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H.B. 150

             1     

UNDERGROUND PETROLEUM STORAGE TANK FINANCIAL

             2     
VIABILITY STUDY

             3     
2012 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Steve Eliason

             6     
Senate Sponsor: Wayne L. Niederhauser

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill requires the Department of Environmental Quality to study the financial
             11      viability of the Environmental Assurance Program and the Petroleum Storage Tank
             12      Trust Fund and modifies the maximum cash balance of the Petroleum Storage Tank
             13      Trust Fund.
             14      Highlighted Provisions:
             15          This bill:
             16          .    requires the Department of Environmental Quality to study the financial viability of
             17      the Environmental Assurance Program and the Petroleum Storage Tank Trust Fund;
             18          .    allows the executive secretary of the Department of Environmental Quality to
             19      expend money from the Petroleum Storage Tank Trust Fund to pay the cost of the
             20      financial viability study;
             21          .    modifies the maximum cash balance of the Petroleum Storage Tank Trust Fund; and
             22          .    makes technical changes.
             23      Money Appropriated in this Bill:
             24          None
             25      Other Special Clauses:
             26          None
             27      Utah Code Sections Affected:


             28      AMENDS:
             29          19-6-409, as last amended by Laws of Utah 2010, Chapter 186
             30          19-6-410.5, as last amended by Laws of Utah 2009, Chapter 212
             31     
             32      Be it enacted by the Legislature of the state of Utah:
             33          Section 1. Section 19-6-409 is amended to read:
             34           19-6-409. Petroleum Storage Tank Trust Fund created -- Source of revenues.
             35          (1) (a) There is created a private-purpose trust fund entitled the "Petroleum Storage
             36      Tank Trust Fund."
             37          (b) The sole sources of revenues for the fund are:
             38          (i) petroleum storage tank fees paid under Section 19-6-411 ;
             39          (ii) underground storage tank installation company permit fees paid under Section
             40      19-6-411 ;
             41          (iii) the environmental assurance fee and penalties paid under Section 19-6-410.5 ; and
             42          (iv) interest accrued on revenues listed in this Subsection (1)(b).
             43          (c) Interest earned on fund money is deposited into the fund.
             44          (2) The executive secretary may expend money from the fund to pay costs:
             45          (a) covered by the fund under Section 19-6-419 ;
             46          (b) of administering the:
             47          (i) fund; and
             48          (ii) environmental assurance program and fee under Section 19-6-410.5 ;
             49          (c) incurred by the state for a legal service or claim adjusting service provided in
             50      connection with a claim, judgment, award, or settlement for bodily injury or property damage
             51      to a third party;
             52          (d) incurred by the state risk manager in determining the actuarial soundness of the
             53      fund;
             54          (e) incurred by a third party claiming injury or damages from a release reported on or
             55      after May 11, 2010, for hiring a certified underground storage tank consultant:
             56          (i) to review an investigation or corrective action by a responsible party; and
             57          (ii) in accordance with Subsection (4); [and]
             58          (f) incurred by the department in completing the study described in Subsection


             59      19-6-410.5 (8); and
             60          [(f)] (g) allowed under this part that are not listed under this Subsection (2).
             61          (3) Costs for the administration of the fund and the environmental assurance fee shall
             62      be appropriated by the Legislature.
             63          (4) The executive secretary shall:
             64          (a) in paying costs under Subsection (2)(e):
             65          (i) determine a reasonable limit on costs paid based on the:
             66          (A) extent of the release;
             67          (B) impact of the release; and
             68          (C) services provided by the certified underground storage tank consultant;
             69          (ii) pay, per release, costs for one certified underground storage tank consultant agreed
             70      to by all third parties claiming damages or injury;
             71          (iii) include costs paid in the coverage limits allowed under Section 19-6-419 ; and
             72          (iv) not pay legal costs of third parties;
             73          (b) review and give careful consideration to reports and recommendations provided by
             74      a certified underground storage tank consultant hired by a third party; and
             75          (c) make reports and recommendations provided under Subsection (4)(b) available on
             76      the Division of Environmental Response and Remediation's website.
             77          Section 2. Section 19-6-410.5 is amended to read:
             78           19-6-410.5. Environmental assurance program -- Participant fee -- State Tax
             79      Commission administration, collection, and enforcement of tax.
             80          (1) As used in this section:
             81          (a) "Cash balance" means cash plus investments and current accounts receivable minus
             82      current accounts payable, excluding the liabilities estimated by the state risk manager.
             83          (b) "Commission" means the State Tax Commission, as defined in Section 59-1-101 .
             84          (2) (a) There is created an Environmental Assurance Program.
             85          (b) The program shall provide to a participating owner or operator, upon payment of
             86      the fee imposed under Subsection (4), assistance with satisfying the financial responsibility
             87      requirements of 40 C.F.R., Part 280, Subpart H, by providing funds from the Petroleum
             88      Storage Tank Trust Fund established in Section 19-6-409 , subject to the terms and conditions
             89      of Chapter 6, Part 4, Underground Storage Tank Act, and rules implemented under that part.


             90          (3) (a) Subject to Subsection (3)(b), participation in the program is voluntary.
             91          (b) An owner or operator seeking to satisfy financial responsibility requirements
             92      through the program shall use the program for all petroleum underground storage tanks that the
             93      owner or operator owns or operates.
             94          (4) (a) There is assessed an environmental assurance fee of 1/2 cent per gallon on the
             95      first sale or use of petroleum products in the state.
             96          (b) The environmental assurance fee and any other revenue collected under this section
             97      shall be deposited in the Petroleum Storage Tank Trust Fund created in Section 19-6-409 and
             98      used solely for the purposes listed in Section 19-6-409 .
             99          (5) (a) The commission shall administer, collect, and enforce the fee imposed under
             100      this section according to the same procedures used in the administration, collection, and
             101      enforcement of the state sales and use tax under:
             102          (i) Title 59, Chapter 1, General Taxation Policies; and
             103          (ii) Title 59, Chapter 12, Part 1, Tax Collection.
             104          (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             105      commission shall make rules to establish:
             106          (i) the method of payment of the environmental assurance fee;
             107          (ii) the procedure for reimbursement or exemption of an owner or operator that does
             108      not participate in the program, including an owner or operator of an above ground storage tank;
             109      and
             110          (iii) the procedure for confirming with the department that an owner or operator
             111      qualifies for reimbursement or exemption under Subsection (5)(b)(ii).
             112          (c) The commission may retain an amount not to exceed 2.5% of fees collected under
             113      this section for the cost to the commission of rendering its services.
             114          (6) (a) The person responsible for payment of the fee under this section shall, by the
             115      last day of the month following the month in which the sale occurs:
             116          (i) complete and submit the form prescribed by the commission; and
             117          (ii) pay the fee to the commission.
             118          (b) (i) The penalties and interest for failure to file the form or to pay the environmental
             119      assurance fee are the same as the penalties and interest under Sections 59-1-401 and 59-1-402 .
             120          (ii) The commission shall deposit penalties and interest collected under this section in


             121      the Petroleum Storage Tank Trust Fund.
             122          (c) The commission shall report to the department a person who is delinquent in
             123      payment of the fee under this section.
             124          (7) (a) (i) If the cash balance of the Petroleum Storage Tank Trust Fund on June 30 of
             125      any year exceeds [$20,000,000] $30,000,000, the assessment of the environmental assurance
             126      fee as provided in Subsection (4) is reduced to 1/4 cent per gallon beginning November 1.
             127          (ii) The reduction under this Subsection (7)(a) remains in effect until modified by the
             128      Legislature in a general or special session.
             129          (b) The commission shall determine the cash balance of the fund each year as of June
             130      30.
             131          (c) Before September 1 of each year, the department shall provide the commission with
             132      the accounts payable of the fund as of June 30.
             133          (8) The department shall:
             134          (a) study the impact of adverse selection on participants in the program and prepare a
             135      recommendation on how to remedy that impact;
             136          (b) develop a risk characterization profile for participants in the program and create a
             137      fee schedule based on fair market rates;
             138          (c) develop a strategy to reduce the negative equity balance of the fund and, based on
             139      the fee schedule described in Subsection (8)(b), a corresponding time schedule showing an
             140      actuarial reduction in the negative equity balance of the fund; and
             141          (d) identify and study other adverse impacts to the program and the fund.
             142          (9) The department shall report the results of the study described in Subsection (8) to
             143      the Natural Resources, Agriculture, and Environment Interim Committee before November 30,
             144      2012.




Legislative Review Note
    as of 2-13-12 2:16 PM


Office of Legislative Research and General Counsel


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