HOUSE BILL REPORT
HB 1967
BYRepresentatives Rust, Walker, Unsoeld, May, Jacobsen, Brekke, D. Sommers and Schoon
Regulating owners and operators of underground storage tanks.
House Committe on Environmental Affairs
Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. (12)
Signed by Representatives Rust, Chair; Valle, Vice Chair; Brekke, Ferguson, Jesernig, Lux, Pruitt, Schoon, D. Sommers, Sprenkle, Unsoeld and Walker.
House Staff:Tim Burke (786-7103)
AS REPORTED BY COMMITTEE ON ENVIRONMENTAL AFFAIRS
FEBRUARY 4, 1988
BACKGROUND:
Leaking underground storage tanks are a serious threat to water resources within this state, as well as nationally. This problem is addressed under a federal law which comprehensively regulates the use of underground storage tanks by providing for the detection and prevention of leaking or faulty tanks and for cleaning up of sites contaminated by tank leaks. It also is addressed by provisions in Initiative 97 and the legislative alternative, both of which generally provide for cleaning up contaminated sites and impose the duty or costs of cleanup on the tank owners and on other specified parties.
Both the Initiative and the alternative authorize the Department of Ecology to carry out the state programs authorized under the federal law regulating underground storage tanks. If the department should adopt regulations to do so and if the regulations are approved by the federal Environmental Protection Agency, then the state will administer the comprehensive program specified in the federal law.
With some exceptions, the federal law requires owners of underground tanks containing petroleum products to maintain proof of financial responsibility in the amount of $1 million to pay for the costs of cleaning up leaks and for personal injuries and property damage. The Environmental Protection Agency is in the process of adopting regulations to implement this requirement.
Generally, liability insurance to cover leaks from underground storage tanks containing petroleum products is not available in this state. This is because the private carriers have concluded that the risks are either not determinable or too great to insure. Because independent gasoline service station operators are unable to obtain this insurance, they are without means to conform to the federal financial responsibility law. The unavailability of insurance also makes it very difficult for service station operators to obtain business loans.
SUMMARY:
SUBSTITUTE BILL: The Department of Ecology is directed to conduct a study on the possible methods of implementing a state storage tank law that conforms to federal requirements. The department is authorized to adopt an annual fee, not exceeding $75, on the owners of tanks subject to the federal law. The fee income will be used to pay for the study and other programs related to storage tanks.
A state risk retention group is created within the Department of General Administration. The group will make liability insurance available to the owners or operators of underground storage tanks containing gasoline or other kinds of petroleum products. Insurance policies could not be sold by the group unless the Insurance Commissioner first reviews the insurance plan and determines that the program would be operated on an actuarially sound basis.
The Director of General Administration is required to periodically examine the financial condition of the risk retention group program; and should the director determine that premium income is insufficient to pay for the present and projected claims, then a temporary two-tenths of one percent excise tax will be imposed on the first possession of petroleum products. The tax revenues will be used to eliminate the shortfall in premium income.
The Director of the Department of Ecology is required to appoint an eleven member advisory committee which would render advise on the storage tank study and on the establishment of the risk retention group program.
SUBSTITUTE BILL COMPARED TO ORIGINAL: The original bill established a program to implement the requirements of the federal Resource Conservation and Recovery Act's underground storage tank program. This program included the adoption of tank performance standards and monitoring requirements, the establishment of a state fund to assume liability for cleanups in excess of $100,000 and for bodily injury and property damage in excess of $300,000, and the creation of a risk retention pool to insure liability below these amounts. These provisions have been deleted, and instead the substitute bill: (1) Directs the Department of Ecology to conduct a study of the possible methods of implementing a state storage tank law that conforms to federal requirements; (2) Establishes a risk retention group in the Department of General Administration to provide liability insurance to owners and operators of underground storage tanks; and (3) Authorizes the imposition of a temporary two-tenths of one percent excise tax on petroleum products when premium income is insufficient to pay for claims.
Appropriation: A general fund appropriation of $200,000 is made to the Department of Ecology for the purpose of conducting the storage tank study, and a general fund appropriation of $150,000 is made to the Department of General Administration for the initial costs attributable to the risk retention group program. The treasurer is directed to pay back these appropriations by depositing in the general fund an amount of tank fee and premium income equal to the appropriations.
Fiscal Note: Requested February 4, 1988.
House Committee ‑ Testified For: Gary Smith; Tim Hamilton; Don Wessels, Washington Petroleum Marketers.
House Committee - Testified Against: None Presented.
House Committee - Testimony For: Recent amendments to federal law require small businesses that have petroleum tanks to have at least $1 million of insurance to clean up potential leaks. This bill is necessary to address this problem and ensure that small businesses are not put out of business.
House Committee - Testimony Against: None Presented.