  G.S. 143‑215.94B is amended by adding a new subsection to read:
"(i)	During each fiscal year, the Department shall use up to one million dollars ($1,000,000) of the funds in the Commercial Fund to fund necessary assessment and cleanup to be conducted by the Department of discharges or releases for which a responsible party has been identified but for which the responsible party can demonstrate that undertaking the costs of assessment and cleanup will impose a severe financial hardship. The Commission shall adopt rules to define severe financial hardship; establish criteria for assistance due to severe financial hardship pursuant to this section; and establish a process for evaluation and determinations of eligibility with respect to applications for assistance due to severe financial hardship. The rules shall provide that the determinations of eligibility shall be made by the Petroleum Underground Storage Tank Funds Council established under G.S. 143‑215.94O."
SECTION 6.  G.S. 143‑215.94C reads as rewritten:
"§ 143‑215.94C.  Commercial leaking petroleum underground storage tank cleanup fees.
(a)	For purposes of this subsection, each compartment of a commercial underground storage tank that is designed to independently contain a petroleum product is a separate petroleum commercial underground storage tank. The owner or operator of a commercial petroleum underground storage tank shall pay to the Secretary for deposit into the Commercial Fund an annual operating fee of four‑hundred twenty dollars ($420.00) for each petroleum commercial underground storage tank.
(a1)	Payment of a fee shall not be required for a compartment of a commercial underground storage tank that has not contained a petroleum product at any point during the applicable calendar year. The owner or operator of a commercial petroleum underground storage tank that does not pay an annual operating fee for a compartment pursuant to this subsection shall complete and submit an attestation under penalty of perjury that the compartment for which a fee is not paid did not contain a petroleum product at any point during the applicable calendar year. A compartment for which an annual operating fee is not paid is ineligible for reimbursement of any costs associated with a discharge or release from the compartment from the Commercial Leaking Petroleum Underground Storage Tank Fund. 
(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 service 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 service 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 in equal installments on a quarterly basis on the first day of the month of each quarter in accordance with a staggered schedule established by the Department in order 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. The fee for all commercial underground storage tanks located at the same facility shall 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, provided that the fee for all commercial underground storage tanks located at the same facility shall be due at the same time.
…."
SECTION 7.  G.S. 143‑215.94T reads as rewritten:
"§ 143‑215.94T.  Adoption and implementation of regulatory program.
…
(c)	Rules adopted pursuant to subdivision (13) of subsection (a) of this section shall require secondary containment for all components of underground storage tank systems, including, but not limited to, tanks, piping, fittings, pump heads, and dispensers. Secondary containment requirements shall include standards for double wall tanks, piping, and fittings and for sump containment for pump heads and dispensers. The rules shall provide for monitoring of double wall interstices and sump containments. The rules shall apply to any underground storage tank system that is installed on or after the date on which the rules become effective and to the replacement of any component of an underground storage tank system on or after that date. This section shall not be construed to limit the right of an owner or operator to repair any existing component of an underground storage tank system. If an existing underground storage tank is replaced, the secondary containment and interstitial monitoring requirements shall apply only to the replaced underground tank. Likewise, if existing piping is replaced, the secondary containment and interstitial monitoring requirements shall apply only to the replaced piping.
(d)	The Department shall allow non‑tank unprotected metallic components that are visible or can be accessed for visual inspection, including flex connectors and other metal fittings and connectors at the ends of piping runs, to have corrosion protection added as an alternative to replacement of these components if the component does not have visible corrosion and passes a tightness test."
SECTION 8.(a) Notwithstanding 15A NCAC 02N .0304(a)(5) (Implementation Schedule for Performance Standards for New UST Systems and Upgrading Requirements for Existing UST Systems Located in Areas Defined in Rule .0301(d)), all UST systems installed after January 1, 1991, shall not be required to provide secondary containment until January 1, 2020.
SECTION 8.(b) Notwithstanding 15A NCAC 02N .0304(a)(5) (Implementation Schedule for Performance Standards for New UST Systems and Upgrading Requirements for Existing UST Systems Located in Areas Defined in Rule .0301(d)), the Commission shall establish a process for the grant of variances from the setbacks required for UST systems from certain public water supply wells, particularly those that serve only a single facility which are not community water systems, if the Commission finds facts to demonstrate that such variance will not endanger human health and welfare or groundwater.
SECTION 8.(c) No later than January 1, 2012, the Environmental Management Commission shall adopt rules consistent with the provisions of Section 8(a) and Section 8(b) of this act.  Notwithstanding G.S. 150B‑19(4), the rules adopted by the Commission pursuant to this section shall be substantively identical to the provisions of Section 8(a) and Section 8(b) of this act.
SECTION 9.  G.S. 143‑215.94V reads as rewritten:
"§ 143‑215.94V.  Standards for petroleum underground storage tank cleanup.
(a)	Legislative findings and intent.
(1)	The General Assembly finds that:
a.	The goals of the underground storage tank program are to protect human health and the environment. Maintaining the solvency of the Commercial Fund and the Noncommercial Fund is essential to these goals.
b.	The sites at which discharges or releases from underground storage tanks occur vary greatly in terms of complexity, soil types, hydrogeology, other physical and chemical characteristics, current and potential future uses of groundwater, and the degree of risk that each site may pose to human health and the environment.
c.	Risk‑based corrective action is a process that recognizes this diversity and utilizes an approach where assessment and remediation activities are specifically tailored to the conditions and risks of a specific site.
d.	Risk‑based corrective action gives the State flexibility in requiring different levels of cleanup based on scientific analysis of different site characteristics, and allowing no action or no further action at sites that pose little risk to human health or the environment.
e.	A risk‑based approach to the cleanup of environmental damage can adequately protect human health and the environment while preventing excessive or unproductive cleanup efforts, thereby assuring that limited resources are directed toward those sites that pose the greatest risk to human health and the environment.
(2)	The General Assembly intends:
a.	To direct the Commission to adopt rules that will provide for risk‑based assessment and cleanup of discharges and releases of petroleum. These rules are intended to combine groundwater standards that protect current and potential future uses of groundwater with risk‑based analysis to determine the appropriate cleanup levels and actions.
b.	That these rules apply to all discharges or releases that are reported on or after the date the rules become effective in order to ascertain whether cleanup is necessary, and if so, the appropriate level of cleanup.
c.	That these rules may be applied to any discharge or release that has been reported at the time the rules become effective at the discretion of the Commission.
d.	That these rules and decisions of the Commission and the Department in implementing these rules facilitate the completion of more cleanups in a shorter period of time.
e.	That neither the Commercial Fund nor the Noncommercial Fund be used to clean up sites where the Commission has determined that a discharge or release poses a degree of risk to human health or the environment that is no greater than the acceptable level of risk established by the Commission.
f.	Repealed by Session Laws 1998‑161, s. 11(c), effective retroactively to January 1, 1998.
g.	That the Commercial Fund and the Noncommercial Fund be used to perform the most cost‑effective cleanup that addresses imminent threats to human health and the environment.
(b)	The Commission shall adopt rules to establish a risk‑based approach for the assessment, prioritization, and cleanup of discharges and releases of petroleum. The rules shall address, at a minimum, the circumstances where site‑specific information should be considered, criteria for determining acceptable cleanup levels, and the acceptable level or range of levels of risk to human health and the environment. Rules that use the distance between a source area of a confirmed discharge or release to a water supply well or a private drinking water well, as those terms are defined under G.S. 87‑85, shall include a determination whether a nearby well is likely to be affected by the discharge or release as a factor in determining levels of risk.
(c)	The Commission may require an owner or operator or a landowner eligible for payment or reimbursement under subsections (b), (b1), (c), and (c1) of G.S. 143‑215.94E to provide information necessary to determine the degree of risk to human health and the environment that is posed by a discharge or release from a petroleum underground storage and to identify the most cost‑effective cleanup that addresses imminent threats to human health and the environment.
(d)	If the Commission concludes that a discharge or release poses a degree of risk to human health or the environment that is no greater than the acceptable level of risk established by the Commission, the Commission shall notify an owner, operator, or landowner who provides the information required by subsection (c) of this section that no cleanup, further cleanup, or further action will be required unless the Commission later determines that the discharge or release poses an unacceptable level of risk or a potentially unacceptable level of risk to human health or the environment. If the Commission concludes that a discharge or release poses a degree of risk to human health or the environment that requires further cleanup, the Commission shall notify the owner, operator, or landowner who provides the information required by subsection (c) of this section of the cleanup method approved by the Commission as the most cost‑effective cleanup method for the site. This section shall not be construed to prohibit an owner, operator, or landowner from selecting a cleanup method other than the cost‑effective cleanup method approved by the Commission so long as the Commission determines that the alternative cleanup method will address imminent threats to human health and the environment.
(e)	If the Commission concludes under subsection (d) of this section that no cleanup, no further cleanup, or no further action will be required, the Department shall not pay or reimburse any costs otherwise payable or reimbursable under this Article from either the Commercial or Noncommercial Fund, other than reasonable and necessary to conduct the risk assessment required by this section, unless:
(1)	Cleanup is ordered or damages are awarded in a finally adjudicated judgment in an action against the owner or landowner.
(2)	Cleanup is required or damages are agreed to in a consent judgment approved by the Department prior to its entry by the court.
(3)	Cleanup is required or damages are agreed to in a settlement agreement approved by the Department prior to its execution by the parties.
(4)	The payment or reimbursement is for costs that were incurred prior to or as a result of notification of a determination by the Commission that no cleanup, no further cleanup, or no action is required.
(5)	The payment or reimbursement is for costs that were incurred as a result of a later determination by the Commission that the discharge or release poses a threat or potential threat to human health or the environment as provided in subsection (d) of this section.
(e1)	If the Commission concludes under subsection (d) of this section that further cleanup is required and notifies the owner, operator, or landowner of the cleanup method approved by the Commission as the most cost‑effective cleanup method for the site, the Department shall not pay or reimburse any costs otherwise payable or reimbursable under this Article from either the Commercial Fund or Noncommercial Fund, other than those costs that are reasonable and necessary to conduct the risk assessment and to implement the cost‑effective cleanup method approved by the Commission. If the owner, operator, or landowner selects a cleanup method other than the one identified by the Commission as the most cost‑effective cleanup, the Department shall not pay or reimburse for costs in excess of the cost of implementing the approved cost‑effective cleanup.
(f)	This section shall not be construed to limit the authority of the Commission to require investigation, initial response, and abatement of a discharge or release pending a determination by the Commission under subsection (d) of this section as to whether cleanup, further cleanup, or further action will be required.
(g)	Subsections (c) through (e1) of this section apply only to assessments and cleanups in progress or begun on or after 2 January 1998.
(h)	If a discharge or release of petroleum from an underground storage tank results in contamination in soil or groundwater that becomes commingled with contamination that is the result of a discharge or release of petroleum from a source of contamination other than an underground storage tank, the cleanup of petroleum may proceed under rules adopted pursuant to this section."
SECTION 10.(a)  Notwithstanding subsection (a) of 15A NCAC 02N .0903 (Underground Storage Tanks: Tanks), from the effective date of this act the Department of Environment and Natural Resources shall not prohibit the use of tanks that are constructed of steel and cathodically protected as provided in 40 Code of Federal Regulations § 280.20(a)(2) (July 1, 2010 Edition) in order to meet the external corrosion protection standards of that rule.
SECTION 10.(b)  No later than January 1, 2012, the Environmental Management Commission shall adopt rules consistent with the provisions of Section 10(a) of this act.  Notwithstanding G.S. 150B‑19(4), the rules adopted by the Commission pursuant to this section shall be substantively identical to the provisions of Section 10(a) of this act.
SECTION 11.  This act is effective when it becomes law and applies to assessments that are initiated on or after that date, except that (i) Section 3 applies to discharges or releases discovered or reported on or after January 1, 2009, and (ii) G.S. 143‑215.94V(c1), as enacted by Section 9 of this act, applies to discharges or releases reported on or before January 2, 1998.