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.