AB861: Bill Text

1997 - 1998 LEGISLATURE

1997 Assembly BILL 861

March 2, 1998 - Introduced by Representatives Johnsrud, Harsdorf, Underheim, Vander Loop, Goetsch, Skindrud, Duff, Olsen, Hutchison, Otte, Huebsch, Ward, Brandemuehl, Ourada, Porter, Plale, Huber, Grothman, Meyer, F. Lasee, Kreibich, Schafer and Kedzie, cosponsored by Senators Moen, C. Potter, Plache and Wineke. Referred to Joint committee on Finance.

AB861,1,8 An Act to amend 25.47, 101.143 (3) (cm), 101.143 (4) (b) (intro.), 101.143 (4) (cm), 101.144 (2) (b) 1. and 101.144 (3m) (a) 3.; and to create 20.143 (3) (5), 20.143 (3) (t), 101.143 (1) (cq), 101.143 (3) (cp), 101.143 (3) (cs), 101.143 (3) (cw), 101.143 (4) (a) 9., 101.143 (4) (c) 11. and 12., 101.143 (4s), 101.143 (11), 101.144 (1) (aq) and 101.144 (1) (av) of the statutes; relating to: reimbursement for costs incurred because of discharges from certain petroleum product storage tanks, authority over discharges from petroleum storage tanks, authorizing revenue obligations to be contracted and making appropriations.

Analysis by the Legislative Reference Bureau

Under current law, the department of commerce administers a program to reimburse owners of certain petroleum product storage tanks for a portion of the costs of cleaning up discharges from those tanks. This program is commonly known as PECFA. This bill makes changes related to PECFA and petroleum product discharge cleanups.

Revenue bonding

Under current law, PECFA awards are primarily funded from the petroleum inspection fee.

This bill allows PECFA awards to be funded from the proceeds of revenue bonds. The bill authorizes the issuance of not more than $400,000,000 in revenue bonds for PECFA awards. The revenue bonds are to to repaid from the petroleum inspection fee.

PECFA process

Currently, to be eligible for PECFA, the owner of a petroleum product storage tank must investigate the discharge, prepare a plan for the cleanup and conduct the cleanup.

This bill generally imposes an additional requirement on the owner of a tank if a high priority factor exists in connection with the discharge. High priority factors include that the contaminant mass is moving or that a drinking water well has been contaminated. If a high priority factor is present, the owner must complete an analysis of alternative cleanup approaches and submit the analysis to the department of commerce. When the department receives an analysis, it may require the owner to implement one of the alternatives and establish a maximum reimbursable cost for the cleanup, require the owner to use specified contractors to conduct the cleanup or require the owner to use a public bidding process to select contractors to conduct the cleanup.

Under the bill, if the site of a discharge lacks a high priority factor, the owner must generally submit a proposal for a cleanup by controlling the source of the contamination using excavation, verification of the effectiveness of natural processes (called natural attenuation) in remedying the contamination, monitoring, deed restrictions or other restrictions on the use of or access to the site or a combination of those measures. When the department of commerce receives a proposal, it may approve the proposal and establish a maximum reimbursable cost for the cleanup, require the owner to develop a cleanup plan that uses other measures, require the owner to use specified contractors to conduct the cleanup or require the owner to use a public bidding process to select contractors to conduct the cleanup.

Under the bill, if an owner of a tank believes that the investigation, planning and cleanup can be completed for $80,000 or less, the owner may proceed with the process without being subject to the new requirements described above. However, if it turns out that the process cannot be completed for $80,000, the owner must stop work on the discharge site and inform the department of commerce. After reviewing the situation, the department may authorize the owner to continue the cleanup and establish a maximum reimbursable cost for the cleanup, require the owner to develop alternative cleanup proposals, require the owner to use specified contractors to complete the cleanup or require the owner to use a public bidding process to select contractors to complete the cleanup. If the owner of a tank who attempts to complete a cleanup for $80,000 or less uses a consultant, the consultant is required to indemnify the owner for any costs of the cleanup that the department determines are ineligible for PECFA reimbursement. The consultant must provide a bond or letter of credit to ensure that the owner will be indemnified.

The bill authorizes the department of commerce to give priority in paying PECFA awards for cleanups that are completed for $80,000 or less.

The bill authorizes the department of commerce and the department of natural resources (DNR) to review cleanups of petroleum discharges that are in progress to determine the efficacy and cost-effectiveness of the cleanups. Following a review, the department of commerce may establish a maximum reimbursable cost for the cleanup, require the owner to use specified contractors to complete the cleanup or require the owner to develop and implement a revise cleanup plan.

Authority over petroleum product discharges

Under current law, DNR generally has the authority to order a responsible person to conduct a cleanup of a hazardous substance and to oversee the cleanup. However, under current law, the department of commerce has this authority over cleanups of certain discharges from petroleum product storage tanks. The department of commerce has authority over cleanups if the site of the discharge is classified as low or medium priority based on the threat that the discharge poses to public health, safety and welfare and to the environment and if the site is not contaminated by nonpetroleum hazardous substances. Current law requires DNR and the department of commerce to enter into a memorandum of understanding that establishes procedures and standards for determining whether a site is high, medium or low priority.

Under this bill, DNR has authority over sites of discharges from petroleum product storage tanks that have high priority factors or are contaminated by other hazardous substances in addition to petroleum products and the department of commerce has authority over all other sites of discharges from petroleum product storage tanks. High priority factors include that the contaminant mass is moving or that a drinking water well has been contaminated.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB861, s. 1 Section 1. 20.143 (3) (5) of the statutes is created to read:

AB861,4,2 20.143 (3) (5) Petroleum storage environmental remedial action revenue obligation repayment. From the fund created under s. 101.143 (11) (b), all moneys received by the fund and not transferred under s. 101.143 (11) (c) to the petroleum inspection fund, for the purpose of the retirement of revenue obligations, providing for reserves and for operations relating to the management and retirement of revenue obligations issued under s. 101.143 (11). All moneys received are irrevocably appropriated in accordance with subch. II of ch. 18 and further established in resolutions authorizing the issuance of the revenue obligations and setting forth the distribution of funds to be received thereafter. Estimated disbursements under this paragraph shall not be included in the schedule under s. 20.005.

AB861, s. 2 Section 2. 20.143 (3) (t) of the statutes is created to read:

AB861,4,10 20.143 (3) (t) Petroleum storage environmental remedial action revenue obligation funding. As a continuing appropriation, all proceeds from revenue obligations issued under s. 101.143 (11) and deposited into the fund in the state treasury created under s. 18.57 (1), for paying awards under s. 101.143 (4), providing for reserves and for expenses of issuance and management of the revenue obligations. Estimated disbursements under this paragraph shall not be included in the schedule under s. 20.005.

AB861, s. 3 Section 3. 25.47 of the statutes, as affected by 1997 Wisconsin Act 27, is amended to read:

AB861,4,18 25.47 Petroleum inspection fund. There is established a separate nonlapsible trust fund designated as the petroleum inspection fund, to consist of the fees imposed any revenues derived under s. 168.12 (1) that are not pledged to the fund created under s. 101.143 (11) (b), the moneys transferred under s. 101.143 (11) (c), the payments under s. 101.143 (4) (h) 1m., the payments under s. 101.143 (5) (a) and the net recoveries under s. 101.143 (5) (c).

AB861, s. 4 Section 4. 101.143 (1) (cq) of the statutes is created to read:

AB861,4,22 101.143 (1) (cq) "Natural attenuation" means the reduction in the mass and concentration of a substance due to naturally occurring physical, chemical and biological processes.

AB861, s. 5 Section 5. 101.143 (3) (cm) of the statutes is amended to read:

AB861,5,4 101.143 (3) (cm) Monitoring as remedial action. An owner or operator or person owning a home oil tank system may, with the approval of the department of natural resources or, if the discharge is covered under s. 101.144 (2) (b), the department of commerce, satisfy the requirements of par. (c) 2. and 3. by proposing and implementing monitoring to ensure the effectiveness of the natural process of degradation attenuation of petroleum product contamination.

AB861, s. 6 Section 6. 101.143 (3) (cp) of the statutes is created to read:

AB861,5,8 101.143 (3) (cp) Sites with high priority factors. 1. This paragraph applies if at least one of the following high priority factors exists in connection with a petroleum product discharge:

AB861,5,9 a. The site investigation documents that the contaminant mass is moving.

AB861,5,12 b. Repeated tests show that the discharge has resulted in a concentration of contaminants in a private or public potable well that exceeds the preventive action limits established under s. 160.15.

AB861,5,13 c. Soil contamination exists within one meter of bedrock.

AB861,5,16 d. Petroleum product that is not in dissolved phase is present with a thickness of 0.01 feet or more, as shown by repeated measurements from quarterly or semiannual monitoring.

AB861,5,22 2. Except as provided in par. (cw), if a site has a high priority factor, the owner or operator or person owning a home oil tank system shall complete an analysis of alternative remedial actions designed to eliminate the risk factor and address the contamination caused by the discharge. The analysis shall include estimates of the costs of implementing each alternative. The owner or operator or person owning a home oil tank system shall submit the analysis to the department.

AB861,5,24 3. When the department receives an analysis under subd. 2., the department may do one of the following:

AB861,6,3 a. Require the owner or operator or person owning a home oil tank system to implement one of the remedial action alternatives and establish a maximum reimbursable cost for the remedial action.

AB861,6,6 b. Require the owner or operator or person owning a home oil tank system to use specified service providers or to conduct the remedial action in conjunction with the remedial action for another discharge.

AB861,6,8 c. Require the owner or operator or person owning a home oil tank system to use a competitive public bidding process to select service providers.

AB861, s. 7 Section 7. 101.143 (3) (cs) of the statutes is created to read:

AB861,6,14 101.143 (3) (cs) Sites without high priority factors. 1. Except as provided in par. (cw), if no high priority factor specified in par. (cp) 1. exists in connection with a petroleum product discharge, the owner or operator or person owning a home oil tank system shall submit a proposal, including estimated costs, to the department for remedial action using one or more of the following:

AB861,6,15 a. Control of the source of contamination using excavation.

AB861,6,16 b. Verification of the effectiveness of natural attenuation.

AB861,6,17 c. Monitoring.

AB861,6,18 d. Deed restrictions or other restrictions on the use of or access to the site.

AB861,6,20 2. When the department receives a proposal under subd. 1., the department may do one of the following:

AB861,6,22 a. Approve the proposal and establish a maximum reimbursable cost for the remedial action.

AB861,6,25 b. Require the owner or operator or person owning a home oil tank system to develop and implement a remedial action proposal that uses measures other than those specified in subd. 1. a. to d.

AB861,7,3 c. Require the owner or operator or person owning a home oil tank system to use specified service providers or to conduct the remedial action in conjunction with the remedial action for another discharge.

AB861,7,5 d. Require the owner or operator or person owning a home oil tank system to use a competitive public bidding process to select service providers.

AB861, s. 8 Section 8. 101.143 (3) (cw) of the statutes is created to read:

AB861,7,18 101.143 (3) (cw) Low-cost sites. 1. If an owner or operator or person owning a home oil tank system believes that a site investigation, remedial action plan and remedial action, to the point at which the department of natural resources or the department of commerce determines, based on available information, that no further remedial action is necessary, can be completed for $80,000 or less, excluding interest costs, the owner or operator or person owning a home oil tank system may attempt to complete the site investigation, remedial action plan and remedial action for $80,000 or less. The owner or operator or person owning a home oil tank system shall inform the department of the intent to proceed under this subdivision before beginning the remedial action. Paragraphs (cp) 2. and 3. and (cs) 1. and 2. do not apply if the owner or operator or person owning a home oil tank system proceeds under this subdivision.

AB861,7,25 2. If an owner or operator or person owning a home oil tank system proceeds under subd. 1. and it appears that the remedial action cannot be completed, to the point at which the department of natural resources or the department of commerce determines, based on available information, that no further remedial action is necessary $80,000 or less, all work on the site must be stopped and the department notified as soon as possible. After reviewing the situation, the department may do one of the following:

AB861,8,3 a. Authorize the owner or operator or person owning a home oil tank system to continue with the remedial action and establish a maximum reimbursable cost for the remedial action.

AB861,8,5 b. Require the owner or operator or person owning a home oil tank system to develop remedial action alternatives and implement one of the alternatives.

AB861,8,9 c. Require the owner or operator or person owning a home oil tank system to use specified service providers to complete the remedial action or to conduct the remainder of the remedial action in conjunction with the remedial action for another discharge.

AB861,8,12 d. Require the owner or operator or person owning a home oil tank system to use a competitive public bidding process to select service providers for the remainder of the remedial action.

AB861,8,18 3. If an owner or operator or person owning a home oil tank system proceeding under subd. 1. uses a consultant, the consultant shall indemnify the owner or operator or person owning a home oil tank system for any costs of the remedial action that the department determines to be ineligible. The consultant shall provide a bond or a letter of credit in favor of the owner or operator or person owning a home oil tank system in an amount sufficient to cover those costs.

AB861,9,2 4. If a consultant fails to provide a bond or letter of credit under subd. 3., the department may summarily prohibit the consultant from acting as a consultant for projects for which claims will be filed under this section. If a consultant repeatedly fails to complete projects that proceed under subd. 1., to the point at which the department of natural resources or the department of commerce determines, based on available information, that no further remedial action is necessary, for $80,000 or less, the department may prohibit the consultant from acting as a consultant for projects for which claims will be filed under this section or may prohibit the consultant from acting as a consultant for projects that proceed under subd. 1.

AB861, s. 9 Section 9. 101.143 (4) (a) 9. of the statutes is created to read:

AB861,9,9 101.143 (4) (a) 9. The department may give priority to paying an award for a claim if the department of natural resources or the department of commerce has determined, based on available information, that no further remedial action is necessary with respect to the petroleum product discharge or has approved the use of natural attenuation with long-term monitoring and eligible costs do not exceed $80,000.

AB861, s. 10 Section 10. 101.143 (4) (b) (intro.) of the statutes is amended to read:

AB861,9,14 101.143 (4) (b) Eligible costs. (intro.) Eligible Except as provided in par. (c), eligible costs for an award under par. (a) include actual costs or, if the department establishes a schedule usual and customary cost under par. (cm) for an item, usual and customary costs for the following items only:

AB861, s. 11 Section 11. 101.143 (4) (c) 11. and 12. of the statutes are created to read:

AB861,9,18 101.143 (4) (c) 11. Costs of excavating soils if the level of contamination in the soils is less than numerical residual contaminant levels approved by the department of natural resources or the department of commerce.

AB861,9,20 12. Costs in excess of maximum reimbursable costs established by the department under sub. (3) (cp) 3. a., (cs) 2. a. or (cw) 2. a. or (4s) (b) 1.

AB861, s. 12 Section 12. 101.143 (4) (cm) of the statutes is amended to read:

AB861,9,25 101.143 (4) (cm) Usual and customary costs. The department may shall establish a schedule of usual and customary costs for any some or all of the items under par. (b) and may use that schedule to determine the amount of a claimant's eligible costs.

AB861, s. 13 Section 13. 101.143 (4s) of the statutes is created to read:

AB861,10,6 101.143 (4s) Remedial action review. (a) The department of commerce or the department of natural resources may review remedial actions being conducted for which claims have been or will be filed under sub. (3) to determine the efficacy and cost-effectiveness of the remedial action and to determine whether ineligible costs are being incurred.

AB861,10,8 (b) Following a review under par. (a) of a remedial action, the department of commerce may do one or more of the following:

AB861,10,10 1. Establish a maximum reimbursable cost for the remedial action if the department has not already done so.

AB861,10,13 2. Require the owner or operator or person owning a home oil tank system to use specified service providers or to conduct the remainder of the remedial action in conjunction with the remedial action for another discharge.

AB861,10,15 3. Require the owner or operator or person owning a home oil tank system develop and implement a revised remedial action plan.

AB861,10,22 (c) The department may not reimburse an owner or operator or person owning a home oil tank system for any costs incurred in connection with a discharge after the owner or operator or person owning a home oil tank system, or the consultant retained by the owner or operator or person owning a home oil tank system, fails to provide information needed for a review under par. (a) or for any costs incurred after the owner or operator or person owning a home oil tank system fails to comply with requirements imposed under par. (b) 2. or 3.

AB861, s. 14 Section 14. 101.143 (11) of the statutes is created to read:

AB861,11,3 101.143 (11) Revenue obligations. Awards under sub. (4) may be funded with the proceeds of revenue obligations issued subject to and in accordance with subch. II of ch. 18.

AB861,11,6 (b) The department may, under s. 18.56 (5), direct the department of revenue to deposit in a separate fund in the state treasury revenues derived under s. 168.12 (1).