S-1363

AN ACT Relating to oil heat tank pollution liability; and adding a new chapter to Title 70 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 oil heat tanks are susceptible to corrosion because of the soil conditions of Washington state, and due to the age of some tanks. The legislature further finds that it is necessary to protect tank owners from the financial hardship related to damaged oil heat tanks, address legitimate third-party claims caused by leaking tanks, and directs the pollution liability insurance agency of Washington to provide a pollution safety net for the oil heat tank owners of Washington. The problem is especially acute because oil heat tank owners are either unable to obtain pollution insurance or insurance for the tanks is unaffordable. Therefore, the legislature finds that the best solution to this problem is to assess the oil heat dealers of Washington a fee that will fund a program to protect Washington's oil heat customers. The program will create a fiscal safety net within the pollution liability insurance agency for the purpose of cleaning up spills that result from damaged tanks, and replace or repair those damaged tanks.

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

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

(1) "Committee" means the Washington state oil heat advisory committee.

(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: (a) Of one thousand one hundred gallons or less; (b) above or below ground; and (c) 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, nor 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) clean-up 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 run off; (vi) on-site treatment or incineration; (vii) security fencing or other measures to limit access to the location; (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 these 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) Repair of 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 removal or remedial action.

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

NEW SECTION. Sec. 4. (1) The oil heat advisory committee is established to advise the director. The committee is composed of eleven members appointed by the governor for three-year terms, eight of whom shall be affected oil dealers, and two of whom shall be affected oil heat customers, one from each side of the Cascade mountains. The director of the pollution liability insurance agency, or the director's duly appointed representative, is the chair of the committee.

(2) The state is initially divided into seven districts and each district has the designated number of committee members set forth in subsection (3) of this section. Each district shall submit nominations for at least three nominees for that district representative, but only the designated number of committee members will be appointed.

(3) For the purposes of this chapter, districts and the advisory committee are to be comprised as follows:

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

(b) District two includes the county of King and has two representatives;

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

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

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

(g) District seven includes the county of Spokane and has one representative.

(4) Committee members shall be residents of this state over the age of twenty-five years. With the exception of the public members, oil dealer members of the committee shall sell oil in the district from which they are appointed. Oil dealer members of the committee 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 their 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. In order to be appointed by the governor to serve on the committee, the person representing an oil dealer member must provide documentation showing that he or she has been authorized by the affected dealer.

(5) In the event of a vacancy on the committee, the governor shall select a qualified person from within the vacated district to fill the unexpired term.

(6) No member of the committee shall receive any salary or other compensation, but each member shall be reimbursed for actual subsistence and travelling expenses incurred due to attendance of meetings or other committee activities. Such expenses shall be authorized by the director.

NEW SECTION. Sec. 5. The powers and duties of the advisory committee include providing technical assistance to the director on matters pertaining to the oil heat industry.

NEW SECTION. Sec. 6. The director shall:

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

(2) Administer the oil heat pollution liability fund, as established under section 7 of this act, to enable the fund to pay for costs associated with remedial action and to contract for claims administration;

(3) Employ and discharge at his or her discretion agents, attorneys, consultants, companies, organizations, and employees as deemed necessary, and to prescribe their duties and powers, and fix their compensation;

(4) 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;

(5) Adopt rules of a technical or administrative nature pursuant to chapter 34.05 RCW as necessary to carry out the provisions of this chapter;

(6) Establish an accounting procedure that will enable proceeds from the oil heat liability pollution fund to be distributed by districts, and dividing the state between districts one through four and districts five through seven;

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

(8) 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; and

(9) Contract and 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 created by this chapter. The director 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. 7. (1) The oil heat pollution liability fund is created in the custody of the state treasurer. All receipts from the tax imposed under section 13 of this act shall be deposited into the fund. Expenditures from the fund may be used only for the purposes set out under this chapter. Only the director of the Washington state pollution liability insurance agency or the director's designee may authorize expenditures from the fund. The fund is subject to allotment procedures under chapter 43.88 RCW, but no appropriation is required for expenditures. The earnings on any surplus balances in the oil heat pollution liability fund shall be credited to the fund notwithstanding RCW 43.84.090.

(2) The tax assessments collected and administered under section 13 of this act shall be deposited into the oil heat pollution liability fund, and the director shall credit moneys to the districts divided between districts one through four and districts five through seven.

(3) The upper limit for the oil heat pollution liability fund, set out under subsection (1) of this section, is two million dollars. One million five hundred thousand dollars is set out for districts one through four, and five hundred thousand dollars is set out for districts five through seven. Once the fund reaches the upper limit, the tax assessments may be reduced or discontinued. When the fund balance falls to one million dollars, then the tax assessments will resume and the moneys will be deposited in the fund until the balance once again reaches the upper limit set for the fund.

(4) The money in the fund is continuously appropriated for the uses provided for under subsection (5) of this section.

(5) Money in the fund may be used by the director for the following purposes:

(a) Payment of remedial action costs;

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

NEW SECTION. Sec. 8. In administering the oil heat pollution liability fund, the director 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 considered appropriate in order to administer the fund, including entering into contracts with adjusters to adjust claims for remedial action costs.

NEW SECTION. Sec. 9. (1) The director, upon receipt of a notice of a release, will furnish to the claimant a form for filing proof of the remedial action estimates.

(2) Written proof of the remedial action cost estimates must be filed with the director 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 that 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.

(3) After notice of a release and an estimate for clean-up action has been received by the director, the director shall determine approval and amount of a claim and reimburse a tank owner for final claim costs.

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

(5) A violation of subsection (4) of this section is a basis for a rejection of a claim for remedial action costs.

NEW SECTION. Sec. 10. (1) A person who has complied with section 9 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 director. The demand shall identify the name and address of the claimant, the date that 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.

(2) If timely demand for a hearing is filed, the director 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.

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

NEW SECTION. Sec. 11. A person aggrieved by a decision of the director that has been the subject of a timely application for hearing before the director shall be entitled to judicial review of the decision under chapter 34.05 RCW.

NEW SECTION. Sec. 12. Notwithstanding any other provisions of this chapter, the director has no obligation to pay any claims for remedial action costs or payment of third-party claims if the moneys in the fund 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 director may adopt rules providing for the partial payment of claims for remedial action costs whenever the moneys within the fund are insufficient. These rules are applicable until funds are available to pay the balance of all claims.

NEW SECTION. Sec. 13. (1) A tax is imposed on the affected heating oil dealers in this state. The tax shall not exceed one-half cent per gallon of an affected unit sold. The director shall set the initial tax assessment on the affected dealers. The director shall consult with the advisory committee before adjusting the initial or revised tax assessment.

(2) Moneys collected under subsection (1) of this section shall be deposited in the oil heat pollution liability fund established under section 7 of this act.

NEW SECTION. Sec. 14. 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. 15. Nothing contained in this chapter shall authorize any commercial conduct which is prohibited by RCW 19.86.020 through 19.86.060, and no section of this chapter shall be deemed to be an implied repeal of any of those sections of the Revised Code of Washington.

NEW SECTION. Sec. 16. 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. 17. Sections 1 through 16 of this act shall constitute a new chapter in Title 70 RCW.