H-1029

AN ACT Relating to retail heating oil dealers; and adding a new chapter to Title 43 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. The legislature finds that it is in the best interest of all residents to safely operate oil heat tanks and expeditiously deal with tank leaks or spills. The legislature further finds that the heating oil tanks of oil-heated homes are susceptible to corrosion because of the soil conditions of Washington, tank construction, and tank operation. The legislature further finds that it is necessary to protect homeowners from the financial hardship related to damaged oil heat tanks and to address legitimate third-party claims caused by leaking tanks, and directs the oil heat commission of Washington to provide a pollution insurance safety net for the oil-heated homeowners of Washington. The problem is especially acute because home heating oil dealers are primarily small businesses that do not have the financial capital available to assist with environmental protection. Therefore, the legislature finds that the best solution to this problem is to allow the oil heat dealers of Washington to join together to create the oil heat commission of Washington, to tax themselves in order to create a fund for the purpose of cleaning up any spill resulting from a damaged tank, and replacing or repairing those damaged tanks.

NEW SECTION. Sec. 2. This chapter may be known and cited as the Washington state oil heat commission act.

NEW SECTION. Sec. 3. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Commission" means the Washington state oil heat commission.

(2) "Director" means the director of the Washington state pollution liability insurance agency or the director's duly appointed representative.

(3) "Pollution liability insurance agency" means the Washington state pollution liability insurance agency.

(4) "Person" includes an individual, firm, corporation, trust, association, partnership, society, or other organization of individuals.

(5) "Heating oil" means number one and two heating oil for use in oil-fired furnaces, heaters, and boilers for space heating. It does not include heating for industrial processing or generation of electrical energy.

(6) "Oil dealer" means a person who handles, ships, buys, or sells heating oil.

(7) "Affected dealer" means a person who sells heating oil in commercial quantity in Washington.

(8) "Affected unit" means one gallon of heating oil.

(9) "Commercial quantity" means five thousand gallons or more of heating oil sold in any calendar year by any oil dealer.

(10) "Fiscal year" means the twelve-month period beginning July 1st of a year and ending the following June 30th, both dates being inclusive.

(11) "Heating oil tank" means a tank of one thousand one hundred gallons or less, which is above or below ground with pipes connected to the tank for heating human living or working space on the premises where stored, and is in continuous operation. It does not include decommissioned or abandoned heating oil tanks, or tanks used solely for commercial or industrial process heating purposes.

(12) "Release" means a spill, leak, emission, escape, or leaching into the environment.

(13) "Remedial action" means those actions consistent with a permanent action taken in the event of the release of heating oil from a heating oil tank into the environment, and includes:

(a) Actions at the location of the release such as: (i) storage or confinement; (ii) perimeter protection using dikes, trenches, ditches, clay cover, or neutralization; (iii) cleanup of released heating oil from a heating oil tank and associated contaminated materials; (iv) recycling, reuse, diversion, destruction, or segregation of reactive wastes; (v) collection of leachate and runoff; (vi) on-site treatment or incineration; (vii) security fencing or other measures to limit access; (viii) provision of alternative drinking and household water supplies; (ix) temporary evacuation and housing of threatened individuals; and (x) any monitoring reasonably required to assure that such actions protect the public health, safety, welfare, and environment;

(b) Off-site transport and off-site storage, treatment, destruction, or secure disposition of heating oil released from a heating oil tank and associated contaminated materials;

(c) Those actions as may be necessary to monitor, assess, evaluate, or investigate a release of heating oil from a heating oil tank; and

(d) Repairing an existing leaking heating oil tank or installation of a new tank to replace a leaking tank.

(14) "Remedial action costs" means reasonable costs which are attributable to or associated with a remedial action.

(15) "Third-party liability" means the liability of an oil heat tank owner to another person or persons resulting in property damage or personal injury from a leak or spill.

NEW SECTION. Sec. 4. The Washington oil heat commission is hereby established to provide and promote the health, safety, and welfare of the oil heat customers in Washington. To carry out these purposes, the commission may establish a program to address claims made by a heating oil tank owner or an affected person or persons for remedial action costs that have accrued due to a release from the owner's heating oil tank, which has been in continuous service prior to the release, and provide for reimbursement of costs of remedial actions performed under this chapter that meet the clean-up standards and requirements established under the model toxics control act, chapter 70.105D RCW.

NEW SECTION. Sec. 5. In an effort to address and acknowledge the differences in remedial action between western Washington and eastern Washington, the state will be divided into seven districts. The districts shall administer the funds derived from those districts for remedial action and third-party liability purposes in those districts. The entire commission shall be responsible for the general administrative expenses of the commission proportionate to the assessments collected from each side of the state.

(1) For the purposes of this chapter, Washington is initially divided into seven districts as follows:

(a) District one includes the counties of Clallam, Clark, Cowlitz, Grays Harbor, Jefferson, Kitsap, Lewis, Mason, Pacific, Skamania, and Wahkiakum;

(b) District two includes the county of King;

(d) District four includes the counties of Pierce and Thurston;

(e) District five includes the counties of Chelan, Douglas, Ferry, Grant, Kittitas, Lincoln, Okanogan, Pend Orielle, and Stevens;

(f) District six includes the counties of Adams, Asotin, Benton, Columbia, Franklin, Garfield, Klickitat, Walla Walla, Whitman, and Yakima; and

(g) District seven includes the county of Spokane.

(2) The boundaries of the commission districts shall be maintained in a manner that assures each oil dealer representation in the commission which is reasonably equal with the representation afforded all other oil dealers by their commission members.

NEW SECTION. Sec. 6. (1) The oil heat commission is established to administer this chapter and is composed of ten members, eight of whom shall be affected oil dealers selected as provided in this section, and two of whom shall be affected oil heat customers, one from each side of the Cascade mountains, selected by the commissioners representing those areas. In addition, the director of the pollution liability insurance agency, or the director's duly appointed representative, shall be an ex officio, nonvoting member.

(2) The director shall establish a list of affected oil dealers. To identify affected dealers for this list, the director shall consult: The Oil Heat Institute of Washington, the Inland Empire Oil Heat Institute, and Oil Fuel Dealer's Credit Association, Inc., other associations for their membership lists, the Yellow Pages, other directories, and such other sources as the director deems prudent.

(3) The state shall initially be divided into seven districts and each district shall have the designated number of commission members set forth below. Each district shall nominate at least as many nominees as there are designated members for that district, or more, but elect only the designated number of commission members.

(a) District one shall have one representative;

(b) District two shall have two representatives;

(d) District four shall have one representative;

(e) District five shall have one representative;

(f) District six shall have one representative; and

(g) District seven shall have one representative.

(4) Commission members shall be residents of this state and over the age of twenty-five years. With the exception of the public members, oil dealer members of the commission shall sell oil in the district where they are nominated and elected. Oil dealer members of the commission must have been actively selling heating oil within Washington for a period of five or more continuous years, and during that time have derived a substantial portion of his or her income therefrom, and is an owner of the business, or corporate officer if the dealer is incorporated, or manager if the dealer is a cooperative. To serve on the commission, the person representing an oil dealer member must provide documentation showing that he or she has been authorized by the affected dealer. The required qualifications of oil dealer members of the commission, as provided for in this section, are applicable to the members throughout their term in office.

(5) The term of office of a commission member is three years from the date of his or her election, and until a qualified successor is elected. One-third of the membership, or as close to that number as possible, shall be elected each year. No elected individual member of the board may serve more than two consecutive three-year terms. The terms of office for the initial commission members shall be drawn by lot for one, two, or three years.

(6) In the event of a vacancy on the commission, the remaining elected members shall select a qualified person from within the vacated district to fill the unexpired term.

(7) A majority of the members shall constitute a quorum for the transaction of all business and the carrying out of all duties of the board.

(8) No member of the commission shall receive any salary or other compensation, but each member shall be reimbursed for actual subsistence and traveling expenses incurred due to attendance of meetings or other board activities. However, such expenses shall be authorized by resolution, and by unanimous approval of the commission at a regular meeting.

(9) The commission shall have the responsibility of carrying out the purposes of this chapter in compliance with all laws and rules governing its activities.

(10) The commission shall reimburse the director for the necessary costs of conducting elections under the provisions of this chapter.

NEW SECTION. Sec. 7. The powers and duties of the commission shall include the following:

(1) Administer and enforce the provisions of this chapter, and doing all acts necessary to effectuate the purposes of this chapter;

(2) Elect a chairperson and other officers as the board deems advisable;

(3) Employ and discharge at its discretion a manager, secretary, agents, attorneys, consultants, companies, organizations, and employees as it deems necessary, and to prescribe their duties and powers, and fix their compensation;

(4) Establish by resolution, a headquarters which shall serve as headquarters until changed by the board. All records, books, and minutes of board meetings shall be kept at headquarters;

(5) Pay only from moneys collected as assessments or advances, the costs arising in connection with the formulation, issuance, administration, and enforcement of activities directly arising from this chapter;

(6) Require a bond of all board members and employees of the board in a position of trust in an amount the board shall deem necessary. The premium for the bond or bonds shall be paid by the board from assessments collected;

(7) Adopt rules of a technical or administrative nature subject to the provisions of chapter 34.05 RCW;

(8) Establish oil heat commission funds, which shall be deposited in a bank or banks or financial institution or institutions, approved for the deposit of state funds, in which all money received by the commission, except an amount of petty cash for each day's needs, shall be deposited daily or as often during the day as advisable. RCW 43.01.050 shall apply to money collected under this chapter;

(9) Prepare a budget or budgets covering anticipated income proportionate to assessments collected in western Washington and eastern Washington. The upper limit for the funds for section 4 of this act shall be set at one and one-half million dollars for districts one through four, and one-half million for districts five through seven, and deposited in the oil heat commission remedial action accounts, as described in section 12 of this act. At this point the assessment may be substantially reduced or discontinued. Once the fund for section 4 of this act drops to seven hundred fifty thousand dollars for districts one through four and to two hundred fifty thousand dollars for districts five through seven, then the assessment will be resumed and the moneys will go back into these accounts until the balance or balances once again reach the upper limit set for each fund;

(10) Keep accurate records of all of its dealings, which shall be open to inspection and audit by the state auditor;

(11) Accept contributions or matching funds from any source for any purpose consistent with the provisions of this chapter;

(12) Cooperate with the department of ecology to develop and administer environmental clean-up programs, and to publish and distribute information as necessary to carry out the purposes of this chapter;

(13) Contract or cooperate with any other local, state, or national commission, organization, or agency, whether voluntary or established pursuant to state or federal law, including recognized oil heat groups, engaged in work or activities similar to the work and activities of the commission created by this chapter. The commission may make contracts and agreements with these organizations or agencies in order to carry out joint programs beneficial to the oil heat industry.

NEW SECTION. Sec. 8. The commission may issue orders for any one or more of the following purposes:

(1) To provide for dissemination of information on the purposes of the commission; and

(2) To provide for the establishment and administration of the oil heat remedial action accounts, as established in section 12 of this act, to pay certain costs associated with remedial action and contract for claims administration.

NEW SECTION. Sec. 9. The commission may adopt rules pursuant to chapter 34.05 RCW as necessary to carry out the provisions of this chapter.

NEW SECTION. Sec. 10. (1) The initial assessment on the oil dealer for heating oil sold shall be set by the commission, and in no event shall the assessment exceed one cent per gallon of affected goods sold.

(2) Before adjusting the initial or revised assessment, the commission shall determine by a referendum whether or not the affected dealers assent to the proposed action, based on the procedure set forth in this section. The director shall conduct the referendum among the affected dealers and the affected dealers shall be deemed to have assented to the proposed assessment or change of assessment if fifty‑one percent or more by number reply to the referendum within the time specified by the director, and if, of those replying, sixty‑five percent or more by number; and sixty percent or more by volume assent to the proposed order. The determination by volume shall be made on the basis of volume of affected units sold by affected dealers. No assessment or change of assessment shall be effective unless the affected dealers have assented as provided in this subsection.

NEW SECTION. Sec. 11. Assessments shall be paid by oil heat dealers as prescribed by rule. A due and payable assessment levied in a specified amount as determined by the commission under section 10 of this act constitutes a personal debt. If a person fails to pay the commission the full amount of the assessment by the date due, the commission may add to the unpaid assessment an amount not exceeding ten percent of the assessment to defray the cost of enforcing its collection. If the person fails to pay a due and payable assessment or other sum, the commission may bring a civil action for collection against the person or persons in a court of competent jurisdiction. The action shall be tried and judgment rendered as in any other cause of action for a debt due and payable.

NEW SECTION. Sec. 12. (1) The oil heat commission remedial action accounts are established separate and distinct from the commission general fund.

(2) The assessments collected and administered under section 6 of this act shall be deposited into the commission general fund and credited to the heating oil remedial action accounts by districts divided between eastern Washington and western Washington.

(3) The commission may invest and reinvest moneys in the account in the manner provided by law with any interest accrued being the sole property of the commission and credited to the commission account.

(4) The moneys in the account are appropriated continuously to the commission to be used as provided in subsection (5) of this section.

(5) Moneys in the account may be used by the commission for the following purposes:

(a) Payment of remedial action costs;

(b) Payment of legitimate third-party liability claims; and

NEW SECTION. Sec. 13. In administering the oil heat commission remedial action account of the commission general fund, the commission may:

(1) Determine and pay claims for remedial action costs;

(2) Reject claims only if they do not comply with the requirements of this chapter;

(3) Disseminate reliable information about avoiding or responding to releases of heating oil from heating oil tanks; and

(4) Enter into contracts which it considers appropriate in order to administer the accounts, including entering into contracts with adjusters to adjust claims for remedial action costs.

NEW SECTION. Sec. 14. The commission, upon receipt of a notice of a release, will furnish to the claimant a form for filing proof of the remedial action estimates.

NEW SECTION. Sec. 15. (1) Written proof of the remedial action costs must be filed with the commission within ninety days of the discovery of the release. Failure to furnish proof within the time required shall not invalidate or reduce any claim if it was not reasonably possible to give estimates within such time, provided estimates are furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one year from the time proof is otherwise required.

(2) After notice of a release and an estimate for cleanup action has been received by the commission, the commission shall order an approval of a claim and reimburse a homeowner for final claim costs.

(3) No person shall willfully conceal or misrepresent any material fact or circumstances concerning a claim for or proof of remedial action costs.

(4) A violation of subsection (3) of this section shall be a basis for a rejection of a claim for remedial action costs.

NEW SECTION. Sec. 16. Any person who has complied with section 15 of this act, but has received less than the full amount of the claim may seek up to the full amount of the claim by filing a demand for a hearing with the commission. The demand shall identify the name and address of the claimant, the date proof of the remedial action costs was filed, and the date of the determination paying the claim, in full or in part, or rejecting the claim. The demand for a hearing must be filed within thirty days of the determination paying the claim, in full or in part, or rejecting the claim.

NEW SECTION. Sec. 17. (1) If timely demand for a hearing is filed, the commission should hold a hearing on the order as provided by RCW 34.05.410. In the absence of a timely demand for a hearing, no person shall be entitled to judicial review of the determination.

(2) After the hearing, the commission shall enter a final order vacating, modifying, or affirming the determination.

NEW SECTION. Sec. 18. A person aggrieved by an order of the commission which has been the subject of a timely application for hearing before the commission shall be entitled to judicial review of the order under chapter 34.05 RCW.

NEW SECTION. Sec. 19. Notwithstanding any other provisions of this chapter, the commission has no obligation to pay any claims for remedial action costs or payment of third-party claims if the moneys in the account are insufficient to pay all of the claims for remedial action costs for which forms of written proof have been filed, but which have not yet been determined, paid, or rejected. The commission may adopt rules providing for the partial payment of claims for remedial action costs whenever the moneys within the account are insufficient.

NEW SECTION. Sec. 20. The director of the pollution liability insurance agency may review all actions of the commission, and by order may invalidate any action of the commission that the director determines is not in the public interest.

NEW SECTION. Sec. 21. Nothing contained in this chapter shall permit the fixing of prices not otherwise permitted by law, or permit any limitation on production.

NEW SECTION. Sec. 22. Nothing contained in this chapter shall authorize any commercial conduct which is prohibited by RCW 19.86.020 through 19.86.060, or be deemed to be an implied repeal of any of those sections of the Revised Code of Washington.

NEW SECTION. Sec. 23. Commission members shall not incur civil liability for actions taken by the commission within the scope and purpose of this chapter.

NEW SECTION. Sec. 24. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 25. Sections 1 through 24 of this act shall constitute a new chapter in Title 43 RCW.