Bill Summary – FastDemocracy

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68th Legislature 2023                                                                                            SB 334.1
                                                 SENATE BILL NO. 334
                                              INTRODUCED BY J. ESP
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  A BILL FOR AN ACT ENTITLED: “AN ACT PROVIDING DEFINITIONS TO CLARIFY IMPLEMENTATION OF
  THE PETROLEUM STORAGE TANK CLEANUP PROGRAM; AMENDING SECTIONS 75-11-302, 75-11-307,
  AND 75-11-309, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.”
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  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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          Section 1. Section 75-11-302, MCA, is amended to read:
          "75-11-302. Definitions. Except as provided in subsections (2), (14), and (25) (3), (15), and (28), the
  following definitions apply to this part:
          (1)      "Accidental release" means a sudden or nonsudden release, neither expected nor intended by
  the tank owner or operator, of petroleum or petroleum products from a storage tank that results in a need for
  corrective action or compensation for third-party bodily injury or property damage.
          (2)      "Actual cost" means a cost:
          (a)      associated with the preparation or implementation of a corrective action plan supported by an
  invoice, receipt, or statement by a contractor; or
          (b)      that documents compensation made to a third party for bodily injury or property damage
  caused by a release.
          (2)(3)   "Aviation gasoline" means aviation fuel as defined in 15-70-401. For the purposes of this
  chapter, aviation gasoline does not include JP-4 jet fuel sold to a federal defense fuel supply center.
          (3)(4)   "Board" means the petroleum tank release compensation board established in 2-15-2108.
          (4)(5)   "Bodily injury" means physical injury, sickness, or disease sustained by an individual, including
  death that results from the physical injury, sickness, or disease at any time.
          (5)(6)   "Claim" means a written request prepared and submitted by an owner or operator or an agent
  of the owner or operator for reimbursement of expenses caused by an accidental release from a petroleum
  storage tank.
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68th Legislature 2023                                                                                                 SB 334.1
           (6)(7)   "Corrective action" means investigation, monitoring, cleanup, restoration, abatement, removal,
  and other actions necessary to respond to a release.
           (7)(8)   "Department" means the department of environmental quality provided for in 2-15-3501.
           (8)(9)   "Distributor" means a person who is licensed to sell gasoline or special fuel, as provided in 15-
  70-402, and who:
           (a)      in the state of Montana, engages in the business of producing, refining, manufacturing, or
  compounding gasoline, aviation gasoline, special fuel, or heating oil for sale, use, or distribution;
           (b)      imports gasoline, aviation gasoline, special fuel, or heating oil for sale, use, or distribution in
  this state;
           (c)      engages in wholesale distribution of gasoline, aviation gasoline, special fuel, or heating oil in
  this state;
           (d)      is an exporter;
           (e)      is a dealer licensed as of January 1, 1969, except a dealer at an established airport; or
           (f)      either blends gasoline with ethanol or blends heating oil with waste oil.
           (9)(10) "Eligible costs" means expenses reimbursable under 75-11-307.
           (10)(11) "Export" means to transport out of the state of Montana, by means other than in the fuel
  supply tank of a motor vehicle, gasoline, aviation gasoline, special fuel, or heating oil received from a refinery or
  pipeline terminal within the state of Montana.
           (11)(12) "Exporter" means a person who transports, by means other than in the fuel supply tank of a
  motor vehicle, gasoline, aviation gasoline, special fuel, or heating oil received from a refinery or pipeline
  terminal within the state of Montana to a destination outside the state of Montana for sale, use, or consumption
  beyond the boundaries of the state of Montana.
           (12)(13) "Fee" means the petroleum storage tank cleanup fee provided for in 75-11-314.
           (13)(14) "Fund" means the petroleum tank release cleanup fund established in 75-11-313.
           (14)(15) "Gasoline" means gasoline as defined in 15-70-401. For the purposes of this chapter,
  gasoline does not include JP-4 jet fuel sold to a federal defense fuel supply center.
           (15)(16) "Heating oil" means petroleum that is No. 1, No. 2, No. 4-light, No. 4-heavy, No. 5-light, No. 5-
  heavy, and No. 6 technical grades of fuel oil; other residual fuel oils, including navy special fuel oil and bunker
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68th Legislature 2023                                                                                               SB 334.1
  C; and other fuels when used as substitutes for one of these fuel oils. Heating oil is typically used in the
  operation of heating equipment, boilers, or furnaces.
          (16)(17) "Import" means to receive into a person's possession or custody first after its arrival and
  coming to rest at a destination within the state any gasoline, aviation gasoline, special fuel, or heating oil
  shipped or transported into this state from a point of origin outside this state, other than in the fuel supply tank
  of a motor vehicle.
          (18)        "Necessary cost" means a cost associated with an action approved by the department to
  prepare or implement an approved corrective action plan.
          (17)(19) "Operator" means a person in control of or having responsibility for the daily operation of a
  petroleum storage tank.
          (18)(20) (a) "Owner" means:
          (i)         a person that holds title to, controls, or possesses an interest in a petroleum storage tank; or
          (ii)        a person that owns the property on which a petroleum storage tank from which a release
  occurred was located.
          (b)         The term does not include a person that holds an interest in a storage tank solely for financial
  security, unless through foreclosure or other related actions the holder of a security interest has taken
  possession of the tank.
          (19)(21) "Person" means an individual, firm, trust, estate, partnership, company, association, joint-
  stock company, syndicate, consortium, commercial entity, corporation, or agency of state or local government.
          (20)(22) "Petroleum" or "petroleum products" means crude oil or any fraction of crude oil that is liquid
  at standard conditions of temperature and pressure (60 degrees F and 14.7 pounds per square inch absolute)
  or motor fuel blend, such as ethanol-blended gasoline, and that is not augmented or compounded by more than
  a de minimis amount of another substance.
          (21)(23) "Petroleum storage tank" means a tank that contains or contained petroleum or petroleum
  products and that is:
          (a)         an underground storage tank as defined in 75-11-503;
          (b)         a storage tank that is situated in an underground area, such as a basement, cellar, mine, drift,
  shaft, or tunnel;
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68th Legislature 2023                                                                                                SB 334.1
           (c)       an aboveground storage tank with a capacity of less than 30,000 gallons; or
           (d)       aboveground or underground pipes associated with tanks under subsections (21)(b) and
  (21)(c) (23)(b) and (23)(c), except that pipelines regulated under the following laws are excluded:
           (i)       the Natural Gas Pipeline Safety Act of 1968, 49 U.S.C. 1671, et seq.;
           (ii)      the Hazardous Liquid Pipeline Safety Act of 1979, 49 U.S.C. 2001, et seq.; and
           (iii)     state law comparable to the provisions of law referred to in subsections (21)(d)(i) and (21)(d)(ii)
  (23)(d)(i) and (23)(d)(ii), if the facility is intrastate.
           (22)(24) "Properly designed and installed double-walled tank system" means a petroleum storage tank
  and associated product piping that is designed and constructed with rigid inner and outer walls separated by an
  interstitial space and that is capable of being monitored for leakage. The design and construction of these tank
  systems must meet any applicable standards of the department and the department of justice fire prevention
  and investigation bureau. The material used in construction must be compatible with the liquid to be stored in
  the system, and the system must be designed to prevent the release of any stored liquid.
           (23)(25) "Property damage" means:
           (a)       physical injury to tangible property, including loss of use of that property caused by the injury;
  or
           (b)       loss of use of tangible property that is not physically injured.
           (26)      "Reasonable cost" means an actual cost that:
           (a)       falls within the range of allowable costs established by the board;
           (b)       has been submitted after an approved competitive bidding process;
           (c)       has been approved by the department in writing to respond to an emergency at the site of a
  release in order to prevent more extensive damage or injury that would have occurred without such approval; or
           (d)       has been approved by the department in writing, details the number of hours needed to
  complete a task, and has been submitted with an approved hourly rate.
           (24)(27) "Release" means any spilling, leaking, emitting, discharging, escaping, leaching, or disposing
  of petroleum or petroleum products from a petroleum storage tank into ground water, surface water, surface
  soils, or subsurface soils.
           (25)(28) "Special fuel" means those combustible liquids commonly referred to as diesel fuel or another
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68th Legislature 2023                                                                                                SB 334.1
  volatile liquid of less than 46 degrees A.P.I. (American petroleum institute) gravity test, except liquid petroleum
  gas. For the purposes of this chapter, special fuel does not include diesel fuel sold to a railroad or a federal
  defense fuel supply center."
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             Section 2. Section 75-11-307, MCA, is amended to read:
             "75-11-307. Reimbursement for expenses caused by release. (1) Subject to the availability of
  money from the fund under subsection (6), an owner or operator who is eligible under 75-11-308 and who
  complies with 75-11-309 and any rules adopted to implement those sections must be reimbursed by the board
  from the fund for the following eligible costs caused by a release from a petroleum storage tank:
             (a)    corrective action costs as required by a department-approved corrective action plan, except
  that if the corrective action plan:
             (i)    addresses releases of substances other than petroleum products from an eligible petroleum
  storage tank, the board may reimburse only the costs that would have reasonably been incurred if the only
  release at the site was the release of the petroleum or petroleum products from the eligible petroleum storage
  tank; or
             (ii)   includes the establishment of a petroleum mixing zone, as defined in 75-11-503, the board may
  reimburse the cost of an easement established pursuant to 75-11-508; and
             (b)    compensation paid to third parties for bodily injury or property damage. The board may not
  reimburse for property damage until the corrective action is completed.
             (2)    An owner or operator may not be reimbursed from the fund for the following expenses:
             (a)    corrective action costs or the costs of bodily injury or property damage paid to third parties that
  are determined by the board to be ineligible for reimbursement;
             (b)    costs for bodily injury and property damage, other than corrective action costs, incurred by the
  owner or operator;
             (c)    penalties or payments for damages incurred under actions by the department, board, or
  federal, state, local, or tribal agencies or other government entities involving judicial or administrative
  enforcement activities and related negotiations;
             (d)    attorney fees and legal costs of the owner, the operator, or a third party;
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68th Legislature 2023                                                                                                   SB 334.1
          (e)      costs for the repair or replacement of a tank or piping or costs of other materials, equipment, or
  labor related to the operation, repair, or replacement of a tank or piping;
          (f)      expenses incurred before April 13, 1989, for owners or operators seeking reimbursement from
  the petroleum tank release cleanup fund and expenses incurred before May 15, 1991, for owners or operators
  seeking reimbursement from the petroleum tank release cleanup fund for a tank storing heating oil for
  consumptive use on the premises where it is stored or for a farm or residential tank with a capacity of 1,100
  gallons or less that is used for storing motor fuel for noncommercial purposes;
          (g)      expenses exceeding the maximum reimbursements provided for in subsection (4);
          (h)      costs for which an owner or operator has received reimbursement or payment from an insurer
  or other third party, including a grantor;
          (i)      expenses for work completed by or on behalf of the owner or operator more than 5 years prior
  to the owner's or operator's request for reimbursement. This limitation does not apply to claims for
  compensation paid to third parties for bodily injury or property damage. The running of the 5-year limitation
  period is suspended by an appeal of the board's denial of eligibility for reimbursement. If a written request for
  hearing is filed under 75-11-309, the suspension of the 5-year limitation period is effective from the date of the
  board's initial eligibility denial to the date on which the initial eligibility denial is overturned or reversed by the
  board, a district court, or the state supreme court, whichever occurs latest. The board may grant reasonable
  extensions of this limitation period if it is shown that the need for the extension is not due to the negligence of
  the owner or operator or agent of the owner or operator.
          (j)      costs that the board has determined are not actual, reasonable, and necessary costs of
  responding to the release and implementing the corrective action plan, as provided for in 75-11-309, including
  costs included in a department-approved corrective action plan for the purpose of remediating the release in
  excess of department standards.
          (3)      An owner or operator may designate a person, including a grantor, as an agent to receive the
  reimbursement for eligible costs incurred by the person if the owner or operator remains legally responsible for
  all costs and liabilities incurred as a result of the release.
          (4)      Subject to the availability of funds under subsection (6):
          (a)      for releases eligible for reimbursement from the fund that are discovered and reported on or
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68th Legislature 2023                                                                                               SB 334.1
  after April 13, 1989, from a tank storing heating oil for consumptive use on the premises where it is stored or
  from a farm or residential tank with a capacity of 1,100 gallons or less that is used for storing motor fuel for
  noncommercial purposes, the board shall reimburse an owner or operator for:
          (i)      100% of the eligible costs, up to a maximum total reimbursement of $500,000, for properly
  designed and installed double-walled tank system releases that were discovered and reported on or after
  October 1, 1993, and before October 1, 2009; or
          (ii)     50% of the first $10,000 of eligible costs and 100% of subsequent eligible costs, up to a
  maximum total reimbursement of $495,000 for all other releases; and
          (b)      for all other releases eligible for reimbursement from the fund that are discovered and reported
  on or after April 13, 1989, the board shall reimburse an owner or operator for:
          (i)      100% of the eligible costs, up to a maximum total reimbursement of $1 million, for properly
  designed and installed double-walled tank system releases that were discovered and reported on or after
  October 1, 1993, and before October 1, 2009; or
          (ii)     50% of the first $35,000 of eligible costs and 100% of subsequent eligible costs, up to a
  maximum total reimbursement of $982,500 for all other releases.
          (5)      If an insurer or grantor pays or reimburses an owner or operator for costs that qualify as eligible