BILL ANALYSIS



H.B. 2587
By: Alexander
4-18-95
Committee Report (Unamended)


BACKGROUND
The Petroleum Storage Tank Remediation Fund (PSTRF) was created in
1989 to help parties pay for expenses related to corrective action
for leaking storage tanks.  Claimants can apply for reimbursement
of their remediation expenses less the deductible amount, which
varies from $1000 to $10,000, depending on the number of tanks that
a claimant owns or operates.  The PSTRF is a fund approved by the
Environmental Protection Agency as an allowable mechanism for tank
owners and operators to use to satisfy part of the financial
assurance requirements in the state and federal underground storage
tank rules.

The demands on the PSTRF have exceeded available balances in the
fund for the last four years.  A backlog of claims to be processed
has developed as the cumulative amounts for the claims received by
the Texas Natural Resource Conservation Commission (TNRCC) are
greater than the amounts available for payment from the PSTRF. 
Despite the relatively large funding source this fund has compared
to similar reimbursement funds in other states, there is not
sufficient funding in the PSTRF to handle all the claims that can
be expected to be made in the future.

To ensure that the fund is available for as many tank owners or
operators as possible, there are a number of controls in place that
promote the most cost effective and efficient use of the
reimbursement fund.  One of these controls is the prohibition of
paying interest to claimants for expenses they have paid and are
applying for reimbursement.  This particular control was added by
SB 1243 in 1993 which specified that owners and operators are not
entitled to any interest on reimbursement claims they file with the
TNRCC.  Another control is the registration of persons and
environmental consultants who perform corrective action for owners
or operators at leaking tank sites.  In this manner, only firms and
individuals who are familiar with and have experience in the
environmental corrective action field will be attempting to do the
required work and assisting owners and operators to apply for
reimbursement for the appropriate phases of work performed.

Also related to the storage tank program is the licensing and
certification of contractors who install, repair, or remove
underground tanks.  The TNRCC was delegated as the implementing
agency for the licensing and certification of contractors; this
authority was never codified in the Texas Water Code.  As a result,
the TNRCC has limited enforcement capabilities in this part of the
program since the Texas Water Code grants the TNRCC administrative
penalties, and the enforcement authority granted in the statute
creating the licensing and certification of contractors is
restricted to the suspension and revocation of licenses.

Experience has shown that there is a need to strengthen the
controls and demands on the PSTRF.  The PSTRF serves its purpose
only if it remains a reliable and viable source of funding for
reimbursing owners and operators.

PURPOSE
To phase out the PSTRF and encourage owners and operators to
consider other means of satisfying their financial assurance
requirements once their tanks have been equipped with the
preventative systems which are required on all underground storage
tanks by December 22, 1998.  The bill also gives the TNRCC improved
enforcement capabilities over consultants who perform corrective
action at leaking storage tank sites and contractors who install,
repair, or remove storage tanks.

To clarify the issue of interest on reimbursement claims, the bill
modifies the language to say neither tank owners nor operators, nor
their agents, are entitled to interest charges.

To cover the administrative costs of registering individuals and
companies that perform corrective action duties at tank sites, the
bill authorizes the TNRCC to establish a fee schedule similar to
that for tank installers.

RULEMAKING AUTHORITY
It is the committee's opinion that the bill expressly grants
additional rulemaking authority to the Texas Natural Resource
Conservation Commission at Section 5 of the bill, at amended
Section 26.3573(i), Water Code.

SECTION BY SECTION ANALYSIS
SECTION 1.  Amends Chapter 26, Section 26.3512(b), Texas Water
Code, by making expenses for corrective action at releases
discovered after December 22, 1998 ineligible for reimbursement.

SECTION 2.  Amends Chapter 26, Section 26.353, Texas Water Code, as
follows:
Sec. 26.353(b) is amended to say that the Registration Certificate
issued to tank owners can only be used as proof of eligibility for
reimbursement for the PSTRF for releases that are discovered before
December 22, 1998.

Sec. 26.353(c) is added to stipulate that certain types of tanks
are eligible for reimbursement even if they are not issued a
Registration Certificate (eg, hydraulic lift systems which are not
subject to registration), and other types are not eligible for
reimbursement even though they are issued a Registration
Certificate (eg, non-petroleum product tanks).  The Registration
Certificate is not evidence for any tanks that have releases after
December 22, 1998.

Sec. 26.353(d) is added to provide for administrative and civil
penalties and criminal prosecution against owners and operators who
do not maintain financial responsibility for their tanks.  The
TNRCC can seek an injunction from the courts to have a tank closed
if it is not covered by a financial assurance mechanism.

SECTION 3.  Amends Chapter 26, Section 26.3573, Texas Water Code,
as follows:
Sec. 26.3573(d)(1) is amended to remove the restriction on funding
distribution within the TNRCC as needed for administrative expenses
and provided from the PSTRF.

Sec. 26.3573(f) is amended by setting a deadline whereby releases
must be discovered before any corrective action expenses can be
reimbursed.

Sec. 26.3573(h)(2) is amended by moving the TNRCC authorization to
establish minimum qualification guidelines for Corrective Action
Specialists and Project Manager to Section 26.3573(i).

Sec. 26.3573(i) is amended by adding the provision for the minimum
qualifications for Corrective Action Specialists and Project
Managers.  This Section is amended further by adding a fee
provision for the administration of the registration of Corrective
Action Specialists and Project Managers.  The bill also adds
enforcement sanctions and penalties against Corrective Action
Specialists and Project Managers.

Sec. 26.3573(k) is amended by dropping the reference to the Prompt
Payment Act and authorizing the TNRCC to adopt rules for the
payment of reimbursement claims.

Sec. 26.3573(p) is amended by rewording the prohibition of the
payment of interest charges to owners, operators, or their agents.

SECTION 4.  Amends Chapter 244, Acts of the 71st Legislature,
Regular Session, 2989 (Article 8900, Vernon's Texas Civil Statutes)
by recodifying it as Subchapter K, Chapter 26, Texas Water Code. 
Chapter 244 (to be recodified as Chapter 26, Subchapter K, Sections
26.451 through 26.461) is amended further as follows:
Sec. 26.452(b) is reworded to provide for the initial issuance of
a Certificate of Registration of a period of less than one year.

Sec. 26.453 is amended by (a)removing any statutory exceptions to
only authorized contractors repairing or removing underground
storage tanks and (b)removing language indicating that a license is
not transferrable.

Sec. 26.458 is amended by changing the reference to the storage
tank fund.

Sec. 26.459(c) is amended to reflect the re-codification of the
Texas Administrative Procedures Act, removing statutory references.

Sec. 26.460 is amended by deleting subsection 26.460(f) which
referenced Article 6252-33, Revised Statutes on state agency
advisory committees.

Sec. 26.461 is amended to add provisions for criminal, civil, and
administrative penalties against tank installers.  Section 26.461
is amended further by the deletion of sec. 12 in reference to
initial appointments to the Petroleum Storage Tank Advisory
Committee. Sec. 13, the effective date of for license requirement
is also deleted.

SECTION 5.  Amends Chapter 26, Texas Water Code, by adding the
reference of the Petroleum Storage Tank Advisory Committee from
Chapter 244, Acts of the 71st Legislature, Regular Session, 1989
and providing for the continuation of service for each committee
member until the expiration of their term.

SECTION 6.  The provisions for criminal, civil, and administrative
penalties found in Section 26.461 only applies to offenses
committed or violations occurring on or after September 1, 1995.

SECTION 7.  Effective Date.

SECTION 8.  Emergency Clause.



SUMMARY OF COMMITTEE ACTION
H.B.2587 was considered by the committee in a public hearing on
April 18, 1995.
The following persons testified in favor of the bill: None (0).
The following persons testified against the bill: None (0).
The following persons testified on the bill: 
     Mr. Joe D. Woodard, representing himself;
     Mr. Gerhardt Schulle, Jr., representing Texas Society of
Professional Engineers.
The bill was reported favorably without amendment, with the
recommendation that it do pass and be printed, by a record vote of
8 ayes, 0 nays, 0 pnv, 1 absent.