HB 5115

HOUSE BILL NO. 5115
A bill to amend 1994 PA 451, entitled
"Natural resources and environmental protection
act,"
by amending sections 21502, 21503, 21506a, 21506b,
21510, 21510a, 21510d, 21515, 21516, 21518, 21519, 21519a, 21521, 21524, and
21548 (MCL 324.21502, 324.21503, 324.21506a, 324.21506b, 324.21510, 324.21510a,
324.21510d, 324.21515, 324.21516, 324.21518, 324.21519, 324.21519a, 324.21521,
324.21524, and 324.21548), sections 21502, 21503, 21510, 21510a, 21515, 21516,
and 21521 as amended by 2016 PA 380, sections 21506a and 21510d as amended and section
21519a as added by 2017 PA 134, and section 21506b as added and sections 21518,
21519, 21524, and 21548 as amended by 2014 PA 416; and to repeal acts and parts
of acts.
the people of the state of michigan enact:
Sec. 21502. As used in this part:
(a)
"Administrator" means the administrator of the authority as provided
for in section 21525.
(b)
"Affiliate" means a person that directly, or indirectly through 1 or
more intermediaries, controls the person specified.
(c) "Approved
claim" means a claim that is approved pursuant
to under section 21510.
(d)
"Authority" means the underground storage tank authority created in
section 21523.
(e) "Board of
directors" or "board" means the board of directors of the
authority.
(f) "Bond
proceeds account" means the account within the fund to which proceeds of
bonds or notes issued under this part have been credited.
(g) "Bonds or
notes" means the bonds, notes, commercial paper, other obligations of
indebtedness, or any combination of these, issued by the finance authority pursuant to in accordance
with this part.
(h) "Bulk
transfer" means a transfer of refined petroleum or a refined petroleum
product from, or purchase for resale by, a refiner, pipeline terminal operator,
supplier, or marine terminal operator to or from another refiner, pipeline
terminal operator, supplier, or marine terminal operator through pipeline
tender or marine delivery, including pipeline movements of refined petroleum or
a refined petroleum product from 1 or more marine vessel movements of refined
petroleum or a refined petroleum product. Refined petroleum or a refined
petroleum product in a refinery, pipeline, terminal, or marine vessel
transporting refined petroleum or a refined petroleum product to a refinery or
terminal is in the bulk transfer terminal system. Notwithstanding anything to
the contrary in this subdivision, refined petroleum or a refined petroleum
product transferred or purchased for resale by a refiner, pipeline terminal
operator, supplier, or marine terminal operator must be delivered to or
otherwise remain within the bulk transfer terminal system prior to before removal
across the rack in order to constitute a bulk transfer.
(i) "Bulk
transfer terminal system" means the refined petroleum or refined petroleum
product distribution system consisting of refineries, pipelines, marine
vessels, and terminals and includes refined petroleum or refined petroleum
product storage tanks and refined petroleum or refined petroleum product
storage facilities that are part of a refinery, boat terminal transfer, or
terminal owned, operated, or controlled by a refiner, marine terminal operator,
or pipeline terminal operator.
(j)
"Claim" means the submission by the owner or operator or his the owner's or
her operator's representative
of documentation on an application requesting payment by the authority. A claim
shall must include,
at a minimum, a completed and signed claim form and the name, address, and
telephone number of the owner or operator.
(k) "Claimant" means a person to whom an approved claim is
assigned or transferred.
(l) (k)
"Claims "Claim limit" means $1,000,000.00 per
release. Two or more claims arising out of the same, interrelated, associated,
repeated, or continuous releases or a series of related releases shall be
subject to 1 claims limit. Any claim that takes place over 2 or more claim
periods shall be subject to 1 claims limit.minus
the appropriate deductible amount.
(m) (l) "Claim period" means a 1-year period commencing on beginning October
1 of each year and ending on September 30 the following year.
(n) (m) "Claim
period aggregate limit" means the following aggregate claims limit for all
releases discovered during a claim period:
(i) For owners, operators, and affiliates of
1 to 100 refined petroleum underground storage tanks
located in this state, $1,000,000.00.
(ii) For owners, operators, and affiliates of
more than 100 refined petroleum underground storage tanks located in this state, $2,000,000.00.
(o) "Closure" means department approval of a closure report
for a release covered by an approved claim in accordance with section 21315.
Closure includes approval of a closure report with conditions after the
conditions are met.
(p) "Confirmed release" means a release of refined petroleum
that is reported to the department of licensing and regulatory affairs on a
form created by the department of licensing and regulatory affairs and
designated on the form as a confirmed release.
(q) (n) "Controls"
means the possession or the contingent or noncontingent right to acquire
possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of a person, whether through the ownership of
voting securities or interests, by contract, other than a commercial contract
for goods or nonmanagement services, by pledge of securities, or otherwise,
unless the power is the result of an official position with or corporate office
held by the person.
(r) (o) "Corrective
action" means that term as it is defined
in section 21302.
(s) (p) "Deductible
amount" means the amount of corrective action costs or indemnification
costs that are required to be paid by an owner or
operator a claimant as provided in
section 21510a.
(t) (q) "Department"
means the department of environmental quality.environment, Great Lakes, and energy.
(u) (r) "Eligible
person" means an owner or operator who that meets the eligibility requirements under this
part to submit a claim.
(s) "Excluded liquid" means that term as defined in
26 CFR 48.4081-1.
(v) "Federally recognized tribe" means a Native American
tribal entity that is recognized as having a government-to-government
relationship with the United States, that has the responsibilities, powers,
limitations, and obligations attached to that designation, and that is eligible
for funding and services from the federal government.
(w) (t) "Finance
authority" means the Michigan finance authority created by Executive
Reorganization Order No. 2010-2, MCL 12.194.
(x) (u) "Financial
responsibility requirements" means the financial responsibility for taking
corrective action and for compensating third parties for bodily injury and
property damage caused by a release from a refined petroleum underground
storage tank system that the owner or operator of a refined petroleum
underground storage tank system must demonstrate under part 211 and the rules
promulgated under that part.
(y) (v) "Fund"
means the underground storage tank cleanup fund created in section 21506b and
includes the bond proceeds account established within the fund.
(z) (w) "Indemnification"
means indemnification of an owner or operator a claimant for a legally enforceable judgment entered
against the owner or operator claimant by a third party, or a legally enforceable
settlement entered between the owner or operator claimant and a third party, compensating that third
party for bodily injury or property damage, or both, caused by an accidental
release. as As used in this subdivision, "accidental release",
"bodily injury", and "property damage" mean those
terms are as defined
in R 29.2163 of the Michigan Administrative Code.
(aa) (x) "Location"
means a parcel of property where refined petroleum underground storage tank
systems are registered pursuant to in accordance with part 211.
(bb) (y) "Marine
terminal operator" means a person that stores refined petroleum or a
refined petroleum product at a boat terminal transfer.
(cc) (z) "Operator"
means that term as it is defined in section
21303 or a person to whom an approved claim has been assigned or transferred.
(dd) (aa) "Owner"
means that term as it is defined in section
21303.
(bb) "Oxygenate" means an organic compound
containing oxygen and having properties as a fuel that are compatible with
petroleum, including, but not limited to, ethanol, methanol, or methyl tertiary
butyl ether (MTBE).
Sec. 21503. As used in this part:
(a)
"Person" means an individual, partnership, corporation, association,
governmental entity, or other legal entity.
(b) "Pipeline
terminal operator" means a person that receives and stores refined
petroleum or a refined petroleum product in tanks and other equipment used in
receiving and storing refined petroleum or a refined petroleum product from
interstate and intrastate pipelines, pending wholesale bulk reshipment.
(c) "Qualifying expenditures" means an expenditure
for a specific activity that does not exceed the allowable payment for that
activity as detailed on the schedule of costs.
(c) (d) "Rack"
means a mechanism for delivering refined petroleum or a refined petroleum
product from a refiner, a pipeline terminal
operator, or a marine terminal operator into
a railroad tank car, a transport truck, a tank wagon, or the fuel supply tank of a marine
vessel.
(d) (e) "Refined
petroleum" means aviation gasoline, middle
distillates, jet fuel, kerosene, gasoline, residual oils, and any oxygenates
that have been blended with any of these. Refined petroleum includes refined
petroleum products and transmix. Refined petroleum does not include excluded
liquids.any liquid subject to the regulatory
fee.
(e) (f) "Refined
petroleum fund" means the refined petroleum fund established under section
21506a.
(f) (g) "Refined
petroleum underground storage tank" means an underground storage tank
system used for the storage of refined petroleum.
(g) (h) "Refiner"
means a person that meets both of the following:
(i) Manufactures or produces refined
petroleum or a refined petroleum product at a refinery.
(ii) Is a taxable fuel registrant that is a
refiner for purposes of 26 CFR 48.4081-1.
(h) (i) "Refinery"
means a facility used by a refiner to produce refined petroleum or a refined
petroleum product from crude oil, unfinished oils, natural gas liquids, or
other hydrocarbons by any process involving substantially more than the
blending of refined petroleum and from which refined petroleum or a refined
petroleum product may be removed by pipeline or marine vessel or at a rack.
(i) (j) "Regulated
financial institution" means a state or nationally chartered bank, savings
and loan association or savings bank, credit union, or other state or federally
chartered lending institution or a regulated affiliate or regulated subsidiary
of any of these entities.
(j) (k) "Regulatory
fee" means the environmental protection regulatory fee imposed under
section 21508.
(k) (l) "Release" means that term as it is defined in section 21303.
(l) (m) "Removal" or "removed"
means a physical transfer other than by evaporation, loss, or destruction of
refined petroleum or a refined petroleum product from a refiner, pipeline
terminal operator, or marine terminal operator.
(m) (n) "Schedule
of costs" means the list of allowable reimbursement amounts that may be
paid on a claim, as established in section 21510b.
(n) (o) "Site"
means that term as it is defined in section
21303.
(o) (p) "Supplier"
means a supplier or permissive supplier licensed under the motor fuel tax act,
2000 PA 403, MCL 207.1001 to 207.1170.
(p) (q) "Tank
wagon" means a straight truck having 1 or more compartments other than the
fuel supply tank designed or used to carry fuel.
(q) (r) "Terminal"
means a refined petroleum or refined petroleum products storage and
distribution facility that meets all of the following requirements:
(i) Is registered as a qualified terminal by
the internal revenue service.Internal Revenue Service.
(ii) Is supplied by a pipeline or a marine
vessel.
(iii) Has a rack from which refined petroleum
or refined petroleum products may be removed.
(s) "Transmix" means the mixed product that results
from the buffer or interface of 2 different products in a pipeline shipment, or
a mixture of 2 different products within a refinery or terminal that results in
an off-grade mixture.
(r) (t) "Transport
truck" means a semitrailer combination rig designed or used for the
purpose of transporting refined petroleum or a refined petroleum product over
the public roads or highways.
(s) (u) "Two-party
exchange" means a transaction, including a book transfer, in which refined
petroleum or a refined petroleum product is transferred from 1 supplier to
another supplier and to which all of the following apply:
(i) The transaction includes a transfer of
refined petroleum or a refined petroleum product from the person that holds the
original inventory position for the refined petroleum or refined petroleum
product in storage tanks as reflected in the records of the refiner, pipeline
terminal operator, or marine terminal operator.
(ii) The exchange transaction is completed
before removal across the rack by the receiving supplier.
(iii) The refiner, pipeline terminal operator,
or marine terminal operator in its books and records treats the receiving
exchange party as the supplier that removes the refined petroleum or refined
petroleum product across a rack for purposes of reporting the transaction to
the department under the motor fuel tax act, 2000 PA 403, MCL 207.1001 to
207.1170.
(t) (v) "Underground
storage tank system" means that term as it is defined
in section 21303.
(u) (w) "Work
invoice" means a list of goods or services for costs of corrective action
related to a claim, including a statement of the amount due.
Sec. 21506a. (1) The refined petroleum
fund is created within the state treasury.
(2) The state
treasurer may receive money or other assets from any source for deposit into
the refined petroleum fund. The state treasurer shall direct the investment of
the refined petroleum fund . The state treasurer shall and credit to the refined petroleum fund interest and
earnings from refined petroleum fund investments.
(3) Money in the
refined petroleum fund at the close of the fiscal year remains in the refined
petroleum fund and does not lapse to the general fund.
(4) Money from the
refined petroleum fund shall must be expended, upon on appropriation, only for 1 or more of the following
purposes:
(a) Corrective
actions performed by the department pursuant to in accordance with section 21320.
(b) The legacy
release program created in section 21519a.
(c) The reasonable
costs of the department in administering the refined petroleum fund and
implementing part 213.
(d) Not more than
$5,000,000.00 annually for petroleum product inspection programs under both of
the following:
(i) The weights and measures act, 1964 PA
283, MCL 290.601 to 290.635.
(ii) The motor fuels quality act, 1984 PA 44,
MCL 290.641 to 290.650d.
(e) Not more than
$3,000,000.00 annually for the bureau of fire services and office of the state
fire marshal, storage tank division, section, in the department of licensing and
regulatory affairs.
(f) Reimbursement
by the authority to local units of government and county road commissions for
the costs of corrective action to manage, relocate, or dispose of any media
contaminated by regulated substances refined petroleum left in place within a public
highway pursuant to section 21310a if all of
the following occur:
(i) The local unit of government or county
road commission has submitted to the authority a public
highway cleanup claim for reimbursement on a form created by the
authority.
(ii) The public
highway cleanup claim for reimbursement is for reasonable and necessary
eligible corrective action costs determined by the administrator pursuant to in accordance
with section 21515(2) to (10).(11).
(iii) The amount of reimbursement is not more
than $200,000.00 per claim.
(iv) An institutional control addressing impacted media within the
public highway in accordance with section 21310a must be in place before
initiation of corrective actions and the submission of a public highway cleanup
claim. The department may determine, in writing, that an institutional control
is not necessary under this subparagraph.
(v) The public highway cleanup claim is for
corrective actions completed after January 24, 2018.
(g) Not more than
$5,000,000.00 annually for the department to provide grants and loans in
accordance with part 196 to facilitate brownfield redevelopment at part 213
properties. Money shall must not be provided under this subsection to fund
the performance of response activities at a part 213 property to address
contamination that is solely attributable to a release regulated under part
201.
(h) The permanent
closure of an underground storage tank system by the department if the
underground storage tank system meets the conditions that require permanent
closure under R 29.2153 of the Michigan Administrative Code or the department
determines it is necessary to protect public health, safety, welfare, or the environment.
Sec. 21506b. (1) The underground storage
tank cleanup fund is created within the state treasury. The state treasurer
shall establish a bond proceeds account within the fund and may establish
procedures for accounting for deposits and expenditures from the bond proceeds
account.
(2) The state
treasurer may receive money or other assets from any source for deposit into
the fund. The state treasurer shall direct the investment of the fund . The state treasurer
shall and credit to the fund interest
and earnings from fund investments.
(3) Money in the
fund at the close of the fiscal year shall remain remains in the fund and shall
does not lapse to the general fund.
(4) The authority shall be is the
administrator of the fund for auditing purposes.
(5) The authority
and the finance authority shall expend money from the fund, upon on appropriation,
only for the following purposes:
(a) As a first
priority, to pay principal and interest due on bonds or notes issued by the
finance authority pursuant to in accordance with this part, plus any amount
necessary to maintain a fully funded debt reserve or other reserve intended to
secure the principal and interest on the bonds or notes as may be required by
resolution, indenture, or other agreement of the finance authority.
(b) For the
reasonable administrative cost of implementing this part incurred by the
department, the department of treasury, the department of attorney general, and
the finance authority. Administrative costs include the actual and necessary
expenses incurred by the finance authority and its members in carrying out the
duties imposed by this part. Total administrative costs expended under this
subdivision shall must
not exceed 7% 12% of the fund's projected revenues in any year.
Costs incurred by the finance authority for the issuance of bonds or notes, which may also be payable from the proceeds of the
bonds or notes, shall
are not be considered
administrative costs.
(c) To pay approved
claims as provided for in this part.
Sec. 21510. (1) An owner or operator is
eligible to receive money from the authority for corrective action or
indemnification due to a confirmed release from
a refined petroleum underground storage tank system only if all of the
following requirements are satisfied and the owner or operator otherwise
complies with this part:
(a) The release
from which the corrective action or indemnification arose was discovered and
reported on or after December 30, 2014.
(b) The refined
petroleum underground storage tank from which the release occurred was, at the
time of discovery of the release , and is presently, in compliance with the
registration and fee requirements of part 211. A refined
petroleum underground storage tank owned by a federally recognized tribe from
which a release occurred was, at the time of discovery of the release, in
compliance with federal registration and fee requirements.
(c) The owner or
operator reported the confirmed release within
24 hours after its discovery as required by part 211 and the rules promulgated
under that part.of the confirmed
release.
(d) The owner or
operator is not the United States government.
(e) The claim is
not for a release from a refined petroleum underground storage tank closed prior to before January
1, 1974, in compliance with the fire prevention code, 1941 PA 207, MCL 29.1 to
29.33, and the rules promulgated under that act.
(f) The owner or
operator was in compliance with the financial responsibility requirements of
part 211 and the rules promulgated under that part at the time of the discovery
of the release or releases for which the claim is filed. A refined petroleum underground storage tank owned by a
federally recognized tribe was in compliance with federal financial
responsibility requirements at the time of the discovery of the release. The
financial responsibility requirements may be waived for previously unknown
refined petroleum underground storage tanks with written consent from the
administrator.
(g) The owner or
operator is otherwise eligible to receive money from the authority under this
part.
(h) The total amount of expenditures, including the
deductible amount, does not exceed the claims limit or the claim period
aggregate limit applicable to the claim.The
claim is filed within 24 months after the date the confirmed release is
reported.
(i) The claim is not for a release discovered after a refined petroleum
underground storage tank system from which the release occurred was closed or
considered permanently closed in compliance with part 211 and the rules
promulgated under that part.
(j) The owner or operator is otherwise in compliance with this part.
(k) The administrator and the board may consider substantial compliance
when making eligibility determinations under this subsection.
(2) The owner or operator may receive money from the
authority for corrective action or indemnification due to a release that
originates from an aboveground piping and dispensing portion of a refined
petroleum underground storage tank system if all of the following requirements
are satisfied:
(a) The owner or operator is otherwise in compliance with
this part and the rules promulgated under this part.
(b) The release is sudden and immediate.
(c) The release is of a quantity exceeding 25 gallons and is
released into groundwater, surface water, or soils.
(d) The owner or operator reported the release to the department
within 24 hours after its discovery.
(2) (3) Either
the owner or the operator may receive money from the authority under this part
for an occurrence, but not both.
(3) (4) An
owner or operator that is a public utility with more than 500,000 customers in
this state is ineligible to receive money from the authority for corrective
action or indemnification associated with a release from a refined petroleum
underground storage tank system used to supply refined petroleum for the
generation of steam electricity.
(5) If an owner or operator has received money from the
authority under this part for a release at a location, the owner and operator
are not eligible to receive money from the authority for a subsequent release
at the same location unless the owner or operator has done either or both of
the following:
(a) Discovered the subsequent release pursuant to corrective
action being taken on a confirmed release and included this subsequent release
as part of the corrective action for the confirmed release.
(b) Upgraded, replaced, removed, or properly closed in place
all refined petroleum underground storage tank systems at the location of the
release so as to meet the requirements of part 211 and the rules promulgated
under that part.
(6) An owner or operator that discovers a subsequent release
at the same location as an initial release pursuant to subsection (5)(a) may
receive money from the authority to perform corrective action on the subsequent
release, if the owner or operator otherwise complies with the requirements of
this part and the rules promulgated under this part. However, the subsequent
release shall be considered as part of the claim for the initial release for
purposes of determining the total amount of expenditures for corrective action
and indemnification under subsection (1)(h).
(7) An owner or operator that discovers a subsequent release
at the same location as an initial release following compliance with subsection
(5)(b) may receive money from the authority to perform corrective action on the
subsequent release, if there have been not more than 2 releases at the
location, and if the owner or operator otherwise complies with the requirements
of this part and the rules promulgated under this part. The subsequent release
shall be considered a separate claim for purposes of determining the total
amount of expenditures for corrective action and indemnification under
subsection (1)(h).
(4) An approved claim must cover corrective actions related to the
release for which approval was granted. A subsequent release discovered at the
location before closure of a release currently covered by the claim may receive
money from the fund for corrective actions in accordance with the following:
(a) A request for additional release coverage is submitted on a form
created by the authority.
(b) If approved by the authority, the additional release is considered
part of the most recently approved claim and is subject to the most recently
approved claim's deductible, claims limit, and claim period aggregate limits.
(5) An owner or operator may receive an additional claim for a release
at a location in accordance with the following:
(a) The release covered by the most recently approved claim achieved
closure.
(b) A new claim form, created by the authority, is submitted and
approved.
(6) An additional claim described under subsection (5) is subject to the
eligibility requirements of an initial claim under this section, and is subject
to the deductible, claims limit, and claim period aggregate limit.
(7) (8) An
owner or operator that seeks to receive money from the authority for corrective
action related to a release shall submit to the
administrator the cleanup fund claim submittal form created by the authority containing that contains the
information required by the administrator to determine compliance with this
part. The administrator shall determine whether the claim complies with this
part and shall notify the owner or operator.
The administrator may consult with the department of licensing and regulatory
affairs to make the determination required in this subsection.
(8) The authority shall not approve a claim for any of the following:
(a) A release that was expected or intended by an owner or operator or
an employee of an owner or operator.
(b) A release caused by, based on, resulting from, or attributable to
the owner's or operator's intentional, knowing, willful, or deliberate
noncompliance with a statute, regulation, ordinance, administrative complaint,
notice of violation, notice letter, executive order, or instruction of any
governmental agency or body.
(c) A release arising from the ownership, maintenance, use, or
entrustment to others of an aircraft, automobile, rolling stock, or watercraft,
including loading and unloading.
(d) A release arising from a consequence, whether direct or indirect, of
war, invasion, act of a foreign enemy, act of terrorists, hostilities, whether
war has been declared or not, civil war, rebellion, revolution, insurrection, usurpation
of power, strike, riot, or civil commotion.
(e) A claim is filed more than 2 calendar years after the date the confirmed
release was reported.
Sec. 21510a. (1) An owner or operator A
claimant is responsible for a deductible amount as follows:
(a) If the owner or operator claimant,
or its affiliate, owns or operates fewer
than 8 refined petroleum underground storage tanks
located in this state, $2,000.00 per claim.
(b) If the owner or operator claimant,
or its affiliate, owns or operates 8 or
more refined petroleum underground storage tanks
located in this state, $10,000.00 per claim.
(c) The deductible
amount under subdivisions (a) and (b) is retroactive to all claims filed for
releases discovered and reported on or after December 30, 2014.
(2) The deductible
amount described in subsection (1) applies to
each approved claim. However, 2 or more claims arising out of the same,
interrelated, associated, repeated, or continuous releases or a series of
related releases shall be considered a single claim and are subject to 1
deductible amount. Any claim that takes place over 2 or more claim periods is
subject to 1 deductible amount.
(3) An owner or operator A
claimant that submits a work invoice under section 21515 is responsible
for the deductible amount described in subsection (1). The expenses toward
meeting the deductible amount shall must be documented and shall
comply with the following:
(a) Expenses for
items listed in the schedule of costs shall must be at or below the allowable reimbursement
amount listed in the schedule of costs.
(b) Expenses for
items that are not listed in the schedule of costs shall
must be reasonable and necessary
considering conditions at the site based upon on a competitive bidding process established by the
authority or as otherwise determined necessary by the
authority.
Sec. 21510d. If an owner or operator
intends to rely on the fund to meet financial responsibility requirements, the
owner or operator shall submit to the authority a request for a determination
that the owner or operator would be eligible for funding under this part in the
event of a release from a refined petroleum underground storage tank system. Upon On receipt of
a request under this subsection, the authority shall make a determination and
provide written notice of that determination , in writing, to
the owner or operator. The notice may contain conditions for maintenance of
that eligibility. A determination under this section is based upon on a
demonstration of all of the following:
(a) The owner or
operator is not ineligible for funding under section 21510(4) and (5).21510.
(b) The refined
petroleum underground storage tank or tanks are presently in compliance with
the registration and fee requirements of part 211. A refined
petroleum underground storage tank owned by a federally recognized tribe is
under federal jurisdiction and is presently in compliance with federal
financial responsibility requirements.
(c) The owner or
operator is not the United States government.
(d) The owner or
operator has financial responsibility for the deductible amount. In order to
demonstrate that the owner or operator has financial responsibility for the
deductible amount under this section and section 21510(1)(f), the owner or
operator may rely upon any on a financial assurance mechanism listed in 40 CFR
280.95 to 280.107 or either of the following:
(i) A financial test of self-insurance. To
pass the financial test of self-insurance, the owner or operator must submit,
on a form developed by the authority, financial information certified as
accurate by the chief financial officer, or an individual in a comparable position, that demonstrates a tangible net worth of at least
3 times the deductible amount required under this part.
(ii) A deposit account in the amount of the
deductible amount required under this part in a financial institution, as that term is defined
in section 1202 of the banking code of 1999, 1999 PA 276, MCL 487.11202, if
access to the deposit account is restricted by a deposit account control
agreement or similar restriction as approved by the authority that requires the
approval of the administrator for a withdrawal from the deposit account.
Sec. 21515. (1) To receive money from the
authority for corrective action, an owner or
operator a claimant that has received receives notice
from the administrator that its claim has been approved pursuant to in accordance
with section 21510(8) 21510 shall follow the procedures outlined in this
section and shall submit work invoices to
the administrator containing that contain the information required by the
administrator relevant to determining compliance with this part.
(2) Within 45 60 days of after receipt
of work invoices submitted pursuant to in accordance with subsection (1) using forms created
by the authority, the administrator shall make all of the following
determinations:
(a) Whether the owner or operator claimant
is eligible to receive funding under this part.
(b) Whether the
work performed or proposed to be performed is consistent with part 213, and
whether those activities are consistent with achieving site closure.
(c) Whether the owner or operator claimant
has paid the deductible amount.
(d) Whether the
corrective action performed is reasonable and necessary considering conditions
at the site of the release.
(e) Whether the
cost of performing the corrective action work is at or below the allowable
reimbursement amount in the schedule of costs. or, if If the
corrective action work is not a an item listed item,
whether the cost is in the schedule of costs,
the corrective action work must be reasonable and necessary , and whether the cost
was considering conditions at the site, based
upon on a
competitive bidding process established by the authority, or otherwise determined to be reasonable and necessary by
the authority.
(3) The
administrator may consult with the department and the department of licensing
and regulatory affairs to make the determination required in subsection (2).
(4) If the
administrator determines under subsection (2) that the work invoice is
reasonable and necessary considering conditions at the site of the release and
reasonable in terms of cost and the owner or
operator claimant is eligible for
funding under this part, the administrator shall approve the work invoice and
notify the owner or operator claimant that submitted the work invoice of the
approval. If the administrator determines that the work described on the work
invoices submitted was not reasonable and necessary or the cost of the work is
not reasonable, or that the owner or operator claimant is not eligible for funding under this part,
the administrator shall deny the work invoice or any portion of the work
invoice submitted and give notice of the denial to the owner or operator claimant
that submitted the work invoice.
(5) The owner or
operator may submit work invoices to the administrator that are related to a
claim only after initial approval of the claim under section 21510(8) 21510 and
if the aggregate amount of work invoices in the submission is $5,000.00 or more, or 120 days or more have passed since the most recent work
invoice was submitted. This limitation does not apply to the final work
invoice submission related to the approved claim. A
work invoice must be submitted within 365 days after the completion of the
services for which reimbursement is being requested and must not be submitted within
14 days after the most recent work invoice was submitted.
(6) If the
administrator determines that a work invoice does not meet the requirements of
subsection (2) or (5), the administrator shall deny reimbursement for the work
invoice and give written notice of the denial to the owner or operator who claimant
that submitted the work invoice.
(7) The
administrator shall approve a reimbursement for a work invoice that was
submitted by an owner or operator a claimant for corrective action taken if the work
invoice meets the requirements of this part for an approved claim and an
approved work invoice.
(8) Except as
provided in subsection (9) and section 21519, the authority shall make a joint
payment to the owner or operator claimant and the contractor that performed the work
listed in the approved work invoices within 45 days after the date of the
administrator's approval under subsection (4) if sufficient money exists in the
fund. Once payment has been made under this section, the authority is not
liable for any claim on the basis of that payment.
(9) The authority
may withhold partial payment of money on payment vouchers if there is
reasonable cause to suspect that there are violations of section 21548 or if
necessary to assure ensure acceptable completion of the proposed work.
(10) The authority
shall prepare and make available to owners and
operators a claimant standardized claim
and work invoice forms.
(11) The
authority shall not approve reimbursement for costs related to any of the
following:
(a) Costs
arising from corrective actions that are not related to the release for which
the claim was approved.
(b)
Punitive, exemplary, or multiplied damages, fines, taxes, penalties,
assessments, punitive or statutory assessments, or any civil, administrative,
or criminal fines, sanctions, or penalties.
(c) Legal
or civil claims made by a claimant against another owner or operator of the
refined petroleum underground storage tank system.
(d) Costs,
charges, or expenses incurred by the claimant for goods supplied by the
claimant or services performed by the staff or employees of the claimant, or
its parent, subsidiary, or affiliate, unless the costs, charges, or expenses
are incurred with the prior written approval of the authority.
(e) Costs
arising from the testing, repair, reconstruction, or upgrading of a refined
petroleum underground storage tank system, or any other improvements and site
enhancements or routine maintenance on, within, or under a location.
(f) Costs
arising from removing, replacing, or recycling a refined petroleum underground
storage tank system, including removal and disposal of tank contents, removal
and replacement of pavement over the underground storage tank system footprint,
or backfilling and compacting void space left by the removal of an underground
storage tank system.
(g) Costs
incurred more than 1 calendar day before the reporting of the confirmed release
for which a claim is approved.
(h) Costs
related to the injury of an employee of the claimant or its affiliate arising
from and in the course of employment or while performing duties related to the
conduct of the business of the claimant or its affiliate by a spouse, child,
parent, brother, or sister of that employee. This subdivision applies whether
the claimant may be liable as an employer or in any other capacity and to any
obligation to share damages with or repay someone else that must pay damages
because of the injury.
(i) Any
obligation of the claimant under worker's compensation, unemployment
compensation, or disability benefits law or a similar law.
(j) Any
liability or claim for liability of others assumed by the claimant under a
contract or agreement, unless the claimant would have been liable in the
absence of the contract or agreement.
(k) Costs
that have been or will be submitted to or that have been paid in accordance
with a third-party agreement or an insurance policy.
(l) Costs arising from corrective actions that are not
necessary to obtain a restricted closure based on the land use at the time and
location the release was discovered. A restricted closure can be achieved
utilizing 1 or more institutional controls, including, but not limited to,
restrictive covenants, an environmental license agreement with the department
of transportation, public highway as an alternative mechanism, or an ordinance
or state law or rule. Reimbursement of corrective actions conducted in place of
an institutional control may be considered eligible if any of the following
conditions are met and approved in writing by the administrator before the
corrective actions take place:
(i) The corrective action will eliminate the need for
installation and long-term operation, maintenance, and monitoring of mitigation
measures that would otherwise be necessary to prevent unacceptable exposures.
(ii) The corrective action will result in closure of the
release in a more expeditious manner and will provide a higher level of
confidence that closure of the release will remain protective.
(iii) The corrective action is necessary to achieve closure of
off-site impact to properties that are not owned, operated, or controlled by
the claimant or the claimant's affiliate that is liable under part 213.
(m) Costs
incurred after the closure date of the release for which the claim was filed,
except for costs for monitoring well abandonment, remediation system
decommissioning, or related to requirements recorded in an approved restrictive
covenant or institutional control, performed within 1 year after the closure
date. The administrator may grant an exception to the costs described under
this subdivision.
(n)
Litigation costs.
(o) Any
form of interest, late payment penalties, or carrying charges.
(p)
Shipping or postage charges related to the delivery of soil, liquid, or vapor
samples.
(q)
Administrative costs, such as bookkeeping or form preparation, including, but
not limited to, eligibility requests, claims, invoices, proposals, and change
orders, and purchase orders between claimant and consultant or claimant and
contractor.
(r)
Environmental liability insurance premiums.
(s)
Replacement or repair of pavement, landscaping, fences, utilities, or
structures; property upgrades; or raze and rebuild activities, unless directly
associated with eligible and necessary corrective actions.
(t) Costs
incurred due to lost income, property loss, or reduced property values unless
part of an indemnification request approved under section 21518.
(u) Fines
or penalties imposed by local, state, or federal government agencies.
(v)
Punitive or exemplary damages.
(w) Costs
related to the excavation, transport, and disposal of more than 1,500 tons of
soil without prior written authorization from the administrator.
(x)
Laboratory rates for rapid turnaround sample analysis that exceed the maximum
allowable rates on the schedule of costs, unless preapproved by the
administrator.
(y) Charges
for equipment not used on the date of the charge.
(z) Costs
incurred if a non-low bidder performs required competitively bid services,
unless preapproved by the administrator.
(aa)
Corrective action activities, labor, laboratory testing, drilling, or other
work that exceeds actual costs as demonstrated by submitted invoices.
(bb)
Potentially refundable costs to the claimant, including, but not limited to,
permit inspection fees and cash bonds, until the cost is actually incurred.
(cc)
Consultant markup of items listed on the schedule of costs, not including
subcontractor invoices and schedule-of-cost items included on a subcontractor
invoice.
Sec. 21516. (1) An owner or operator A
claimant with a claim approved pursuant to in accordance with section 21510 for which corrective
action is in progress who that sells or transfers to
another person the property that is the subject of the approved claim to another person may assign or transfer the
approved claim to that the other person. The person to whom the assignment
or transfer is made is eligible to receive money from the authority. as an owner or operator
for the release which is the subject of the approved claim. Allowable,
outstanding approved or paid work invoices of the owner
or operator making claimant that make the
assignment or transfer may be counted toward the deductible amount of the
person to whom the assignment or transfer is made. The
person to whom the assignment or transfer is made has a claim limit equal to
the balance of the claim limit initially assigned to the claimant that made the
assignment or transfer, and the claim period aggregate limit includes only
reimbursements made to the person to whom the assignment or transfer is made.
(2) An owner or operator assigning or transferring an
approved claim pursuant to this section shall notify the administrator of the
proposed assignment or transfer at least 10 days before the effective date of
the assignment or transfer.A claim that has
reached its claim limit or the original claim period aggregate limit may not be
transferred under this section.
Sec. 21518. (1) To receive money from the
authority for indemnification, the owner or
operator claimant shall submit to the
administrator a request for indemnification containing
that contains the information required
by the administrator, including a all of the following:
(a) A copy of
the judgment obtained by a third party from a court of law against the owner or operator claimant
or the settlement entered into between the owner
or operator claimant and the third
party, all as
applicable.
(b) All documentation
supporting that
supports the reasonableness of and justification for the judgment or
settlement. , and
work
(c) Work invoices
which conform to the requirements of this part.
(2) If the
administrator determines that the owner or operator
claimant is eligible for funding under
this part, is eligible for the amount requested, has paid the deductible
amount, and has not exceeded the allowable amount of expenditure provided in
section 21510(1)(i), 21502, and that the work invoices are payable under
this part, the administrator shall forward a copy of the request for
indemnification along with all supporting documentation to the attorney
general. The attorney general shall approve the request for indemnification if
there is a legally enforceable judgment against, or settlement with, the owner or operator claimant
that was caused by an accidental release and that is reasonable and
consistent with the purposes of this part. The attorney general may raise as a
defense to the request any rights or defenses that were or are available to the
owner or operator claimant
and, in the case of a judgment, that were not heard and ruled upon on by the
court. If a request for indemnification is approved by the attorney general,
the authority shall pay the indemnification amount.
(3) (2) The
administrator shall keep records of all approved requests for indemnification.
(4) (3) The
authority shall make a payment to an owner or
operator a claimant for an approved
indemnification request within 30 days if sufficient money is available to make
the payment.
Sec. 21519. (1) The authority shall make
payments on claims work
invoices in the order in which they are received. However, if there is
insufficient money available to make payments on all approved claims, the
authority shall give notice to each owner claimant that is eligible to submit a claim work invoice under
this part advising the owners claimant of the financial situation and the authority
shall prioritize payments based upon on the risks at the site to the public health,
safety, or welfare or the environment. Payments on claims that are not funded shall must be paid
if revenues subsequently become available.
(2) The authority
and the this state
are not liable for the reimbursement of work
invoices or requests for indemnification if revenues of the authority are
insufficient to meet these claims.
Sec. 21519a. (1) The department shall
establish and the authority shall administer a legacy release program as
provided in this section to reimburse eligible persons for costs of corrective
actions for certain historic releases from refined petroleum underground
storage tank systems. An eligible person may be reimbursed for corrective
action costs incurred if the eligible person demonstrates all of the following:
(a) The release
from which the corrective action or indemnification arose was discovered and
reported prior to before
December 30, 2014.
(b) The release upon on which the
request for reimbursement is based has not been closed pursuant to in accordance
with part 213 prior to before December 30, 2014.
(c) Any refined petroleum underground storage tank systems
that are operating at the location from which the release occurred are
currently in compliance with the registration requirements of part 211.
(c) (d) The
request for reimbursement does not include reimbursement for money that was
reimbursed from any other source, including insurance policies.
(d) (e) A
claim submitted to the legacy release program shall
must not be approved by the authority
for any of the prohibitions listed under section 21510c.21510(8).
(e) (f) The
request for reimbursement is for corrective action performed on or after
December 30, 2014.
(2) An eligible
person that seeks to be reimbursed under the legacy release program established
under this section shall submit to the authority a request for reimbursement on
a form provided by the authority containing and provide the documentation required by the
authority.
(3) The authority
shall approve a request for reimbursement under this section only as follows:
(a) The amount
approved for reimbursement shall be is 50% of the aggregate indemnification and
corrective action costs incurred, but not more than 50% of the reasonable and
necessary eligible costs as determined by the administrator pursuant to in accordance
with section 21515(2) to (10).(11).
(b) The total
amount approved for reimbursement shall does not exceed a total of $50,000.00 for all
releases from refined petroleum underground storage tank systems at a single
location.
(c) An owner or
operator may request a review of a denied claim or work invoice per in accordance with section
21521.
(4) To be considered for reimbursement, work invoices must be submitted
to the administrator within 180 days after the effective date of the 2025 amendatory
act that amended this subsection.
(5) (4) As
used in this section, "eligible person" means the owner or operator
of a refined petroleum underground storage tank system at the time of the
reporting of the release.
Sec. 21521. (1) If the administrator
denies a claim, work invoice, request for indemnification, or request for an
eligibility determination, under section 21510(8), the owner or operator, who or claimant, that submitted the claim, work invoice,
request for indemnification, or request for an eligibility determination under section 21510(8) may, within 14 business days following the denial, request review by
the board. However, if the administrator believes the dispute may be able to be
resolved without the board's review, the administrator may contact the owner or
operator, or claimant,
regarding the issues in dispute and may negotiate a resolution of the
dispute prior to before
the board's review. The board shall conduct a review of the denial to
determine whether the claim, work invoice, or request for indemnification is
payable under this part.
(2) A person who that is denied
approval by the board after review under subsection (1) may appeal the decision
directly to the circuit court.
Sec. 21524. (1) The authority shall be
governed by a board of directors consisting of the director of the department
and 6 residents of the this state, appointed
by the governor with the advice and consent of the senate, as follows:
(a) An individual
representing petroleum refiners.
(b) An individual
representing independent petroleum marketers.
(c) An individual
from a statewide motor fuel retail association.
(d) An individual from a statewide business association that includes
owners or operators of refined petroleum underground storage tanks.representing qualified underground storage tank consultants
with considerable experience in the remediation of leaking underground storage
tank systems.
(e) An individual
from a statewide environmental organization.
(f) A member of the
general public.
(2) The 6 appointed
members of the board of directors shall serve
terms of 3 years. However, in making the initial appointments, the governor
shall designate 2 appointed members to serve for 3 years, 2 appointed members
to serve for 2 years, and 2 appointed members to serve for 1 year.
(3) Upon On appointment
to the board of directors under subsection (1), and upon on the taking
and filing of the constitutional oath of office, a member of the board of
directors shall enter office and exercise the duties of the office to which he or she the member is
appointed.
(4) A vacancy on
the board of directors shall must be filled in the same manner as the original
appointment. A vacancy shall must be filled for the balance of the unexpired term.
A member of the board of directors shall hold office until a successor is
appointed and qualified.
(5) Members of the
board of directors and officers and employees of the authority are subject to
1968 PA 317, MCL 15.321 to 15.330, and 1968 PA 318, MCL 15.301 to 15.310, as
applicable. A member of the board of directors or an officer, employee, or
agent of the authority shall discharge the duties of his or her the position
in a nonpartisan manner, with good faith, and with the degree of diligence,
care, and skill that an ordinarily prudent person would exercise under similar
circumstances in a like position. In discharging his
or her duties, a member of the board of directors or an officer,
employee, or agent of the authority, when acting in good faith, may rely upon on any of the
following:
(a) The opinion of
counsel for the authority.
(b) The report of
an independent appraiser selected with reasonable care by the board of
directors.
(c) Financial
statements of the authority represented to the member of the board of
directors, officer, employee, or agent to be correct by the officer of
authority having charge of its books or account, or stated in a written report
by the auditor general or a certified public accountant or the firm of the
accountant to fairly reflect the financial condition of the authority.
(6) The board of
directors shall organize and make its own policies and procedures. The board of
directors shall conduct all business at public meetings held in compliance with
the open meetings act, 1976 PA 267, MCL 15.261 to 15.275. Public notice of the
time, date, and place of each meeting shall must be given in the manner required by the open meetings act, 1976 PA 267, MCL 15.261 to
15.275. Four members of the board of directors constitute a quorum for the
transaction of business. An action of the board of directors shall must be by a
majority of the votes cast. The director of the department may designate a
representative from his or her the department to serve as a voting member of the
board of directors for 1 or more meetings.
(7) The board of
directors shall elect a chairperson from among its members and may elect any
other officers the board of directors considers appropriate.
Sec. 21548. (1) A person who that makes or
submits or causes to be made or submitted either directly or indirectly any a statement,
report, affidavit, application, claim, bid, work invoice, or other request for
payment or indemnification under this part knowing that knows that the statement, report, application,
claim, bid, work invoice, or other request for payment or indemnification is
false or misleading, is guilty of a felony
punishable by imprisonment for not more than 5 years or a fine of not more than
$50,000.00, or both. In addition to any a penalty imposed under this subsection, a person
convicted under this subsection shall pay restitution to the authority for the
amount received in violation of this subsection.
(2) A person who that makes or
submits or causes to be made or submitted either directly or indirectly any a statement,
report, application, claim, bid, work invoice, or other request for payment or
indemnification under this part knowing that knows that the statement, report, affidavit,
application, claim, bid, work invoice, or other request for payment or
indemnification is false, misleading, or fraudulent, or who that commits a
fraudulent practice, is subject to a civil fine of not more than $50,000.00 or
twice the amount submitted, whichever is greater. In addition to any a civil fine
imposed under this subsection, a person found responsible under this subsection
shall pay restitution to the authority for the amount received in violation of
this subsection. The legislature intends that this subsection be given
retroactive application.
(3) As used in
subsection (2), "fraudulent" or "fraudulent practice"
includes, but is not limited to, the following:
(a) Submitting a
work invoice for the excavation, hauling, disposal, or provision of soil, sand,
or backfill for an amount greater than the legal capacity of the carrying
vehicle or greater than was actually carried, excavated, disposed, or provided.
(b) Submitting
paperwork for services or work provided that was not in fact provided or that
was not directly provided by the individual indicated on the paperwork.
(c) Contaminating
an otherwise clean resource or site with contaminated soil or product from a
contaminated resource or site.
(d) Returning any
load of contaminated soil to its original site for reasons other than
remediation of the soil.
(e) Causing damage
intentionally or as the result of gross negligence to a refined petroleum
underground storage tank system, which damage results in a release at a site.
(f) Placing a
refined petroleum underground storage tank system at a contaminated site where
no refined petroleum underground storage tank system previously existed for
purposes of disguising the source of contamination or to obtain funding under
this part.
(g) Submitting a
work invoice for the excavation of soil from a site that was removed for
reasons other than removal of the refined petroleum underground storage tank
system or remediation.
(h) Any intentional
act or act of gross negligence that causes or allows contamination to spread at
a site.
(i) Registration of
a nonexistent refined petroleum underground storage tank system with the
department.
(j) Loaning to an owner or operator a
claimant the deductible amount and then submitting or causing to be
submitted inflated claims or invoices designed to recoup the deductible amount.
(k) Confirming a
release without simultaneously providing notice to the owner or operator.
(l) Inflating bills or work invoices, or
both, by adding charges for work that was not performed.
(m) Submitting a
false or misleading laboratory report.
(n) Submitting
bills or work invoices, or both, for sampling, testing, monitoring, or
excavation that are not justified by the site condition.
(o) Falsely
characterizing the contents of a refined petroleum underground storage tank
system for purposes of obtaining funding under this part.
(p) Submitting or
causing to be submitted bills or work invoices by or from a person who that did not
directly provide the service.
(q) Characterizing
legal services as consulting services for purposes of obtaining funding under
this part.
(r) Misrepresenting
or concealing the identity, credentials, affiliation, or qualifications of
principals or persons seeking, either directly or indirectly, funding or
approval for participation under this part.
(s) Falsifying a
signature on a claim application or a work invoice.
(t) Failing to
accurately disclose the actual amount and carrier of unencumbered insurance
coverage available for new environmental impairment or professional liability
claims.
(u) Any other act
or omission of a false, fraudulent, or misleading nature undertaken in order to
obtain funding under this part.
(4) The attorney
general or county prosecutor may conduct an investigation of an alleged
violation of this section and bring an action for a violation of this section.
(5) If the attorney
general or county prosecutor has reasonable cause to believe that a person has
information or is in possession, custody, or control of any document or
records, however stored or embodied, or tangible object which is relevant to an
investigation of a violation or attempted violation of this part or a crime or
attempted crime against the fund, the attorney general or county prosecutor
may, before bringing any action, make an ex parte request to a magistrate for
issuance of a subpoena requiring that person to appear and be examined under
oath or to produce the document, records, or object for inspection and copying,
or both. Service may be accomplished by any means described in the Michigan
court rules. Requests made by the attorney general may be brought in Ingham
county.
(6) If a person
objects to or otherwise fails to comply with a subpoena served under subsection
(5), an action may be brought in district court to enforce the demand. Actions
filed by the attorney general may be brought in Ingham county.
(7) The attorney
general or county prosecutor may apply to the district court for an order
granting immunity to any person who that refuses to provide or objects to providing
information, documents, records, or objects sought pursuant
to under this section. If the judge is
satisfied that it is in the interest of justice that immunity be granted, he or she the judge shall
enter an order granting immunity to the person and requiring the person to
appear and be examined under oath or to produce the document, records, or
object for inspection and copying, or both.
(8) A person who that fails to
comply with a subpoena issued pursuant to under subsection (5) or a requirement to appear and
be examined pursuant to under subsection (7) is subject to a civil fine of
not more than $25,000.00 for each day of continued noncompliance.
(9) In addition to
any civil fines or criminal penalties imposed under this part or the criminal
laws of this state, the person found responsible shall repay any money obtained
directly or indirectly under this part. Money owed pursuant
to under this section constitutes a
claim and lien by the authority upon any real or personal property owned either
directly or indirectly by the person. This lien shall
attach attaches regardless of whether
the person is insolvent and may not be extinguished or avoided by bankruptcy.
The lien imposed by this section has the force and effect of a first in time
and right judgment lien.
(10) Subsection (1)
does not preclude prosecutions under other laws of the
this state including, but not limited
to, section 157a, 218, 248, 249, 280, or 422 of the Michigan penal code, 1931
PA 328, MCL 750.157a, 750.218, 750.248, 750.249, 750.280, and 750.422.
(11) All civil
fines collected pursuant to under this section shall must be apportioned in the following manner:
(a) Fifty percent shall must be
deposited in the general fund and shall be used
by the department to fund fraud investigations under this part.
(b) Twenty-five
percent shall must be
paid to the office of the county prosecutor or attorney general, whichever
office brought the action.
(c) Twenty-five
percent shall must be
paid to a local police department or sheriff's office, or a city or county
health department, if investigation by that office or department led to the
bringing of the action. If more than 1 office or department is eligible for
payment under this subsection, division of payment shall
must be on an equal basis. If there is
not a local office or department that is entitled to payment under this
subdivision, the money shall must be forwarded to the state treasurer for deposit
into the refined petroleum fund.
Enacting section 1. Section
21510c of the natural resources and environmental protection act, 1994 PA 451,
MCL 324.21510c, is repealed.