Environment
Hazardous substances and environmental cleanup
Requirement to clean up hazardous substance spills
Current law generally requires a person who possesses or controls a hazardous
substance that is discharged or who causes the discharge of a hazardous substance
to restore the environment to the extent practicable and to minimize the harmful
effects of the discharge on the environment. Courts have held that a person
possesses or controls any hazardous substance that is present on property that the
person owns. Current law generally exempts a local governmental unit (a city,
village, town, county, redevelopment authority and housing authority) from these
clean-up requirements with respect to hazardous substance discharges on land
acquired in specified ways, such as through tax delinquency proceedings or
condemnation.
This bill requires local governmental units to agree to provide access to land
that is subject to the exemption for the purpose of letting someone else conduct a
cleanup of the discharge. The bill also expands the local governmental exemption
from the clean-up requirements in a number of ways:
1. The bill makes community development authorities eligible for the
exemption.
2. Under current law, the local governmental unit exemption from clean-up
requirements is not available if the discharge is from an underground petroleum
storage tank. This bill eliminates that limitation.
3. The bill applies the exemption to land acquired with funds from this state's
stewardship program, land acquired through escheat and land acquired from
another local governmental unit that is entitled to the exemption. Land is acquired
through escheat when the owner dies without a will that disposes of the land and
without any heir.
4. The bill exempts a local governmental unit from the requirement to clean up
a hazardous substance that has migrated from a property acquired in one of the
specified ways to another property.
The bill also exempts a local governmental unit that has acquired property in
one of the specified ways from certain requirements relating to hazardous waste if
the hazardous waste is cleaned up, DNR approves the cleanup and other conditions
are satisfied.
Under current law, a lender who acquires land through enforcement of a
security interest is not liable for a discharge of a hazardous substance on that land
if certain requirements are satisfied. This bill requires a lender to provide access to
the land on which the discharge occurred for the purpose of letting someone else
conduct a cleanup of the hazardous substance. Under current law, the
lender-liability exemption is not available if the discharge is from an underground
petroleum storage tank. This bill makes the lender-liability exemption available if
the discharge is from an underground petroleum storage tank.
Exemption from clean-up requirement for voluntary parties
Under current law, any person, except for a person who intentionally or
recklessly caused the original discharge of a hazardous substance on a property, is
called a voluntary party. A voluntary party is exempt from absolute requirements
to restore the environment and minimize the harmful effects of the discharge, and
from the requirements of other laws relating to hazardous substances, if an
environmental investigation of the property is conducted and approved by the
department of natural resources (DNR), the property is cleaned up, DNR certifies
that the cleanup restored the environment and minimized the harmful effects of the
discharge and the voluntary party maintains and monitors the property as required
by DNR. This exemption applies even if later changes to the law impose greater
responsibilities on the voluntary party or if it is discovered that the cleanup failed
to fully restore the environment or to minimize the harmful effects of the discharge.
Under this bill, any person, including a person who intentionally or recklessly
caused the discharge of a hazardous substance, is eligible for the voluntary party
exemption under the conditions described above. The bill authorizes DNR to require
a voluntary party to obtain insurance to cover the cost of a cleanup in case the initial
cleanup fails.
The bill also specifies that the voluntary party exemption applies only with
respect to hazardous substances released on the property before DNR approves the
environmental investigation of the property. In order to qualify for the voluntary
party exemption, the bill requires that both the voluntary party's property and any
other property affected by a discharge originating from that property be cleaned up.
Once DNR approves the cleanup, the voluntary party is exempt from further
clean-up requirements on both the voluntary party's own property and any other
property affected by a discharge originating from that property.
Under current law, a person is exempt from the requirements to restore the
environment and minimize the effects of the discharge of a hazardous substance on
the environment with respect to the existence of a hazardous substance in
groundwater on property possessed or controlled by the person if the discharge
originated from a source off of the property, the person agrees to allow access to the
property so that someone else can conduct a cleanup and the person agrees to any
other condition necessary to ensure that an adequate cleanup can be conducted.
Under this bill, for a property affected by an off-site discharge that has
contaminated the groundwater and by discharges of other hazardous substances, a
voluntary party is exempt from absolute requirements to restore the environment
and minimize the harmful effects of the discharges, and from the requirements of
other laws relating to hazardous substances, if: 1) an environmental investigation
of the property is conducted and approved by DNR; 2) the property is cleaned up,
except with respect to the discharge that originated off-site; 3) DNR certifies that the
cleanup restored the environment and minimized the harmful effects of the
discharge, except with respect to the discharge that originated off-site; 4) DNR
determines in writing that the voluntary party qualifies for the off-site exemption;
and 5) the voluntary party maintains and monitors the property as required by DNR.
Currently, a person may be allowed to use natural attenuation to clean up a
hazardous substance in groundwater if DNR determines that natural attenuation
will bring the groundwater into compliance with groundwater standards within a
reasonable period. "Natural attenuation" means the reduction in the amount and
concentration of a substance in groundwater that occurs because of natural
processes.
Under this bill, if groundwater on a property is contaminated by a hazardous
substance in a concentration that exceeds a groundwater standard and DNR
determines that natural attenuation will restore groundwater quality, a voluntary
party is exempt from absolute requirements to restore the environment and
minimize the harmful effects of the discharges, and from the requirements of other
laws relating to hazardous substances, if: 1) an environmental investigation of the
property is conducted and approved by DNR; 2) the property is cleaned up, except
with respect to the substance for which DNR approves natural attenuation; 3) DNR
certifies that the cleanup restored the environment and minimized the harmful
effects of the discharge, except with respect to the substance for which DNR approves
natural attenuation; 4) the voluntary party maintains and monitors the property as
required by DNR; and 5) if required by DNR, the voluntary party obtains insurance
to cover the cost of a cleanup in case natural attenuation fails.
Under this bill, a voluntary party is exempt from the requirements to clean up
any hazardous substance discharge on a property that is discovered after two
environmental investigations have been conducted and approved by DNR with
respect to the property if the voluntary party has obtained insurance to cover the
clean-up costs.
Petroleum storage remedial action
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 authorizes the department of commerce to issue revenue obligations,
to be paid from revenues deposited in the petroleum inspection fund, to fund the
payment of claims under the PECFA program. Revenue obligations issued under
this bill may not exceed $450,000,000 in principal amount. See STATE
GOVERNMENT, State finance.
Under current law, the department of revenue (DOR) collects a petroleum
inspection fee of three cents per gallon on petroleum products that are received for
sale in this state. The fee is deposited in the petroleum inspection fund and is used
to fund PECFA as well as various other programs.
This bill requires the department of commerce to change the amount of the
petroleum inspection fee under specified conditions. If the amount of unpaid PECFA
claims, as of June 30 of an odd-numbered year, exceeds $10,000,000, the department
must increase the fee, effective the following April 1, as necessary to increase annual
revenues by the amount by which unpaid claims exceed $10,000,000. If the balance
in the petroleum inspection fund on June 30 of an odd-numbered year exceeds
$10,000,000 and no PECFA revenue bonds are outstanding, the department must
reduce the fee, effective the following April 1, as necessary to reduce annual revenues
by $5,000,000 or the amount by which the balance in the fund exceeds $10,000,000,
whichever is greater.
Currently, PECFA reimburses applicants for interest costs incurred in
financing a cleanup, but that reimbursement is limited to interest at 1% over the
prime rate. Under this bill, PECFA does not reimburse interest costs incurred by an
applicant in financing a cleanup if the applicant has annual gross revenues in excess
of $20,000,000. For other applicants, the PECFA interest reimbursement is limited
to interest at 5%. The limits on interest reimbursements apply to interest incurred
after October 31, 1999, on claims filed after October 31, 1999.
Under current law, DNR generally may order a responsible person to conduct
a cleanup of a hazardous substance that has been discharged into the environment
and may oversee the cleanup. However, under current law, the department of
commerce may order and oversee 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 state's groundwater law, DNR and
the department of health and family services set enforcement standards. An
enforcement standard represents a concentration of a substance in groundwater.
This bill requires the department of commerce to establish the standards for
categorizing sites of petroleum product discharges by rule, rather than by
memorandum of understanding. The bill requires the department of commerce and
DNR to attempt to agree on the standards. The bill prohibits the departments from
providing, in those standards, that all sites at which a groundwater enforcement
standard has been exceeded are high priority. The bill also requires the departments
to design the standards to classify no more than 50% of sites as high priority. If the
departments cannot agree on the standards, the secretary of administration must
resolve the disagreement.
Under PECFA, the owner of a petroleum product storage tank may receive an
award for the amount by which the cost of the cleanup exceeds a deductible amount,
up to a specified maximum. The current maximum for underground tanks varies
from $100,000 for small farm tanks to $1,000,000 for tanks located at a facility at
which petroleum is stored for resale and tanks that handle an average of more than
10,000 gallons of petroleum per month.
This bill changes the maximum PECFA award for any underground petroleum
product storage tank to $100,000 if the site of the discharge from the tank is classified
as medium priority or low priority under the classification system promulgated by
rule by the department of commerce. The change in the maximum PECFA award
applies to PECFA claims for which remedial action plans are approved after
November 30, 1999.
Currently, the PECFA deductible for underground tanks is generally $2,500
plus 5% of eligible costs, but not more than $7,500, except that the deductible for
heating oil tanks owned by school districts and technical college districts is 25% of
eligible costs.
This bill changes the PECFA deductible amount for certain underground
petroleum product storage tanks. Under this bill, the deductible for an underground
petroleum product storage tank that is located at a facility at which petroleum is
stored for resale or an underground petroleum product storage tank that handles an
annual average of more than 10,000 gallons of petroleum per month is $10,000, plus
$2,500 if the eligible costs exceed $50,000, plus $2,500 more if eligible costs exceed
$80,000, plus $10,000 more for each whole $100,000 by which eligible costs exceed
$150,000, except that the department of commerce may, by rule, exempt a class of
owners and operators from this higher deductible.
The bill also changes the PECFA deductible amount for aboveground storage
tanks located at terminals from $15,000 plus 5% of the amount by which eligible costs
exceed $200,000 to $15,000 plus 15% of the amount by which eligible costs exceed
$200,000. A terminal is a facility that is connected to a petroleum pipeline.
This bill authorizes the department of commerce to promulgate rules for
assigning award priorities to cleanups under PECFA, except for cleanups of
discharges from home heating oil tanks, small farm tanks and heating oil tanks
owned by school districts. If the department promulgates the rules, it must pay
PECFA awards, for cleanups that begin after the rules take effect, in order of the
award priorities under the rules. The bill requires the department to inform the
owner or operator of a petroleum product storage tank of the date on which it is
appropriate to begin a cleanup, based on when the department estimates funding
will be available for an award for the cleanup. The bill authorizes an owner or
operator to delay beginning a cleanup until the date that the department determines
it is appropriate to begin the cleanup. The bill also authorizes the department to
deny PECFA reimbursement for interest costs if an owner or operator begins a
cleanup before the appropriate beginning date as determined by the department.
This bill authorizes the department of commerce to require a person to pay a
fee as a condition of submitting a bid to provide a service for a cleanup under PECFA.
If the department of commerce imposes a fee, the department may purchase, or
provide funding for the purchase of, insurance to cover the amount by which the costs
of conducting a cleanup exceed the amount bid to conduct the cleanup.
This bill requires the department of commerce and DNR to report information
every six months about petroleum product cleanups that are in progress.
Dry cleaner environmental response program
Under current law, DNR administers the dry cleaner environmental response
program, under which owners and operators of dry cleaning facilities are reimbursed
a portion of the costs incurred in cleaning up a discharge of dry cleaning solvent. This
program is funded, in part, by dry cleaning license, solvent and inventory fees that
are paid by owners and operators of dry cleaning facilities. As a condition of receiving
reimbursement, owners and operators of closed dry cleaning facilities must pay
annually for 30 years the average yearly dry cleaning license fee and an amount
equal to the total amount collected as annual dry cleaning solvent fees divided by the
number of operating dry cleaning facilities for that year. These required fees are in
addition to the deductible owners and operators must pay before receiving a
reimbursement.
This bill eliminates the requirement that operators of closed dry cleaning
facilities pay annual fees for 30 years. Instead, the bill requires owners of dry
cleaning facilities to pay as part of the deductible an amount equal to 30 times the
average license fee for the year in which the reimbursement is made and an amount
equal to 30 times the total collected as solvent fees divided by the number of
operating dry cleaning facilities for the year. This bill also increases the deductible
for closed facilities when eligible costs exceed $200,000.
Currently, financing costs are reimbursable costs under the dry cleaner
environmental response program. This bill excludes financing costs from
reimbursable costs under the program.
Under current law, the first priority for reimbursement under the dry cleaner
environmental response program is reimbursement for immediate action activities
(activities taken within a short time after a discharge occurs or after a discharge is
discovered). After reimbursements for immediate action activities, DNR is required
to give highest priority to paying reimbursements for eligible costs incurred before
October 14, 1997.
This bill requires DNR each year, after paying reimbursements for immediate
action activities, to make a specified portion of the funds available to pay
reimbursements for eligible costs incurred before October 14, 1997, and to use the
rest of the funds to pay reimbursements for costs incurred on or after October 14,
1997.
This bill requires applicants under the dry cleaner environmental response
program to notify DNR of insurance claims made for the costs of cleanup of a dry
cleaner solvent spill and to disclose the amount of insurance proceeds received. The
bill also requires applicants to notify DNR if they intend to file suit against an
insurance company to recover clean-up costs and allows DNR to join a private suit
filed by an applicant against an insurance company for the purpose of recovering
clean-up costs.
Under the dry cleaner environmental response program, the owners of certain
dry cleaning facilities are eligible for reimbursement for the costs of preliminary site
screening and interim remedial equipment to begin the cleanup of dry cleaning
discharges before the completion of full site investigations and cleanup plans. The
reimbursement for preliminary site screening and interim equipment may not
exceed $15,000, of which not more than $2,500 may be for the preliminary site
screening.
Under this bill, the reimbursement for preliminary site screening and interim
remedial equipment is 50% of the eligible costs, but not more than $20,000, of which
not more than $3,000 may be for the cost of the preliminary site screening.
The dry cleaner environmental response program is currently funded from the
dry cleaner environmental response fund, a segregated fund. Under current law,
DNR is authorized under certain circumstances to fund cleanups of hazardous
substance discharges from the environmental fund, another segregated fund.
Under this bill, if DNR funds a cleanup of a discharge of dry cleaning solvent
from the environmental fund, DNR must transfer from the dry cleaner
environmental response fund to the environmental fund an amount equal to the
amount expended from the environmental fund for the cleanup. DNR must make the
transfer when it determines that sufficient funds are available.
Other hazardous substances and environmental cleanup
This bill authorizes a local governmental unit to recover costs it incurs in
cleaning up a property on which a hazardous substance has been discharged if the
local governmental unit acquired the property in one of several specified ways,
including through tax delinquency proceedings or condemnation. The local
governmental unit may recover the costs from a person who possessed or controlled
the hazardous substance at the time that the local governmental unit acquired the
property or who caused the discharge of the hazardous substance, unless the person
is exempt from the requirement to clean up the property under the hazardous
substances spills law.
This bill creates a brownfields site assessment grant program to be
administered by DNR. Under the program, cities, villages, towns, counties,
redevelopment authorities, community development authorities and housing
authorities may apply for a grant to conduct preliminary clean-up activities at
brownfield sites. The grants specifically cover the costs of investigating
environmental contamination, demolishing structures and removing abandoned
containers and asbestos. Applicants who receive a grant under the program must
contribute matching funds equal to 20% of the grant and are required to pay back the
grant if they receive a loan under the land recycling loan program to conduct the
same clean-up activities.
Currently, under the land recycling loan program, this state provides loans to
cities, villages, towns and counties (political subdivisions) for projects to remedy
environmental contamination at sites owned by political subdivisions where the
environmental contamination has affected, or threatens to affect, groundwater or
surface water. The loans are provided at subsidized interest rates.
This bill provides that recipients of loans under the land recycling loan program
are not required to pay any interest. The bill also makes redevelopment authorities
and housing authorities eligible for loans under the program.
The budget act for each fiscal biennium establishes the present value of the
subsidies that may be provided under the land recycling loan program during that
fiscal biennium. This bill sets the present value of the land recycling loan program
subsidies that may be provided during the 1999-2001 fiscal biennium at $9,400,000.
Under current law, the department of commerce regulates tanks that store
flammable and combustible liquids. This bill requires the department of commerce
also to regulate tanks that store liquids that are considered hazardous substances
under the federal Superfund Act. Under current law, the department of commerce
collects a $100 groundwater fee for plan review and approval for tanks that store
flammable and combustible liquids and that have a capacity of 1,000 gallons or more.
Under this bill, the groundwater fee also applies to plan review of tanks that store
liquids that are considered hazardous substances under the federal Superfund Act
and that have a capacity of 1,000 gallons or more.
Water quality
Under the clean water fund program, this state currently provides financial
assistance for projects for controlling water pollution, including sewage treatment
plants. One form of financial assistance provided is a loan at a subsidized interest
rate. The budget act for each fiscal biennium establishes the present value of the
subsidies that may be provided under the clean water fund program during that
fiscal biennium. This bill sets the present value of the clean water fund program
subsidies that may be provided during the 1999-2001 fiscal biennium at
$87,400,000.
Currently, under the safe drinking water loan program, this state provides
loans to local governmental units for projects for the construction or modification of
public water systems. The loans are provided at subsidized interest rates. The
budget act for each fiscal biennium establishes the present value of the subsidies that
may be provided under the safe drinking water loan program during that fiscal
biennium. This bill sets the present value of the safe drinking water loan program
subsidies that may be provided during the 1999-2001 fiscal biennium at $5,200,000.
Under current law, the state is authorized to contract public debt in an amount
not to exceed $12,130,000 to fund the safe drinking water loan program. This bill
increases that amount to an amount not to exceed $16,000,000.
One form of assistance that the clean water fund program, the safe drinking
water program and the land recycling loan program provide is a loan at a subsidized
interest rate. Another form of assistance is a payment to the board of commissioners
of public lands to reduce interest payments on a loan from the board for a project that
is eligible for assistance under one of the programs.
This bill provides that a payment to the board of commissioners of public lands
under the clean water fund program, the safe drinking water loan program or the
land recycling loan program may not exceed the amount of subsidy necessary to
provide the loan directly under the clean water fund program, the safe drinking
water loan program or the land recycling loan program.
Under current law, DNR, in conjunction with the department of agriculture,
trade and consumer protection (DATCP), the land and water conservation board
(LWCB) and local governmental units, administers a program to provide financial
assistance for measures to reduce water pollution from nonpoint (diffuse) sources.
Current law authorizes the issuance of general obligation bonds as one source of
funding for the financial assistance under the nonpoint source program. This bill
increases the bonding authority for the nonpoint source program from $34,363,600
to $48,763,600.
