BILL REQ. #:  H-1385.2 

Read first time 02/07/2005.   Referred to Committee on Financial Institutions & Insurance.

     AN ACT Relating to assisting the economic development of underserved rural communities by assisting an owner or operator that has discontinued using an underground petroleum storage tank; amending RCW 70.148.120 and 70.148.020; making an appropriation; and providing an expiration date.

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

Sec. 1   RCW 70.148.120 and 1991 c 4 s 1 are each amended to read as follows:
     The legislature recognizes as a fundamental government purpose the need to protect the environment and human health and safety. To that end the state has enacted laws designed to limit and prevent environmental damage and risk to public health and safety caused by underground petroleum storage tank leaks. Because of the costs associated with compliance with such laws and the high costs associated with correcting past environmental damage, many owners and operators of underground petroleum storage tanks have discontinued the use of or have planned to discontinue the use of such tanks. As a consequence, isolated communities face the loss of their source of motor vehicle fuel and face the risk that the owner or operator will have insufficient funds to take corrective action for pollution caused by past leaks from the tanks. In particular, rural communities face the risk that essential emergency, medical, fire and police services may be disrupted through the diminution or elimination of local sellers of petroleum products and by the closure of underground storage tanks owned by local government entities serving these communities.
     The legislature also recognizes as a fundamental government purpose the need to preserve a minimum level of economic viability in rural communities so that public revenues generated from economic activity are sufficient to sustain necessary governmental functions. The closing of local service stations adversely affects local economies by reducing or eliminating reasonable access to fuel for agricultural, commercial, recreational, and transportation needs.
     The legislature intends to assist small communities within this state by authorizing:
     (1) Cities, towns, and counties to certify that a local private owner or operator of an underground petroleum storage tank meets a vital local government, public health or safety need thereby qualifying the owner or operator for state financial assistance in complying with environmental regulations and assistance in taking needed corrective action for existing tank leaks; and
     (2) Local government entities to obtain state financial assistance to bring local government underground petroleum storage tanks into compliance with environmental regulations and to take needed corrective action for existing tank leaks.

Sec. 2   RCW 70.148.020 and 1999 c 73 s 1 are each amended to read as follows:
     (1) The pollution liability insurance program trust account is established in the custody of the state treasurer. All funds appropriated for this chapter and all premiums collected for reinsurance shall be deposited in the account. Expenditures from the account shall be used exclusively for the purposes of this chapter including payment of costs of administering the pollution liability insurance and underground storage tank community assistance programs. Expenditures for payment of administrative and operating costs of the agency are subject to the allotment procedures under chapter 43.88 RCW and may be made only after appropriation by statute. ((No)) The director or director's designee may authorize expenditures from the account. An appropriation ((is required)) may be made for other expenditures from the account.
     (2) Each calendar quarter, the director shall report to the insurance commissioner the loss and surplus reserves required for the calendar quarter. The director shall notify the department of revenue of this amount by the fifteenth day of each calendar quarter.
     (3) Each calendar quarter the director shall determine the amount of reserves necessary to fund commitments made to provide financial assistance under RCW 70.148.130 to the extent that the financial assistance reserves do not jeopardize the operations and liabilities of the pollution liability insurance program. The director shall notify the department of revenue of this amount by the fifteenth day of each calendar quarter. The director may immediately establish an initial financial assistance reserve of five million dollars from available revenues. The director may not expend more than fifteen million dollars for the financial assistance program.
     (4) This section expires June 1, ((2001 [2007])) 2007.

Sec. 3   RCW 70.148.130 and 1991 c 4 s 2 are each amended to read as follows:
     (1) Subject to the conditions and limitations of RCW 70.148.120 through 70.148.170, the director shall establish and manage a program for providing financial assistance to public and private owners and operators of underground storage tanks who have been certified by the governing body of the county, city, or town in which the tanks are located as meeting a vital local government, public health or safety need. In providing such financial assistance the director shall:
     (a) Require owners and operators, including local government owners and operators, to demonstrate serious financial hardship;
     (b) Limit assistance to only that amount necessary to supplement applicant financial resources;
     (c) Limit assistance to no more than one hundred fifty thousand dollars in value for any one underground storage tank site of which amount no more than seventy-five thousand dollars in value may be provided for corrective action; and
     (d) Whenever practicable, provide assistance through the direct payment of contractors and other professionals for labor, materials, and other services.
     (2)(a) Except as otherwise provided in RCW 70.148.120 through 70.148.170, no grant of financial assistance may be used for any purpose other than for corrective action and repair, replacement, reconstruction, and improvement of underground storage tanks and tank sites. If at any time prior to providing financial assistance or in the course of providing such assistance, it appears to the director that corrective action costs may exceed seventy-five thousand dollars, the director may not provide further financial assistance until the owner or operator has developed and implemented a corrective action plan with the department of ecology.
     (b) A grant of financial assistance may also be made to an owner or operator that has discontinued using underground petroleum storage tanks due to economic hardship. An owner or operator may receive a grant up to one hundred fifty thousand dollars per retailing location if:
     (i) The property is located in an underserved rural area;
     (ii) The property was previously used by a private owner or operator to provide motor vehicle fuel; and
     (iii) The property is at least ten miles from the nearest motor vehicle fuel service station.
     (3) When requests for financial assistance exceed available funds, the director shall give preference to providing assistance first to those underground storage tank sites which constitute the sole source of petroleum products in remote rural communities.
     (4) The director shall consult with the department of ecology in approving financial assistance for corrective action to ensure compliance with regulations governing underground petroleum storage tanks and corrective action.
     (5) The director shall approve or disapprove applications for financial assistance within sixty days of receipt of a completed application meeting the requirements of RCW 70.148.120 through 70.148.170. The certification by local government of an owner or operator shall not preclude the director from disapproving an application for financial assistance if the director finds that such assistance would not meet the purposes of RCW 70.148.120 through 70.148.170.
     (6) The director may adopt all rules necessary to implement the financial assistance program and shall consult with the technical advisory committee established under RCW 70.148.030 in developing such rules and in reviewing applications for financial assistance.

NEW SECTION.  Sec. 4   The sum of one million dollars, or as much thereof as may be necessary, is appropriated from the pollution liability insurance program trust account for the biennium year ending July 1, 2007, to carry out the purposes of RCW 70.148.130(2)(b). The director or director's designee shall administer the distribution of these funds. A maximum of ten percent of the funds appropriated may be used for administrative costs associated with the program.

NEW SECTION.  Sec. 5   Sections 1 and 3 of this act expire June 1, 2007.