BILL ANALYSIS H.B. 843 By: Alexander April 17, 1995 Committee Report (Amended) BACKGROUND In the fall of 1992, the Texas Natural Resource Conservation Commission (TNRCC) shut down the Petroleum Storage Tank Remediation (PSTR) fund, suspending all reimbursements because of claims $150 million in excess of money available. Since the fund was established as a state financed insurance program in compliance with federal requirements, closing the fund left the state vulnerable to sanctions by the Environmental Protection Agency (EPA). As a consequence, this action alarmed small tank owners in Texas, many of which could not find or afford private tank insurance. Current law (Subchapter I, Chapter 26 Water Code and Vernon's Texas Civil Statutes, Section 403.092) provided for a loan of $120 million to the PSTR fund from general revenue ($60 million for each year of the biennium) in order that claims submitted as of August 31, 1993 by eligible tank owners could be paid. The act also provided that the full amount of the fees collected would go directly to the general revenue fund until the loan was repaid. When the fund was temporarily shut down, the PST Division of the TNRCC notified tank owners in writing that there would be no reimbursements for remediation work until the general revenue loan is repaid. During the interim, Lieutenant Governor Bullock and Speaker Laney appointed a six member Joint Interim Committee on Petroleum Storage Tanks to review the administration and procedures of the PSTR Fund and to review all state and federal laws and agency rules governing the PSTR Fund and the PST program at the TNRCC. This bill addresses several of the Interim Committee's recommendations concerning the solvency of the PSTR Fund. At this time, there is a two-year backlog of claims upon the PSTR fund dating from September 1, 1993. The fees assessed on petroleum products upon delivery to tanks are not sufficient to fund all claims received. PURPOSE House Bill 843 provides for the solvency of the Petroleum Storage Tank Remediation Fund and allows for remediation of contaminated PST sites to continue as required by Texas' "Groundwater Protection Act" and the federal "Resource Conservation and Recovery Act". RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter I, Chapter 26, Water Code, by adding Section 26.35731 providing for equal access to the Petroleum Storage Tank Remediation Fund by all eligible claimants and requires that claims be paid in the order they are received by the TNRCC. SECTION 2. Amends Section 26.3574 (b), Water Code, by doubling the current fee charged for delivery of petroleum products into cargo tanks; amends Section 26.3574 (x), Water Code, by lowering the cap on the unobligated balance in the Petroleum Storage Tank Remediation Fund from $100 million to $50 million. Once this cap is reached the assessment of delivery fees is suspended; amends Section 26.3574(y), Water Code, by requiring that if the unobligated fund balance drops below $25 million and the delivery fee is reinstated, it is assessed at 1/2 the fee set by Section 2 of this bill. SECTION 3. Amends Section 403.092 (c)(1), Government Code, changing the fiscal biennium specified in law so that the Comptroller may transfer funds, not to exceed $120 million, from the general revenue fund to the petroleum storage tank remediation fund in the 1996-1997 biennium, and changes the date that the transfer takes place; amends Section 403.092 (c)(2), Government Code, by requiring that one-half of the fees collected under Section 26.3574, Water Code, be deposited directly into the general revenue fund until the deposits equal the amount of the temporary loan made by the Comptroller; further requires that the remaining money collected under Section 26.3574 be deposited directly into the petroleum storage tank remediation fund so that the clean-up of contaminated petroleum storage tanks sites can continue; amends Section 403.092 (c)(4), Government Code, by providing for the expiration of this subsection after August 31, 1997, or the date that the temporary transfer made by the comptroller under Section 403.092 (c)(1), is repaid in full. This subsection ensures that any loan to the PSTR fund must be mandated by statute. SECTION 4. Effective date of September 1, 1995. SECTION 5. Emergency Clause. EXPLANATION OF AMENDMENTS The amendment places a firm deadline on tank registration and prohibits reimbursement from the PSTR fund for tanks not registered by that date; postpones reimbursement for remediation work if prior commission approval was not sought while prior approval rules were in place until after work pre-approved by the commission has been reimbursed; provides for complete repayment of the loan from GR before the fees can be reduced upon reaching the fund balance of $50 million; provides a repayment schedule to the general revenue fund; allows the TNRCC to authorize privatization of any part of the program; and provides for the sunset of the reimbursement portion of the PST program. SUMMARY OF COMMITTEE ACTION HB 843 was considered in a full committee public hearing on March 21, 1995. Gilbert Herrera, Consultant, Dan Pearson, Executive Director of the TNRCC, and Joe Woodard, PST Division of the TNRCC testified on the bill. The bill was left pending in committee. HB 843 was taken up and considered again in a full committee public hearing on April 12, 1995. No witnesses testified on the bill. An amendment was offered by Chairman Junell and adopted without objection. The motion to report the bill favorably, as amended, to the Committee on Calendars carried by a vote of 18 ayes, 0 nays, 0 PNV and 9 absent.