BILL ANALYSIS
C.S.H.B. 2587
By: Alexander (Brown)
Natural Resources
05-10-95
Senate Committee Report (Substituted)
BACKGROUND
Chapter 26I of the Water Code was enacted by the legislature to
regulate the use of underground and aboveground storage tanks. At
the time of passage, the legislature found that leaking underground
storage tanks storing hazardous, toxic, or otherwise harmful
substances have caused and continue to pose groundwater
contamination problems. The purpose of Subchapter I is to protect
groundwater and surface water resources from certain substances in
underground and aboveground storage tanks that could pollute
groundwater and surface water resources.
PURPOSE
As proposed, C.S.H.B. 2587 amends certifying, licensing, and
regulation of underground petroleum storage tank owners, operators,
and installers; amends regulation of certain above ground storage
tanks; provides penalties for violations by a person or business
entity of rules adopted or orders issued to perform the regulation.
RULEMAKING AUTHORITY
It is the committee's opinion that rulemaking authority is granted
to the Texas Natural Resource Conservation Commission under
SECTIONS 5, 8, 9, 10, and 14 (Sections 26.3512(e) and (f),
26.352(a), 26.3572(b) and (c), 26.3573(i), 26.360, and 26.362,
Water Code) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 26.341(b), Water Code, to provide that
the legislature declares that it is the state's policy and the
purpose of this subchapter to require the use of all reasonable
methods, including risk-based corrective action, to implement this
policy, among other purposes.
SECTION 2. Amends Section 26.342, Water Code, by adding Subdivision
(13) and renumbering subsequent subdivisions, to define "risk-based
corrective action." Redesignates existing Subdivisions (13)-(15)
as Subdivisions (14)-(16).
SECTION 3. Amends Section 26.346, Water Code, by adding Subsections
(e) and (f), as follows:
(e) Provides that the owner or operator of an underground or
aboveground storage tank installed before December 1, 1995,
that is required to be registered, and that has not been
registered by December 31, 1995, is not eligible to receive
reimbursement for that tank from the petroleum storage tank
remediation fund (fund) except for an owner of a registered
facility who discovers an unregistered tank; a state or local
government agency that discovers the unregistered tank; or a
property owner who did not know that the tank was located on
the property.
(f) Requires the owner of an underground or aboveground
storage tank installed on or after December 1, 1995, to
register the tank by the 30th day after the installation is
completed to be eligible for reimbursement for the new tank.
SECTION 4. Amends Chapter 26I, Water Code, by adding Section
26.3475, as follows:
Sec. 26.3475. RELEASE DETECTION REQUIREMENTS; SPILL AND
OVERFILL PROTECTION; CORROSION PROTECTION; NOTICE OF
VIOLATION; SHUTDOWN. (a) Requires all piping in an
underground storage tank (tank) system that conveys regulated
substances under pressure to comply with Texas Natural
Resource Conservation Commission (commission) requirements for
pressurized piping release detection equipment.
(b) Requires all piping in a tank system that conveys
regulated substances under suction to comply with commission
requirements for suction-type piping release detection
equipment.
(c) Sets forth commission requirements for a tank in a tank
system.
(d) Requires a tank system to comply with commission
requirements for applicable tank integrity assessment and
corrosion protection by December 22, 1998.
(e) Authorizes the commission to issue a notice of violation
to the owner or operator (owner) of a tank system that does
not comply with this section, informing the owner of the
violation and that the commission may order the noncomplying
tank system placed out of service if the owner does not
correct the violation within 30 days after the notice was
received. Authorizes the commission to order the
noncomplying tank system out of service if the owner does
not correct the violation within the prescribed time.
SECTION 5. Amends Section 26.3512, Water Code, by amending
Subsections (b) and (e) and by adding Subsections (f)-(k), as
follows:
(b) Provides that the owner of a petroleum storage tank
ordered by the commission to take corrective action is
responsible for the payment of, among others, the owner
contribution prescribed by Subsections (e)-(k), rather than
only Subsection (e); any expenses for corrective action
exceeding the applicable amount specified by Section
26.3573(l), rather than that exceed $1 million for each
occurrence; any expenses for corrective action incurred for
confirmed releases initially discovered and reported to the
commission after December 22, 1998.
(e) Provides a schedule for the required payment of expenses
by the owner for corrective action taken for each occurrence
if an owner submits to a site assessment in accordance with
commission rules by December 23, 1996.
(f) Provides a schedule for the required payment of expenses
by the owner for corrective action taken for each occurrence,
if an owner does not submit to a site assessment in accordance
with commission rules by December 23, 1996.
(g) Requires the owner to pay under Subsection (b)(1) the
amount provided by Subsection (e) for the first expenses for
corrective action taken for each occurrence if an owner's
corrective action plan is approved by the commission before
December 23, 1997.
(h) Provides a schedule for the required payment of expenses
by the owner for corrective action taken for each occurrence
if an owner's corrective action plan is not approved by the
commission before December 23, 1997.
(i) Requires the owner to pay under Subsection (b)(1) the
amount specified by Subsection (e) for the first expenses for
corrective action taken for each occurrence if an owner has a
corrective action plan approved by the commission before
December 23, 1998, that has met the goals specified in the
plan to be met by that date.
(j) Provides a schedule for the required payment of expenses
by the owner for corrective action taken for each occurrence
if an owner does not have a corrective action plan approved by
the commission or, on December 23, 1998, has not met the goals
specified in the plan to be met by that date.
(k) Requires an owner of a site for which a closure letter has
been issued under Section 26.3572 to pay under Subsection
(b)(1) the first $50,000 of expenses for corrective action for
each occurrence.
SECTION 6. Amends Section 26.3513, Water Code, by adding Subsection
(m), to require the commission to consider the person who is in
day-to-day control of a petroleum storage tank system at a site
that is in violation to be the primary person responsible for
taking corrective action and receiving the notice; and to be the
primary subject of enforcement action.
SECTION 7. Amends Section 26.3514, Water Code, by adding
Subsections (f)-(i), as follows:
(f) Provides that a lender is not liable as an owner because
the lender sells, re-leases, liquidates, or winds up
operations and preserves, protects, or prepares the secured
aboveground or underground storage tank before the sale or
other disposition of the storage tank or the property if the
lender meets certain criteria.
(g) Authorizes a lender to establish that the ownership
indicia maintained after the foreclosure continue to be held
to protect a security interest if the lender performs certain
actions within 12 months after foreclosure.
(h) Provides that the 12-month period begins, for the purposes
of Subsection (g), when the lender acquires marketable title;
or on the date of foreclosure or its equivalent.
(i) Provides that if a lender outbids, rejects, or does not
act on an offer for the aboveground or underground storage
tank or the facility or property on which the tank is located,
it is presumed that the lender is not holding the ownership
indicia primarily to protect the security interest unless the
lender is required to take a certain action in order to avoid
liability under federal or state law.
SECTION 8. Amends Section 26.352, Water Code, as follows:
Sec. 26.352. FINANCIAL RESPONSIBILITY. (a) Requires the
commission, by rule, to adopt requirements for maintaining
evidence of financial responsibility for taking corrective
action and compensating third parties for bodily injury and
property damages resulting from certain causes.
(b) Requires the rules to require, after December 22, 1998,
the owner of a site for which a closure letter has been
issued to have insurance coverage or evidence of financial
responsibility to satisfy all financial responsibility
requirements under federal law or regulations. Requires the
rules to require an owner of a site that has been issued a
closure letter and who is eligible to have a portion of any
future paid corrective action costs to have insurance
coverage or evidence of financial responsibility to satisfy
the first expenses for corrective action as provided by
Section 26.3512(k).
(c) Requires the commission to seek the assistance of the
Texas Department of Insurance in developing the minimum
requirements for insurance coverage required under this
section.
(d) Authorizes an owner of a tank to submit the registration
certificate issued by the commission to the U.S.
Environmental Protection Agency as evidence of the owner's
eligibility for funds for any expenses for corrective action
incurred for confirmed releases initially discovered and
reported to the commission on or before December 22, 1998,
rather than a corrective action from the fund.
(e) Provides that a registration certificate is not
accessible evidence of financial responsibility for a tank
that contains certain petroleum substances, among others.
Makes a conforming change.
(f) Requires the commission to enforce this section.
Authorizes the commission to impose administrative and civil
penalties on the owners of tanks if evidence of financial
responsibility is not maintained. Provides that an owner
commits an offense if the owner operates a tank knowing that
evidence of financial responsibility does not exist and is
subject to criminal prosecution. Authorizes the commission
to seek injunctive relief in Travis County district courts
to force temporary or permanent closure of an underground
storage tank for which evidence of financial responsibility
is not maintained.
SECTION 9. Amends Section 26.3572, Water Code, by amending
Subsections (b) and (c) and by adding Subsection (d), as follows:
(b) Requires the commission, in administering the groundwater
protection cleanup program (program), to perform certain acts,
including negotiating with or directing parties in site
assessment and remediation matters using risk-based corrective
action; approving site-specific corrective action plans for
each site as necessary using risk-based corrective action;
using risk-based corrective action procedures as determined by
commission rule to establish cleanup levels; adopt, by rule,
criteria for assigning a priority to each site using risk-based corrective action and assign a priority to each site
according to those criteria; and adopt, by rule, criteria for
risk-based corrective action site closures and for the
issuance of a closure letter.
(c) Authorizes the commission, by rule, to approve its site
assessment methods. Requires the commission to approve or
disapprove a site assessment or corrective action plan, as
defined by commission rule, by the 30th day after the
commission receives the assessment or plan.
(d) Prohibits the commission from approving a corrective
action plan until the commission and the owner of the site by
agreement set specific goals in the plan for completing
discrete corrective action tasks before specified dates.
Provides that the owner or operator is responsible for meeting
the goals.
SECTION 10. Amends Sections 26.3573(d), (f), (h), (i), (k), and
(p), Water Code, as follows:
(d)(1) Authorizes the increment between two and five percent,
rather than between two and three percent, of the gross
receipts of the fund to be used only to pay administrative
expenses associated with regulating the petroleum storage
tanks, reimbursing eligible owners, disposing of contaminated
soils, and conducting claims audits. Deletes language
authorizing between three and five percent of the gross
receipts to be used for conducting claims audits, reimbursing
eligible owners, and disposing of contaminated soils.
(2) and (3) Make no change.
(f) Authorizes the commission to perform certain acts
including reimbursing an eligible owner from the fund for
expenses of a corrective action that was performed on or after
September 1, 1987; and conducted in response to a confirmed
release that was initially discovered and reported to the
commission on or before December 22, 1998.
(h) Deletes language authorizing the commission, by rule, to
adopt minimum qualifications the commission considers
necessary for a person with whom an eligible owner may
contract to participate in corrective action.
(i) Authorizes the commission, by rule, to implement a
registration program for persons who contract with an owner of
a tank or an aboveground storage tank, or with any person, to
perform corrective action. Requires the commission, on the
request of an appropriately licensed or registered
professional engineer, to register the engineer in the
program. Authorizes an engineer registered in the program to
contract to perform corrective action unless the State Board
of Registration for Professional Engineers (SBRPE) determines
the engineer is not qualified to perform a corrective action.
Subjects an engineer registered in the program only to
examination requirements, continuing education requirements,
fees, and disciplinary procedures adopted by SBRPE.
Authorizes the commission to adopt minimum qualifications for
a person, other than an appropriately licensed or registered
professional engineer, with whom an owner may contract to
participate in corrective action and for a person, other than
an appropriately licensed or registered professional engineer,
who performs or supervises the corrective action. Authorizes
the commission to require the use, rather than registration
and the use, of registered contractors and registered
corrective action supervisors by an eligible owner as a
prerequisite to the payment of, rather than receiving, money
from the fund for corrective action. Authorizes any qualified
registered contractor to conduct the characterization, study,
appraisal, or investigation of a site. Provides that if a
site remediation involves the installation or construction of
on-site equipment, structures, or systems used in the
extraction or management of wastes, except for soil excavation
and landfill disposal or well sampling and monitoring, the
owner is not eligible for reimbursement from the fund unless
the plans and specifications for the equipment, structures, or
systems are sealed by an appropriately licensed or registered
professional engineer and the equipment, structures or systems
are constructed under the supervision of an appropriately
licensed or registered professional engineer. Authorizes the
commission, by rule, to establish a fee schedule and charge
fees to defray the costs of administering the registration
program including certain fees. Requires the fees collected
to be deposited in the state treasury to the credit of the
storage tank fund. Provides that a person who violates a rule
or order adopted by the commission is subject to the
appropriate sanctions and penalties.
(k) Requires the commission to satisfy a claim for payment
that is eligible to be paid under this subchapter, and rules
adopted under this subchapter made by a contractor, from the
fund as provided by this section and rules adopted by the
commission under this section, rather than Chapter 82, Article
601f, V.T.C.S.
(p) Provides that an owner, or any agent of an owner, is not
entitled to and may not be paid interest on any claim for
payment from the fund. Makes nonsubstantive changes.
SECTION 11. Amends Chapter 26I, Water Code, by adding Section
26.35731, as follows:
Sec. 26.35731. CONSIDERATION AND PROCESSING OF APPLICATIONS
FOR REIMBURSEMENT. (a) Requires the commission, except as
provided by Subsection (b), to consider and process a claim by
an eligible owner for reimbursement from the fund in the order
it is received. Requires the commission to consider and
process all claims by eligible owners for reimbursement from
the fund that were received by September 1, 1995, before the
commission considers a claim received after that date.
(b) Prohibits the commission from considering, processing,
or paying a claim for reimbursement from the fund for
corrective action work begun after September 1, 1993, and
without prior commission approval until all claims for
reimbursement for corrective action work preapproved by the
commission have been considered, processed, or paid.
SECTION 12. Amends Section 26.35735, Water Code, by adding
Subsections (e) and (f), as follows:
(e) Authorizes the commission to audit a claim for payment as
required by this section only under certain guidelines or in
a case of suspected fraud.
(f) Requires the commission, by the 90th day after an audit
has been completed, to send a copy of the audit to the person
whose claim for payment is the subject of the audit.
SECTION 13. Amends Sections 26.3574(b), (x), and (y), Water
Code, as follows:
(b) Doubles the required fee paid by a person ordering a
withdrawal and collected by the operator of a bulk facility
for delivery of a petroleum product on withdrawal from bulk of
that product.
(x) Prohibits the fee imposed under this section from being
collected on or after the first day of the second month
following notification by the commission of the date on which
the unobligated balance in the fund is $125 million or more,
after the deposits have been made to the credit of the general
revenue fund.
(y) Requires the fee to be reinstated if the unobligated
balance is less than $25 million. Provides that the fees be
$12.50 for each delivery into a cargo tank of less than 2,500
gallons, $25 for each delivery of 2,500 to less than 5,000
gallons, $37.50 for each delivery of 5,000 to less than 8,000
gallons, $50 for each delivery of 8,000 to less than 10,000
gallons, and $25 for each increment of 5,000 gallons or any
part thereof delivered into a cargo tank of 10,000 gallons or
more.
SECTION 14. Amends Chapter 26I, Water Code, by adding Sections
26.360-26.363, as follows:
Sec. 26.360. PRIVATIZATION OF PROGRAM. Authorizes the
commission, by rule, to authorize the privatization of any
part of the program.
Sec. 26.361. EXPIRATION OF REIMBURSEMENT PROGRAM. Provides
that the reimbursement program established under this
subchapter expires September 1, 2001. Prohibits the
commission, on or after September 1, 2001, from using money
from the fund to reimburse eligible owners for corrective
action; or collecting a fee under Section 26.3574.
Sec. 26.362. SUIT TO TEST VALIDITY OF CLOSURE LETTER.
Provides that the commission is immune from liability in any
action against the commission to test the validity of a
closure letter if the letter is issued in accordance with
commission rules.
Sec. 26.363. RELIANCE ON CLOSURE LETTER. Prohibits an owner
to whom a closure letter for a site has been issued from being
held liable for the owner's conduct taken in reliance on and
within the scope of the closure letter.
SECTION 15. Redesignates Article 8900, V.T.C.S., as Chapter 26K,
Water Code, as follows:
SUBCHAPTER K. New heading: UNDERGROUND STORAGE TANK INSTALLERS
(Redesignates existing Article 8900)
Sec. 26.451. DEFINITIONS. Redesignates existing Section 1.
Redefines "certificate of registration," "critical junctures,"
"license," and "on-site supervisor." Deletes the definition
of "commission." Makes a nonsubstantive change. Redesignates
existing Subdivisions (4), (5)-(10), and (12) as Subdivisions
(5), (8)-(13), and (14).
Sec. 26.452. CERTIFICATE OF REGISTRATION. Redesignates
existing Section 2. (a) Makes no change.
(b) Authorizes an initial certificate of registration
authorizing a tank contractor to engage in tank business
(certificate of registration) to be issued for a period of
less than one year. Deletes language authorizing initial
certificates of registration issued on or after September 1,
1989, to be issued for periods of less than one year.
(c) and (d) Make no change.
(e) Provides that a certificate of registration issued under
this subchapter, rather than Act, is not transferrable.
Sec. 26.453. LICENSE REQUIRED. Redesignates existing
Section 3. (a) Deletes language providing Subsection (b) as
an exception to prohibiting a tank from being installed,
repaired, or removed by an tank contractor. Makes a
conforming change.
(b) Deletes existing Subsection (b) providing that licenses
issued to installers or on-site supervisors authorizing that
person to engage in tank business (license) under this Act
are not transferrable. Redesignates existing Subsection (c)
to make a conforming and nonsubstantive change.
Sec. 26.454. POWERS AND DUTIES OF COMMISSION. Redesignates
existing Section 4. (a) Makes a conforming change.
(b) and (c) Make no change.
Sec. 26.455. EXAMINATION. Redesignates existing Section 5.
(a)-(d) Make no change.
Sec. 26.456. LICENSE. Redesignates existing Section 6. (a)
Makes a nonsubstantive change.
(b) Makes a conforming change.
Sec. 26.457. LICENSE RENEWAL. Redesignates existing Section
7. (a) and (b) Make no change.
Sec. 26.458. FEES. Redesignates existing Section 8. (a)
Requires fees collected by the commission to defray the costs
of administering this subchapter, rather than provisions of
this Act, to be deposited in the state treasury to the credit
of the storage tank account, instead of the underground
storage tank fund. Makes a conforming change.
(b) Makes a nonsubstantive change.
Sec. 26.459. DENIAL, SUSPENSION, OR REVOCATION OF LICENSE OR
CERTIFICATE OF REGISTRATION; REINSTATEMENT. Redesignates
existing Section 9. (a) and (b) Make no change.
(c) Makes conforming changes.
(d) Authorizes a person or business entity whose license or
certificate of registration has been revoked to apply for a
new license or certificate of registration after the passage
of one year after the date of the revocation.
Sec. 26.460. New heading: CRIMINAL, CIVIL, AND
ADMINISTRATIVE PENALTIES. Deletes existing Section 10
establishing the Petroleum Advisory Committee. Redesignates
existing Section 11. (a) Provides that a person or business
entity commits an offense if the person or business entity
engages in certain acts.
(b) Provides that a person commits an offense if the person
performs or supervises the installation, repair, or removal
of a tank unless the person has a license or another person
who holds a license is substantially responsible for the
performance or supervision of the installation, repair, or
removal.
(c) Provides that a person or business entity commits an
offense if the person or business entity authorizes certain
installations, repairs, or removal of a tank.
(d) Provides that the person or business entity commits an
offense if the conduct of the person or business entity
makes the person or business entity responsible for a
violation of this subchapter or of a rule adopted or an
order issued under this subchapter. Deletes language
regarding conduct resulting in the commission of an offense.
(e) Provides that an offense under this section, rather than
Subsection (a), is a Class A misdemeanor. Redesignates
existing Subsection (b).
(f) Authorizes a person or business entity who commits an
offense under this section to be assessed a civil penalty by
the commission in an amount not to exceed $2,500 for each
day of violation. Redesignates existing Subsection (c).
(g) Subjects a person or business entity who commits an
offense under this section or who violates Subchapter I or
a rule adopted or order issued under Subchapter I to an
administrative penalty in addition to the criminal and civil
penalties. Deletes existing Subsection (d) authorizing an
owner to be assessed a penalty for not complying with the
requirements of Section 3 or a rule adopted by the
commission to implement this Act. Deletes existing Section
12 regarding initial appointments to the committee. Deletes
existing Section 13 regarding the effective date for the
license requirement.
SECTION 16. Amends Section 403.092(c), Government Code, as added
by Section 1, Chapter 533, Acts of the 73rd Legislature, 1993, as
follows:
(c)(1) Authorizes the comptroller to transfer cash from the
general revenue fund to the fund during the 1996-1997 biennium
to pay reimbursement claims against the fund that are filed
with the commission on or before August 31, 1995. Requires
the transfer to be on September 1, 1995.
(2) Requires $80 million of the fees collected under Section
26.3574, Water Code, to be deposited to the general revenue
fund by August 31, 1996. Requires $40 million of those fees
to be deposited to the credit of the fund by May 31, 1997.
Requires the remaining fees collected in excess of the
amounts required by this subdivision to be deposited to the
credit of the general revenue fund to be deposited to the
fund. Deletes language regarding the deposit of the fees
collected.
(3) Makes no change.
(4) Provides that this subsection expires on the latter of
August 31, 1997, or the date of full repayment to the
general revenue fund of the amount required under
Subdivision (2).
SECTION 17. Makes application of this Act prospective.
SECTION 18. Effective date: September 1, 1995.
SECTION 19. Emergency clause.