1.1                          A bill for an act 
  1.2             relating to the environment; petroleum release 
  1.3             compensation fund; authorizing reimbursement for 
  1.4             certain costs; amending Minnesota Statutes 1996, 
  1.5             section 115C.09, subdivision 3. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1996, section 115C.09, 
  1.8   subdivision 3, is amended to read: 
  1.9      Subd. 3.  [REIMBURSEMENTS; SUBROGATION; APPROPRIATION.] (a) 
  1.10  The board shall reimburse an eligible applicant from the fund in 
  1.11  the following amounts: 
  1.12     (1) 90 percent of the total reimbursable costs on the first 
  1.13  $250,000 and 75 percent on any remaining costs in excess of 
  1.14  $250,000 on a site; 
  1.15     (2) for corrective actions at a residential site used as a 
  1.16  permanent residence at the time the release was discovered, 92.5 
  1.17  percent of the total reimbursable costs on the first $100,000 
  1.18  and 100 percent of any remaining costs in excess of $100,000; or 
  1.19     (3) 90 percent of the total reimbursable costs on the first 
  1.20  $250,000 and 100 percent of the cumulative total reimbursable 
  1.21  costs in excess of $250,000 at all sites in which the 
  1.22  responsible person had interest, and for which the commissioner 
  1.23  has not issued a closure letter as of April 3, 1996, if the 
  1.24  responsible person dispensed less than 1,000,000 gallons of 
  1.25  petroleum at each location in each of the last three calendar 
  2.1   years that the responsible person dispensed petroleum at the 
  2.2   location and: 
  2.3      (i) has owned no more than three locations in the state at 
  2.4   which motor fuel was dispensed into motor vehicles and has 
  2.5   discontinued operation of all petroleum retail operations; or 
  2.6      (ii) has owned no more than one location in the state at 
  2.7   which motor fuel was dispensed into motor vehicles; or 
  2.8      (4) 95 percent of the total amount of all of the following 
  2.9   costs, regardless of whether a release has occurred at the 
  2.10  site:  tank removal, closure in place, backfill, resurfacing, 
  2.11  utility service restoration, and, if a release has occurred at 
  2.12  the site, any reimbursable costs under subdivision 1.  This 
  2.13  clause applies only if the tank or tanks involved are 
  2.14  underground tanks, and if the responsible person dispensed less 
  2.15  than 400,000 gallons of motor fuel during the last year in which 
  2.16  petroleum products were dispensed to the public at the location, 
  2.17  and the responsible person owns no more than one location in 
  2.18  this or any other state at which motor fuel was dispensed into 
  2.19  motor vehicles or watercraft. 
  2.20     Not more than $1,000,000 may be reimbursed for costs 
  2.21  associated with a single release, regardless of the number of 
  2.22  persons eligible for reimbursement, and not more than $2,000,000 
  2.23  may be reimbursed for costs associated with a single tank 
  2.24  facility. 
  2.25     (b) A reimbursement may not be made from the fund under 
  2.26  this chapter until the board has determined that the costs for 
  2.27  which reimbursement is requested were actually incurred and were 
  2.28  reasonable. 
  2.29     (c) When an applicant has obtained responsible competitive 
  2.30  bids or proposals according to rules promulgated under this 
  2.31  chapter prior to June 1, 1995, the eligible costs for the tasks, 
  2.32  procedures, services, materials, equipment, and tests of the low 
  2.33  bid or proposal are presumed to be reasonable by the board, 
  2.34  unless the costs of the low bid or proposal are substantially in 
  2.35  excess of the average costs charged for similar tasks, 
  2.36  procedures, services, materials, equipment, and tests in the 
  3.1   same geographical area during the same time period. 
  3.2      (d) When an applicant has obtained a minimum of two 
  3.3   responsible competitive bids or proposals on forms prescribed by 
  3.4   the board and where the rules promulgated under this chapter 
  3.5   after June 1, 1995, designate maximum costs for specific tasks, 
  3.6   procedures, services, materials, equipment and tests, the 
  3.7   eligible costs of the low bid or proposal are deemed reasonable 
  3.8   if the costs are at or below the maximums set forth in the rules.
  3.9      (e) Costs incurred for change orders executed as prescribed 
  3.10  in rules promulgated under this chapter after June 1, 1995, are 
  3.11  presumed reasonable if the costs are at or below the maximums 
  3.12  set forth in the rules, unless the costs in the change order are 
  3.13  above those in the original bid or proposal or are 
  3.14  unsubstantiated and inconsistent with the process and standards 
  3.15  required by the rules. 
  3.16     (f) A reimbursement may not be made from the fund in 
  3.17  response to either an initial or supplemental application for 
  3.18  costs incurred after June 4, 1987, that are payable under an 
  3.19  applicable insurance policy, except that if the board finds that 
  3.20  the applicant has made reasonable efforts to collect from an 
  3.21  insurer and failed, the board shall reimburse the applicant. 
  3.22     (g) If the board reimburses an applicant for costs for 
  3.23  which the applicant has insurance coverage, the board is 
  3.24  subrogated to the rights of the applicant with respect to that 
  3.25  insurance coverage, to the extent of the reimbursement by the 
  3.26  board.  The board may request the attorney general to bring an 
  3.27  action in district court against the insurer to enforce the 
  3.28  board's subrogation rights.  Acceptance by an applicant of 
  3.29  reimbursement constitutes an assignment by the applicant to the 
  3.30  board of any rights of the applicant with respect to any 
  3.31  insurance coverage applicable to the costs that are reimbursed.  
  3.32  Notwithstanding this paragraph, the board may instead request a 
  3.33  return of the reimbursement under subdivision 5 and may employ 
  3.34  against the applicant the remedies provided in that subdivision, 
  3.35  except where the board has knowingly provided reimbursement 
  3.36  because the applicant was denied coverage by the insurer. 
  4.1      (h) Money in the fund is appropriated to the board to make 
  4.2   reimbursements under this chapter.  A reimbursement to a state 
  4.3   agency must be credited to the appropriation account or accounts 
  4.4   from which the reimbursed costs were paid. 
  4.5      (i) The board may reduce the amount of reimbursement to be 
  4.6   made under this chapter if it finds that the applicant has not 
  4.7   complied with a provision of this chapter, a rule or order 
  4.8   issued under this chapter, or one or more of the following 
  4.9   requirements: 
  4.10     (1) the agency was given notice of the release as required 
  4.11  by section 115.061; 
  4.12     (2) the applicant, to the extent possible, fully cooperated 
  4.13  with the agency in responding to the release; and 
  4.14     (3) the state and federal rules and regulations applicable 
  4.15  to the condition or operation of the tank when the noncompliance 
  4.16  caused or failed to mitigate the release. 
  4.17     (j) The reimbursement may be reduced as much as 100 percent 
  4.18  for failure by the applicant to comply with the requirements in 
  4.19  paragraph (i), clauses (1) to (3).  In determining the amount of 
  4.20  the reimbursement reduction, the board shall consider:  
  4.21     (1) the reasonable determination by the agency of the 
  4.22  environmental impact of the noncompliance; 
  4.23     (2) whether the noncompliance was negligent, knowing, or 
  4.24  willful; 
  4.25     (3) the deterrent effect of the award reduction on other 
  4.26  tank owners and operators; and 
  4.27     (4) the amount of reimbursement reduction recommended by 
  4.28  the commissioner. 
  4.29     (k) An applicant may assign the right to receive 
  4.30  reimbursement to each lender who advanced funds to pay the costs 
  4.31  of the corrective action or to each contractor or consultant who 
  4.32  provided corrective action services.  An assignment must be made 
  4.33  by filing with the board a document, in a form prescribed by the 
  4.34  board, indicating the identity of the applicant, the identity of 
  4.35  the assignee, the dollar amount of the assignment, and the 
  4.36  location of the corrective action.  An assignment signed by the 
  5.1   applicant is valid unless terminated by filing a termination 
  5.2   with the board, in a form prescribed by the board, which must 
  5.3   include the written concurrence of the assignee.  The board 
  5.4   shall maintain an index of assignments filed under this 
  5.5   paragraph.  The board shall pay the reimbursement to the 
  5.6   applicant and to one or more assignees by a multiparty check.  
  5.7   The board has no liability to an applicant for a payment under 
  5.8   an assignment meeting the requirements of this paragraph. 
  5.9      Sec. 2.  [EFFECTIVE DATE.] 
  5.10     Section 1 is effective January 1, 1997, and is repealed as 
  5.11  of December 31, 1999.