BILL ANALYSIS H.B. 3032 By: Alexander 4-18-95 Committee Report (Unamended) BACKGROUND The Environmental Protection Agency (EPA) has encouraged the use of risk-based decision making as a integral part of the corrective action process at leaking underground storage tank (UST) sites where tanks have been leaking and thus created risks to human health and the environment. The Texas Natural Resource Conservation Commission (TNRCC) has developed a standard for risk-based decision making with concern to UST corrective action that is consistent with Federal law and EPA regulations. This standard, "Risk-Based Corrective Action" (RBCA), provides a detailed and technical framework that establishes goals for cleanup of UST releases based on consideration of site specific factors that could lead to human and environmental exposure to contamination. Using RBCA, UST releases would be a higher priority for cleanup if it impacts ground water being used as public or private drinking water sources (as opposed to a release that does not impact any water source and is in a soil substance that is not likely to migrate and create a human health hazard or environmental risk). PURPOSE To require the TNRCC to use "Risk Based Corrective Action" as the method for determining the type and amount of remediation that must be conducted by a tank owner at a specific tank site based on actual and potential health and environmental risk for that specific site. This method will save the state Petroleum Storage Tank Remediation Fund an estimated $300 million for sites already reported as contaminated. This bill gives authority to the TNRCC to require tank owners who have not complied with state and federal tank upgrade requirements to place the non-complying facility "out of service" if compliance is not achieved within thirty days after notification of the violation is made by the Commission. This restriction is necessary to preserve fair competition in the marketplace so as to prevent a tank owner that has not complied with state and federal tank upgrade requirements from having an unfair competitive advantage over a tank owner that has expended capital to comply. Finally, this bill cleans up the limits of liability of lenders in order to encourage lending of capital to small businesses that must upgrade and remediate tank facilities. The bill also requires the commission to adopt rules for the issuance of a closure letter to the owner or operator of a tank site that has met the commission's requirements on remediation. These rules are intended to satisfy lenders who are reluctant to lend capital to tank owners for a facility that may have had a substantial liability before the cleanup is completed. RULEMAKING AUTHORITY It is the committee's opinion that this bill expressly grants additional rulemaking authority to the Texas Natural Resource Conservation Commission at both (1) Section 5 of the bill (in amended Section 26.3572(b), Water Code) and (2) Section 6 of the bill (in amended Section 26.35735(e), Water Code). SECTION BY SECTION ANALYSIS SECTION 1: Amends Section 26.341(b), Water Code to include the use of risk-based corrective actions as a required method for the implementation of the policy to protect the quality of groundwater and surface water resources. SECTION 2: Amends Section 26.342, Water Code, by adding a new subdivision (13) which defines "risk-based corrective action," and renumbers subsequent subdivisions. SECTION 3: Amends Subchapter I, Chapter 26, Water Code by adding Section 26.3475, requiring compliance for tank upgrades including Release Detection and Spill and Overfill Prevention which are already required under Federal law. Corrosion protection will be required by December 22, 1998. This section gives the Commission authority to shut down any tank facility that has not complied with these upgrade requirements within 30 days of receiving a notice of violation from the Commission. SECTION 4: Amends Section 26.3514, Water Code, by adding Subsections (f), (g), (h), and (i) as follows: (f)identifies that a lender is not liable as an owner or operator for foreclosed property containing petroleum storage tanks unless the lender was involved in the management of the property before the foreclosure. (g)identifies that a lender may keep a foreclosed property intact to protect a security interest if within 12 months of the foreclosure the lender lists the property with a broker or advertises the property monthly. (h)defines the 12 month period described in Subsection (g) when the lender acquires title. (i)provides for the conditions where a lender may reject an offer for purpose of a foreclosed property containing petroleum storage tanks. SECTION 5: Amends Section 26.3572(b), Water Code to require the Commission to use risk-based corrective action in negotiations with responsible parties about site assessment and remediation matters. The commission shall establish rules for determining cleanup levels using risk-based corrective action. The commission shall adopt by rule risk-based site closures and develop a closure letter to the owner or operator of a tank site on completion of the commission's requirement for remediation. SECTION 6: Amends Section 26.35735, Water Code by adding new Subsections (e) and (f) as follows: (e)allows the commission to audit claims under guidelines established by commission rules and deny claims as a result of that audit using only rules in effect when the audit was conducted. This subsection also allows the commission to audit claims suspected of fraud. (f)requires the commission to notify the person whose claim for payment is the subject of the audit no later than 90- days after the audit is conducted. SECTION 7: Effective Date. SECTION 8: Emergency Clause. SUMMARY OF COMMITTEE ACTION H.B.3032 was considered by the committee in a public hearing on April 18, 1995. No testimony was received. The bill was reported favorably without amendment, with the recommendation that it do pass and be printed, by a record vote of 6 ayes, 0 nays, 0 pnv, 3 absent.