Bill Text: MI SB1081 | 2013-2014 | 97th Legislature | Introduced

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Bill Title: Environmental protection; underground storage tanks; imposition of environmental protection regulatory fees; clarify. Amends secs. 21502, 21503, 21508 & 21509 of 1994 PA 451 (MCL 324.21502 et seq.).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2014-09-24 - Reassigned To Committee On Finance [SB1081 Detail]

Download: Michigan-2013-SB1081-Introduced.html

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SENATE BILL No. 1081

 

 

September 23, 2014, Introduced by Senator ROBERTSON and referred to the Committee on Natural Resources, Environment and Great Lakes.

 

 

 

     A bill to amend 1994 PA 451, entitled

 

"Natural resources and environmental protection act,"

 

by amending sections 21502, 21503, 21508, and 21509 (MCL 324.21502,

 

324.21503, 324.21508, and 324.21509), sections 21502 and 21503 as

 

amended by 2012 PA 113 and section 21508 as amended by 2004 PA 390.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 21502. As used in this part:

 

     (a) "Administrator" means the fund administrator provided for

 

in section 21513.

 

     (b) "Approved claim" means a claim that is approved pursuant

 

to section 21515.

 

     (c) "Authority" means the Michigan underground storage tank

 

financial assurance authority created in section 21523.

 

     (d) "Board of directors" means the board of directors of the

 

authority.

 

     (e) "Bond proceeds account" means the account or fund to which

 

proceeds of bonds or notes issued under this part have been

 

credited.

 

     (f) "Bonds or notes" means the bonds, notes, commercial paper,

 

other obligations of indebtedness, or any combination of these,

 

issued by the authority pursuant to this part.

 

     (g) "Bulk plant" means a refined petroleum storage and

 

distribution facility that is not a terminal and from which refined

 

petroleum may be withdrawn by a tank wagon, a transport truck, or a

 

marine vessel.

 

     (h) "Bulk transfer" means a transfer of refined petroleum from

 

1 location to another by pipeline tender or marine delivery within

 

the bulk transfer/terminal system, including, but not limited to,

 

all of the following transfers:

 

     (i) A marine vessel movement of refined petroleum from a

 

refinery or terminal to a terminal.

 

     (ii) Pipeline movements of refined petroleum from a refinery or

 

terminal to a terminal.

 

     (iii) Book transfers of refined petroleum within a terminal

 

between licensed suppliers before completion of removal across the

 

terminal rack.

 

     (iv) Two-party exchanges between licensed suppliers.

 

     (i) "Bulk transfer/terminal system" means the refined

 

petroleum distribution system consisting of refineries, pipelines,

 

terminals, and marine vessels. Refined petroleum in a refinery,

 

pipeline, terminal, or marine vessel transporting refined petroleum

 

to a refinery or terminal is in the bulk transfer/terminal system.

 

Refined petroleum in a fuel storage facility, including, but not

 

limited to, a bulk plant that is not part of a refinery or

 

terminal, in the fuel supply tank of any engine or motor vehicle,

 

in a marine vessel transporting refined petroleum to a fuel storage

 

facility that is not in the bulk transfer/terminal system, or in

 

any tank car, rail car, trailer, truck, or other equipment suitable

 

for ground transportation is not in the bulk transfer/terminal

 

system.

 

     (j) (g) "Claim" means the submission by the owner or operator

 

or his or her representative of documentation on an application

 

requesting payment from the fund. A claim shall include, at a

 

minimum, a completed and signed claim form and the name, address,

 

telephone number, and federal tax identification number of the

 

owner or operator.

 

     (k) (h) "Class 1 site" means a site posing the highest degree

 

of threat to the public and environment as determined by the

 

department, based on the classification system developed by the

 

department pursuant to section 21314a.

 

     (l) (i) "Class 2 site" means a site posing the second highest

 

degree of threat to the public and environment as determined by the

 

department, based on the classification system developed by the

 

department pursuant to section 21314a.

 

     (m) (j) "Co-pay amount" means the co-pay amount provided for

 

in section 21514.

 

     (n) (k) "Corrective action" means the investigation,

 

assessment, cleanup, removal, containment, isolation, treatment, or

 

monitoring of regulated substances released into the environment or

 

the taking of such other actions as may be necessary to prevent,

 

minimize, or mitigate injury to the public health, safety, or

 

welfare, the environment, or natural resources.

 

     (o) (l) "Department" means the department of environmental

 

quality.

 

     (p) (m) "Eligible person" means an owner or operator who meets

 

the eligibility requirements in section 21556 or 21557 and received

 

approval of his or her precertification application by the

 

department.

 

     (q) "Excluded liquid" means that term as defined in 26 CFR

 

48.4081-1.

 

     (r) "Export" means to obtain refined petroleum in this state

 

for sale or other distribution outside of this state. Refined

 

petroleum delivered outside of this state by or for the seller

 

constitutes an export by the seller, and refined petroleum

 

delivered outside of this state by or for the purchaser constitutes

 

an export by the purchaser.

 

     (s) "Exporter" means a person who exports refined petroleum.

 

     (t) (n) "Financial responsibility requirements" means the

 

financial responsibility for taking corrective action and for

 

compensating third parties for bodily injury and property damage

 

caused by a release from an underground storage tank system that

 

the owner or operator of an underground storage tank system must

 

demonstrate under part 211 and the rules promulgated under that

 

part.

 

     (u) (o) "Fund" means the Michigan underground storage tank

 

financial assurance fund created in section 21506.

 

     (v) (p) "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 C; and other fuels when used as

 

substitutes for 1 of these fuel oils.

 

     (w) (q) "Indemnification" means indemnification of an owner or

 

operator for a legally enforceable judgment entered against the

 

owner or operator by a third party, or a legally enforceable

 

settlement entered between the owner or operator and a third party,

 

compensating that third party for bodily injury or property damage,

 

or both, caused by an accidental release as those terms are defined

 

in R 29.2163 of the Michigan administrative code.

 

     (x) (r) "Location" means a facility or parcel of property

 

where petroleum underground storage tank systems are registered

 

pursuant to part 211.

 

     (y) (s) "Operator" means a person who was, at the time of

 

discovery of a release, in control of or responsible for the

 

operation of a petroleum underground storage tank system or a

 

person to whom an approved claim has been assigned or transferred.

 

     (z) (t) "Owner" means a person, other than a regulated

 

financial institution, who, at the time of discovery of a release,

 

held a legal, equitable, or possessory interest of any kind in an

 

underground storage tank system or in the property on which an

 

underground storage tank system is located, including, but not

 

limited to, a trust, vendor, vendee, lessor, or lessee. Owner

 

includes a person to whom an approved claim is assigned or

 

transferred. Owner does not include a person or a regulated

 

financial institution who, without participating in the management

 

of an underground storage tank system and without being otherwise

 

engaged in petroleum production, refining, or marketing relating to

 

the underground storage tank system, is acting in a fiduciary

 

capacity or who holds indicia of ownership primarily to protect the

 

person's or the regulated financial institution's security interest

 

in the underground storage tank system or the property on which it

 

is located. This exclusion does not apply to a grantor,

 

beneficiary, remainderman, or other person who could directly or

 

indirectly benefit financially from the exclusion other than by the

 

receipt of payment for fees and expenses related to the

 

administration of a trust.

 

     (aa) (u) "Oxygenate" means an organic compound containing

 

oxygen and having properties as a fuel that are compatible with

 

petroleum, including, but not limited to, ethanol, methanol, or

 

methyl tertiary butyl ether (MTBE).

 

     Sec. 21503. As used in this part:

 

     (a) "Payment voucher" means a form prepared by the department

 

that specifies payment authorization by the department to the

 

department of treasury.

 

     (b) "Petroleum" means crude oil, crude oil fractions, and

 

refined petroleum fractions including gasoline, kerosene, heating

 

oils, and diesel fuels.

 

     (c) "Petroleum underground storage tank system" means an

 

underground storage tank system used for the storage of petroleum.

 

     (d) "Precertification application" means the application

 

submitted by an owner or operator seeking the department's

 

eligibility determination for reimbursement for the costs of

 

corrective action from the temporary reimbursement program.

 

     (e) "Refined petroleum" means aviation gasoline, middle

 

distillates, jet fuel, kerosene, gasoline, residual oils, and any

 

oxygenates that have been blended with any of these. Refined

 

petroleum includes transmix. Refined petroleum does not include

 

excluded liquids.

 

     (f) "Refined petroleum fund" means the refined petroleum fund

 

established under section 21506a.

 

     (g) "Refined petroleum product cleanup initial program" means

 

the program established in section 21553.

 

     (h) "Refined petroleum product cleanup program" means the

 

refined petroleum product cleanup program established by law.

 

     (i) "Regulated financial institution" means a state or

 

nationally chartered bank, savings and loan association or savings

 

bank, credit union, or other state or federally chartered lending

 

institution or a regulated affiliate or regulated subsidiary of any

 

of these entities.

 

     (j) "Regulatory fee" means the environmental protection

 

regulatory fee imposed under section 21508.

 

     (k) "Release" means any spilling, leaking, emitting,

 

discharging, escaping, or leaching from a petroleum underground

 

storage tank system into groundwater, surface water, or subsurface

 

soils.

 

     (l) "Site" means a location where a release has occurred or a

 

threat of a release exists from an underground storage tank system,

 

excluding any location where corrective action was completed which

 

satisfies the cleanup criteria for unrestricted residential use

 

under part 213.

 

     (m) "Temporary reimbursement program" means the program

 

established in section 21554.

 

     (n) "Terminal" means a refined petroleum storage and

 

distribution facility that meets all of the following requirements:

 

     (i) Is registered as a qualified terminal by the internal

 

revenue service.

 

     (ii) Is supplied by a pipeline or a marine vessel.

 

     (iii) Has a rack from which refined petroleum may be removed.

 

     (o) "Transmix" means the mixed product that results from the

 

buffer or interface of 2 different products in a pipeline shipment,

 

or a mixture of 2 different products within a refinery or terminal

 

that results in an off-grade mixture.

 

     (p) (n) "Underground storage tank system" means an existing

 

tank or combination of tanks, including underground pipes connected

 

to the tank or tanks, which is or was used to contain an

 

accumulation of regulated substances, and is not currently being

 

used for any other purpose, and the volume of which, including the

 

volume of the underground pipes connected to the tank or tanks, is

 

10% or more beneath the surface of the ground. An underground

 

storage tank system includes an underground storage tank that is

 

properly closed in place pursuant to part 211 and rules promulgated

 

under that part. An underground storage tank system does not

 

include any of the following:

 

     (i) A farm or residential tank of 1,100 gallons or less

 

capacity used for storing motor fuel for noncommercial purposes.

 

     (ii) A tank used for storing heating oil for consumptive use on

 

the premises where the tank is located.

 

     (iii) A septic tank.

 

     (iv) A pipeline facility, including gathering lines regulated

 

under 49 USC 60101 to 60137.

 

     (v) A surface impoundment, pit, pond, or lagoon.

 

     (vi) A storm water or wastewater collection system.

 

     (vii) A flow-through process tank.

 

     (viii) A liquid trap or associated gathering lines directly

 

related to oil or gas production and gathering operations.

 

     (ix) A storage tank situated in an underground area such as a

 

basement, cellar, mineworking, drift, shaft, or tunnel if the

 

storage tank is situated upon or above the surface of the floor.

 

     (x) Any pipes connected to a tank described in subparagraphs

 

(i) to (ix).

 

     (xi) An underground storage tank system holding hazardous

 

wastes listed or identified under 42 USC 6921 to 6939f, or a

 

mixture of such hazardous waste and other regulated substances.

 

     (xii) A wastewater treatment tank system that is part of a

 

wastewater treatment facility regulated under 33 USC 1317(b) or 33

 

USC 1342.

 

     (xiii) Equipment or machinery that contains regulated substances

 

for operational purposes such as hydraulic lift tanks and

 

electrical equipment tanks.

 

     (xiv) An underground storage tank system with a capacity of 110

 

gallons or less.

 

     (xv) An underground storage tank system that contains a de

 

minimis concentration of regulated substances.

 

     (xvi) An emergency spill or overflow containment underground

 

storage tank system that is expeditiously emptied after use.

 

     (xvii) A wastewater treatment tank system.

 

     (xviii) An underground storage tank system containing

 

radioactive material that is regulated under the atomic energy act

 

of 1954, 42 USC 2011 to 2297h-13.

 

     (xix) An underground storage tank system that is part of an

 

emergency generator system at nuclear power generation facilities

 

regulated by the nuclear regulatory commission under 10 CFR part

 

50.

 

     (xx) Airport hydrant fuel distribution systems.

 

     (xxi) Underground storage tank systems with field-constructed

 

tanks.

 

     (q) (o) "Work invoice" means an original billing acceptable to

 

the administrator and signed by the owner or operator that includes

 

all of the following:

 

     (i) The name, address, and federal tax identification number of

 

each contractor who performed work.

 

     (ii) The name and social security number of each employee who

 

performed work.

 

     (iii) A specific itemized list of the work performed by each

 

contractor and an itemized list of the cost of each of these items.

 

     (iv) A statement that the owner or operator employed a

 

documented sealed competitive bidding process for any contract

 

award exceeding $5,000.00.

 

     (v) If the owner or operator did not accept the lowest

 

responsive bid received, a specific reason why the lowest

 

responsive bid was not accepted.

 

     (vi) Upon request of the administrator, a list of all bids

 

received.

 

     (vii) Proof of payment of the co-pay amount. as required under

 

section 21514.

 

     Sec. 21508. (1) An environmental protection regulatory fee is

 

imposed on all refined petroleum products sold for resale in this

 

state or consumption in this state. The regulatory fee shall be

 

charged for capacity utilization of underground storage tanks

 

measured on a per gallon basis. The regulatory fee shall be charged

 

against all refined petroleum products sold for resale in this

 

state or consumption in this state so as to not exclude any

 

products that may be stored in an underground tank at any point

 

after the petroleum is refined. The regulatory fee shall be 7/8

 

cent per gallon for each gallon of refined petroleum sold for

 

resale in this state or consumption in this state, with the per

 

gallon charge being a direct measure of capacity utilization of an

 

underground storage tank system. The regulatory fee shall not be

 

imposed on refined petroleum products that are transferred within

 

the bulk transfer/terminal system. The regulatory fee shall not be

 

imposed on refined petroleum products that are exported from this

 

state.

 

     (2) The department of treasury shall precollect regulatory

 

fees from persons who refine petroleum in this state for resale in

 

this state or consumption in this state and persons who import

 

refined petroleum into this state for resale in this state or

 

consumption in this state. The department of treasury shall collect

 

regulatory fees that can be collected at the same time as the sales

 

tax under section 6a of the general sales tax act, 1933 PA 167, MCL

 

205.56a, at that time. The remainder of the regulatory fees shall

 

be collected in the manner determined by the state treasurer.

 

     (3) A public utility with more than 500,000 customers in this

 

state is exempt from any fee or assessment imposed under this part

 

if that fee or assessment is imposed on petroleum used by that

 

public utility for the generation of steam or electricity.

 

     (4) Beginning on the effective date of the 2004 amendatory act

 

that amended this section, all All regulatory fees collected

 

pursuant to this part shall be deposited into the refined petroleum

 

fund. created in section 21506a.

 

     (5) Consistent with the March 31, 1995 determination by the

 

state treasurer that revenue will not be sufficient to pay expected

 

expenditures, and consistent with the April 3, 1995 notice of the

 

fund administrator pursuant to subsection (6), funding is no longer

 

available under this part for new claims, work invoices, and

 

requests for indemnification received after 5 p.m. on June 29,

 

1995. Claims, work invoices, and requests for indemnification

 

received after 5 p.m. on June 29, 1995 are not eligible for funding

 

under this part. Work invoices and requests for indemnification

 

received prior to 5 p.m. on June 29, 1995 may be paid to the extent

 

money is available in the fund as provided in this part.

 

     (6) If the state treasurer determines that fund revenues will

 

not be sufficient to pay expected expenditures from the fund, the

 

state treasurer shall notify the administrator, and 90 days after

 

this notification has been given the administrator shall not accept

 

any new work invoices or requests for indemnification. Upon

 

receiving this notification from the state treasurer, the

 

administrator shall notify by certified mail the owners and

 

operators of petroleum underground storage tank systems registered

 

under part 211 that funding under this part will no longer be

 

available for new claims after the 90-day period has expired.

 

However, work invoices and requests for indemnification that were

 

submitted to the administrator prior to or during this 90-day

 

period may be paid to the extent money is available in the fund as

 

provided in this part.

 

     (7) The department of treasury may audit, enforce, collect,

 

and assess the fee imposed by this part in the same manner and

 

subject to the same requirements as revenues collected pursuant to

 

1941 PA 122, MCL 205.1 to 205.31.

 

     Sec. 21509. (1) Notwithstanding any other provision in this

 

part, regulatory fees shall be calculated and paid upon gross or

 

metered gallons with respect to all "light" petroleum products.

 

With respect only to "heavy" petroleum products (No. 4, No. 5, No.

 

6 residual oils), regulatory fees shall be calculated and paid upon

 

net or temperature-corrected gallons.

 

     (2) Notwithstanding any other provision in this part, if a

 

person receives refined petroleum products in this state for resale

 

in this state or consumption in this state pursuant to a product

 

exchange agreement, the department of treasury shall collect the

 

regulatory fees from that person. As used in this subsection,

 

"product exchange agreement" means an agreement between buyers and

 

sellers of refined petroleum products in which refined petroleum

 

products in bulk quantity are made available to a person solely in

 

consideration of that person making available a like volume of

 

refined petroleum products to the other party at some other

 

location.