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NO. 132. AN ACT RELATING TO UNDERGROUND STORAGE TANK CLOSURE AND EXTENDING THE PETROLEUM DISTRIBUTOR LICENSING FEE AND THE PETROLEUM TANK ASSESSMENT.

(H.580)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. 10 V.S.A. chapter 59 is redesignated to read:

CHAPTER 59. UNDERGROUND AND ABOVEGROUND

LIQUID STORAGE TANKS

Sec. 2. 10 V.S.A. § 1921 is amended to read:

§ 1921. PURPOSE

The ground and surface waters of the state are an essential and significant portion of the natural resources of the state historically protected by state programs. Significant contamination of these natural resources and hazard to the public health results from the failure of aboveground storage tanks and underground facilities for the storage and handling of petroleum liquids, related sludges and other chemicals. It is the purpose of this chapter to prevent ground and surface water contamination from these facilities by authorizing the establishment of state standards and criteria for the design, installation, operation, maintenance, and monitoring of underground liquid storage facilities. It is the intent of this chapter to provide authority to the secretary to enable the secretary to operate a program consistent with or more stringent than that contained in Title VI of the Hazardous and Solid Waste Amendments of 1984.

Sec. 3. 10 V.S.A. § 1922 is amended to read:

§ 1922. DEFINITIONS

For purposes of this chapter:

(1) "Aboveground storage tank" means any tank, other than an underground storage tank, used to store any of the following petroleum products: gasoline, diesel, kerosene, used oil, or heating oil;

(2) "Agency" means the agency of natural resources;

(3) "Operator" means any person in control of, or having responsibility for, the daily operation of the underground or aboveground storage tank;

(4) "Owner" means:

(A) in the case of any underground storage tank in use on July 1, 1985 or brought into use after that date, any person who owns an underground storage tank used for storage or dispensing of regulated substances;

(B) in the case of any underground storage tank in use before July 1, 1985 and no longer in use on that date, any person who owned such tank immediately before the discontinuance of its use;

(C) any person who owns an aboveground storage tank;

* * *

(7) "Release" means any spilling, leaking, emitting, discharging, escaping, leaching or disposing from an underground storage tank or aboveground storage tank into groundwater, surface water or *[subsurface]* soils;

* * *

Sec. 4. 10 V.S.A. § 1923(c) is amended to read:

(c) Tanks no longer in service. *[Before April 1, 1986, any]* Any person who knowingly owned or used an underground storage tank after January 1, 1974, and who does not have knowledge that the tank has been *[removed from the ground]* closed in accordance with tank closure requirements prescribed by the rules, shall *[notify]* make a one-time notification to the secretary *[of]* regarding the existence of that tank. No person is required under this section to report a tank that has been reported under subsection (b) of this section.

Sec. 5. 10 V.S.A. § 1926 is amended to read:

§ 1926. UNUSED AND ABANDONED TANKS

(a) *[The owner of an]* Any underground storage tank that does not meet new construction standards as prescribed by the rules, and which has not been used for a period of one year shall *[remove the tank or follow]* be closed in accordance with tank closure *[procedures]* requirements prescribed by the *[secretary]* rules.

(b) *[Responsibility]* The responsibility for the *[removal or]* closure of an underground storage tank shall rest with:

(1) the person who owned the tank immediately before its use was discontinued;and

(2) any subsequent purchaser of the tank or the property on which the tank is located, if the purchaser knew or had reason to know of the existence of the tank prior to the purchase.

(c) The person identified in subdivision (b)(2) of this section shall have the primary responsibility for closure, except that a secured lender who acquires record title to the property on which the tank is located, through or incident to foreclosure, shall not have responsibility under this section, provided that the secured lender discloses in writing the presence of the unused underground tank or tanks to the subsequent buyer, and, within 30 days of the date the secured lender becomes record title holder of the property, the secured lender takes all of the following actions:

(1) the contents of the tank or tanks are removed such that less than one inch or 0.3 percent by weight of the tank's capacity remains in the tank;

(2) all fill pipes, gauge openings, manways, and other openings are secured to prevent infiltration from rainwater, surface runoff, and accidental deliveries; and

(3) the vent line is left open and functioning and is secured to prevent infiltration from rainwater and debris.

(d) If the *[state is unable to compel the owner to remove or close the tank, or if that owner is]* persons described in subdivisions (b)(1) and (2) of this section are unknown or cannot be contacted, or if the person owning the land on which the tank is located does not allow access to the tank, the person owning the land on which the tank is located, upon *[order]* direction of the secretary, shall *[remove or]* close the tank. If the following conditions are met, the secretary shall draw upon the petroleum cleanup fund established by 10 V.S.A. § 1941 in order to reimburse the person owning the land for the reasonable costs of that action and the secretary shall not seek repayment *[of]* to the fund from the person owning the land:

(1) the person owning the land can establish that after making a diligent and appropriate investigation he or she had no knowledge or reason to know of the existence of an underground storage tank, and

(2) the person owning the land has given all reasonable assistance in the *[removal or]* closing of the tank, and

(3) the person owning the land is directed in writing by the secretary to *[remove or]* close the tank, and does so.

Sec. 6. 10 V.S.A. § 1927(b) is amended and (d) is added to read:

(b) A permit for an underground storage tank shall specify:

* * *

(9) requirements for tank *[removal, or performance of tank closure procedures]* closure as prescribed by the rules;

(10) requirements for the upgrade or *[removal]* closure of tanks by *[June 30]* December 22, 1998 that do not meet standards adopted to prevent releases due to corrosion, and spills or overfills;

(11) other requirements necessary to carry out the purposes indicated in

section 1921 of this title.

(d) After December 22, 1998, no person shall deliver a regulated substance to a category one tank which is not visibly designated on the premises in a manner prescribed by the agency as meeting standards adopted to prevent releases due to corrosion, spills, or overfills.

Sec. 7. 10 V.S.A. § 1928 is amended to read:

§ 1928. REGULATION OF *[LARGE]* FARM AND RESIDENTIAL LARGE MOTOR FUEL TANKS

The secretary shall establish rules for the new installation of or reentry into service of farm and residential underground storage tanks of greater than 1100 gallons which are or have been used for storing motor fuel for non-commercial purposes. These rules shall establish registration requirements and requirements which address tank condition,

composition, size, type, compatibility and method of installation. No person shall install or reenter into service such a tank after the effective date of these rules without complying with these rules. The secretary also shall adopt rules which establish requirements for any monitoring or leak detection system or inventory control system or tank testing systemdeemed appropriate and maintaining records thereof. The rules also shall establish requirements for reporting of any releases and taking corrective action, requirements for tank closure and evidence of financial responsibility and requirements for the upgrade or *[removal]* closure of tanks by *[June 30]* December 22, 1998 that do not meet standards adopted to prevent releases due to corrosion, and spills or overfills. These rules for new and existing tanks shall take into account the unique schedule of home and farm use. Inventory control measures shall be appropriate to these uses. After December 22, 1998, no person shall deliver a regulated substance to a farm or residential tank regulated under this section, if that tank is not visibly designated on the premises in a manner prescribed by the agency as meeting standards adopted to prevent releases due to corrosion, spills, or overfills.

Sec. 8. 10 V.S.A. § 1941 is amended to read:

§ 1941. PETROLEUM CLEANUP FUND

* * *

(b) The secretary may authorize disbursements from the fund for the purpose of the cleanup and restoration of contaminated soil and groundwater caused by releases of petroleum from underground storage tanks and aboveground storage tanks, including air emissions for remedial actions, and for compensation of third parties for injury and damage caused by a release. Disbursements under this section may be made only for uninsured costs incurred after January 1, 1987 and for which a claim is made prior to

July 1, *[1999]* 2004 and judged to be in conformance with prevailing industry rates. This includes:

(1) costs incurred by taking corrective action as directed by the secretary for any release of petroleum into the environment from *[a]*:

(A) an underground storage tank site after the first $10,000.00 of costs have been borne by the owners or permittee. Disbursements on any site shall not exceed $990,000.00;

(B) an aboveground storage tank site after the first $1,000.00 of the cleanup costs have been borne by the owners or operators of tanks used for commercial purposes,or after the first $250.00 of the cleanup costs have been borne by the owners or operators of residential and farm tanks. Disbursements under this subdivision (b)(1)(B) on any individual site shall not exceed $25,000.00;

(2) costs incurred in compensating third parties for bodily injury and property damage, as approved by the secretary in consultation with the commissioner of banking, insurance, securities, and health care administration caused by release of petroleum into the environment from a site, up to one million dollars, but shall not include payment of any punitive damages;

(3) costs incurred in taking immediate corrective action to contain or mitigate the effects of any release of petroleum into the environment from an underground storage tank or aboveground storage tank if, in the judgment of the secretary, such action is necessary to protect the public health and the environment. The secretary may seek reimbursement of the first $10,000.00 of the costs;

(4) the cost of corrective action up to $1 million for any release of petroleum into the environment from *[a]* an underground storage tank or tanks:

(A) whose owner, in the judgment of the secretary, is incapable of carrying out the corrective action; or

(B) whose owner or operator cannot be determined; or

(C) *[whose owner is not required to provide evidence of financial responsibility, except that the provisions of subdivision (b)(1) of this section are applicable to any nonfarm, nonresidential fuel oil tank greater than 1,100 gallons capacity that is used for on-premises heating purposes; or]*

(D) whose owner, in the judgment of the secretary, is financially incapable of carrying out the corrective action in a timely manner;

(5) notwithstanding the provisions of subdivision (b)(1) of this section, costs incurred by taking corrective action as directed by the secretary for any release of petroleum into the environment after the first $250.00 of costs have been borne by the owners or permittee for the following underground storage tanks:

(A) any size farm or residential fuel oil storage tank used for on-premisesheating;

(B) all farm or residential motor fuel tanks with capacities of equal to or less than 1,100 gallons;

(C) all nonfarm and nonresidential fuel oil storage tanks used for on-premises heating with capacities of equal to or less than 1,100 gallons;

(6) the costs of creating and operating a risk retention pool authorized by section 1939 of this title, which costs are in excess of a reasonable contribution by participants, as determined by the secretary with the advice of the commissioner of banking, insurance, securities, and health care administration. The authority for disbursements under this subdivision shall terminate on June 1, 1992;

(c) The secretary may use up to one-half the amount deposited to the fund from the licensing fees assessed under section 1942 of this title to capitalize the underground storage tank loan assistance program established by section 1944 of this title and the cost of administering the program. If the secretary determines that a balance will remain after all qualifying loan applications have been satisfied, the unneeded balance may be used for cleanup. The secretary may use up to $250,000.00 per year for purposes of funding measures related to aboveground storage tanks.

* * *

(e) The secretary shall establish a petroleum cleanup fund advisory committee which shall meet not less than annually to review receipts and disbursements from the fund, to evaluate the effectiveness of the fund in meeting its purposes, the reasonableness of the cost of cleanup and to recommend alterations and statutory amendments deemedappropriate. The advisory committee shall submit an annual report of its findings to the general assembly on January 15 of each year. In its report for 2000, the advisory committee shall evaluate the implementation of assistance related to underground farm or residential fuel oil storage tanks and aboveground storage tanks, and the need for continuing assistance, and shall include recommendations for sustainable funding sources to finance the provision of that assistance. The membership of the committee shall include the following or their designated representative:

(1) the secretary of the agency of natural resources who shall be chairperson;

(2) the commissioner of the department of environmental conservation;

(3) the commissioner of banking, insurance, securities, and health care administration;

(4) a licensed gasoline distributor;

(5) a retail gasoline dealer;

(6) a representative of a statewide refining-marketing petroleum association;

(7) one member of the house to be appointed by the speaker of the house;

(8) one member of the senate to be appointed by the committee on committees.

* * *

(g) The owner of a farm or residential underground fuel oil storage tank used for on-premises heating that desires assistance to close, replace or upgrade the tank may apply to the secretary for such assistance. The financial assistance may be in the form of grants or loans of up to $500.00 or the costs of closure, replacement or upgrade, whichever is less. Grants or loans shall be made only to property owners who can establish that the owner or owners of record of the property in question, during the preceding tax year, had a cumulative federal adjusted gross income of $50,000.00 or less. Grants or loans shall be awarded on a priority basis to projects that will avoid the greatest environmental or health risks. The secretary shall only authorize up to $50,000.00 in assistance grants or loans in any one fiscal year. The application must be accompanied by the following information:

(1) proof of ownership, including information disclosing all owners of record of the property;

(2) an affidavit that the adjusted gross income of the owner, or the combined adjusted gross income of all owners, if more than one, is $50,000.00 or less. Any owner or owners who have not provided accurate information shall be liable for a civil penalty not to exceed $10,000.00, which shall be deposited into the petroleum cleanup fund;

(3) an estimated cost of tank closure, replacement or upgrade;

(4) the amount and type of assistance requested;

(5) a schedule for the work;

(6) description of surrounding area, including location of water supply wells, surface waters and other sensitive receptors; and

(7) such other information and assurances as the secretary may require.

Sec. 9. 10 V.S.A. § 1942 is amended to read:

§ 1942. PETROLEUM DISTRIBUTOR LICENSING FEE

There is hereby established a licensing fee of one cent per gallon of motor fuel sold by a distributor or dealer or used by a user in this state, which will be assessed against every distributor, dealer or user as defined in 23 V.S.A. chapters 27 and 28, and which will be deposited into the petroleum cleanup fund. This fee will be paid in the same manner, at the same time, and subject to the same restrictions or limitations as the tax on motor fuels. The fee will be collected by the commissioner of motor vehicles and deposited into the petroleum cleanup fund. This fee requirement shall terminate on April 1, *[2001]* 2006.

Sec. 10. 10 V.S.A. § 1943(c) is amended to read:

(c) This tank assessment shall terminate on July 1, *[1999]* 2004.

Sec. 11. 10 V.S.A. § 6615b is added to read:

§ 6615b. CORRECTIVE ACTION PROCEDURES

Any person who is determined to be liable for the release or threatened release of a hazardous material as established in section 6615 of this title shall take all of the following actions to mitigate the effects of the release:

(1) Submit for approval by the secretary a work plan for an investigation of the contaminated site. This shall be submitted within thirty (30) days from either the date of the discharge or release or the date that the release was discovered if the date of thedischarge or release is not known, or within a period of time established by an alternative schedule approved by the secretary. The site investigation shall define the nature, degree and extent of the contamination, and shall assess potential impacts on human health and the environment;

(2) Perform the site investigation within ninety (90) days of receiving written approval of the work plan by the secretary, or within a period of time established by an alternative schedule approved by the secretary. A report detailing the findings of this work shall be sent to the secretary for review;

(3) Submit a corrective action plan, within thirty (30) days from the date of final acceptance of the site investigation report by the secretary, or within a period of time established by an alternative schedule approved by the secretary;

(4) Implement the corrective action plan within ninety (90) days upon approval of the plan by the secretary, or within a period of time established by an alternative schedule approved by the secretary. The corrective action activity shall be continued until the contamination is remediated to levels approved by the secretary. The secretary may allow for the remediation of a site contaminated with a hazardous material without requiring certification and permitting under sections 556, 6605 and 6606 of this title, provided such activity will not, in the secretary's opinion, adversely affect either public health and safety or the environment, and provided such activity is conducted in accordance with standards developed by the secretary; and

(5) Submit to the secretary all investigative, corrective action and monitoring reports, including all analytical results related to subdivisions (3)-(5) of this subsection, as they become available.

Sec. 12. EFFECTIVE DATE

This act shall take effect on passage.

Approved: April 23, 1998