Florida Senate - 2017                                    SB 1278
       By Senator Grimsley
       26-00812-17                                           20171278__
    1                        A bill to be entitled                      
    2         An act relating to fuel storage; amending s. 376.3071,
    3         F.S.; providing legislative findings; revising
    4         legislative intent; specifying that funds in the
    5         Inland Protection Trust Fund may be used for certain
    6         purposes relating to damage or potential damage to
    7         petroleum storage systems caused by ethanol or
    8         biodiesel; specifying the maximum funds that may be
    9         used for such purposes; specifying the process for
   10         petroleum storage system owners or operators to
   11         request approval for work and payment from the
   12         Department of Environmental Protection; authorizing
   13         the department to develop forms for certain procedures
   14         and request administrative assistance from the
   15         Department of Management Services; specifying that
   16         certain costs are not eligible for payment; providing
   17         that applications for payment may be submitted on a
   18         first-come, first-served basis, with purchase orders
   19         subject to certain remaining funds; limiting the
   20         amount a storage tank owner or operator may receive
   21         annually for such measures; specifying that the
   22         department may also pay the cost for certain
   23         previously completed repairs, replacement, or other
   24         preventive measures relating to damage or potential
   25         damage to storage tank systems caused by ethanol or
   26         biodiesel; requiring the department to ensure that
   27         petroleum storage systems approved after a certain
   28         date meet certain standards for ethanol blend,
   29         biodiesel blend, and other alternative fuel
   30         compatibility; providing effective dates.
   32  Be It Enacted by the Legislature of the State of Florida:
   34         Section 1. Upon the expiration and reversion of the
   35  amendments to section 376.3071, Florida Statutes, made pursuant
   36  to sections 95 and 126 of chapter 2016-62, Laws of Florida,
   37  paragraph (h) is added to subsection (1) of section 376.3071,
   38  Florida Statutes, paragraph (a) of subsection (2) of that
   39  section and subsection (4) of that section are amended, and
   40  subsections (15) and (16) are added to that section, to read:
   41         376.3071 Inland Protection Trust Fund; creation; purposes;
   42  funding.—
   43         (1) FINDINGS.—In addition to the legislative findings set
   44  forth in s. 376.30, the Legislature finds and declares:
   45         (h) That Congress enacted the Energy Policy Act of 2005,
   46  amending the Clean Water Act, to establish a Renewable Fuel
   47  Standard requiring the use of ethanol as an oxygenate additive
   48  for gasoline and biodiesel as an additive for ultra-low sulfur
   49  diesel fuel. An unintended consequence of the inclusion of
   50  ethanol in gasoline and biodiesel in diesel fuel has been to
   51  cause, and potentially cause, significant corrosion and other
   52  damage to storage tanks, piping, and storage tank system
   53  components regulated under this chapter. The Legislature further
   54  finds that storage tanks, piping, and storage tank system
   55  components have been found by the department in its equipment
   56  approval process to meet compatibility standards; however, these
   57  standards may have subsequently changed due to the introduction
   58  of ethanol and biodiesel. This state enacted secondary
   59  containment requirements before Congress’ mandated introduction
   60  of ethanol into gasoline and biodiesel into ultra-low sulfur
   61  diesel fuel. Therefore, owners and operators of petroleum
   62  storage facilities in Florida who complied with this state’s
   63  secondary containment requirements and installed approved
   64  equipment that may not have been evaluated for compatibility
   65  with ethanol and biodiesel, cross-contamination due to the
   66  storage of gasoline and diesel fuel, and the effects of
   67  condensation and minimal amounts of water in storage tanks are
   68  at a particular risk for having to repair or replace equipment
   69  or take other preventive measures in advance of the end of the
   70  equipment’s expected useful life in order to prevent releases or
   71  discharges of pollutants.
   72         (2) INTENT AND PURPOSE.—
   73         (a) It is the intent of the Legislature to establish the
   74  Inland Protection Trust Fund to serve as a repository for funds
   75  which will enable the department to respond without delay to
   76  incidents of inland contamination, and damage or potential
   77  damage to storage tank systems caused by ethanol or biodiesel as
   78  described in subsection (15) which may result in such incidents,
   79  related to the storage of petroleum and petroleum products in
   80  order to protect the public health, safety, and welfare and to
   81  minimize environmental damage.
   82         (4) USES.—Whenever, in its determination, incidents of
   83  inland contamination, or potential incidents as provided in
   84  subsection (15), related to the storage of petroleum or
   85  petroleum products may pose a threat to the public health,
   86  safety, or welfare, water resources, or the environment, the
   87  department shall obligate moneys available in the fund to
   88  provide for:
   89         (a) Prompt investigation and assessment of contamination
   90  sites.
   91         (b) Expeditious restoration or replacement of potable water
   92  supplies as provided in s. 376.30(3)(c)1.
   93         (c) Rehabilitation of contamination sites, which shall
   94  consist of cleanup of affected soil, groundwater, and inland
   95  surface waters, using the most cost-effective alternative that
   96  is technologically feasible and reliable and that provides
   97  adequate protection of the public health, safety, and welfare,
   98  and water resources, and that minimizes environmental damage,
   99  pursuant to the site selection and cleanup criteria established
  100  by the department under subsection (5), except that this
  101  paragraph does not authorize the department to obligate funds
  102  for payment of costs which may be associated with, but are not
  103  integral to, site rehabilitation, such as the cost for
  104  retrofitting or replacing petroleum storage systems.
  105         (d) Maintenance and monitoring of contamination sites.
  106         (e) Inspection and supervision of activities described in
  107  this subsection.
  108         (f) Payment of expenses incurred by the department in its
  109  efforts to obtain from responsible parties the payment or
  110  recovery of reasonable costs resulting from the activities
  111  described in this subsection.
  112         (g) Payment of any other reasonable costs of
  113  administration, including those administrative costs incurred by
  114  the Department of Health in providing field and laboratory
  115  services, toxicological risk assessment, and other assistance to
  116  the department in the investigation of drinking water
  117  contamination complaints and costs associated with public
  118  information and education activities.
  119         (h) Establishment and implementation of the compliance
  120  verification program as authorized in s. 376.303(1)(a),
  121  including contracting with local governments or state agencies
  122  to provide for the administration of such program through
  123  locally administered programs, to minimize the potential for
  124  further contamination sites.
  125         (i) Funding of the provisions of ss. 376.305(6) and
  126  376.3072.
  127         (j) Activities related to removal and replacement of
  128  petroleum storage systems, if repair, replacement, or other
  129  preventive measures are authorized pursuant to subsection (15),
  130  or exclusive of costs of any tank, piping, dispensing unit, or
  131  related hardware, if soil removal is approved as a component of
  132  site rehabilitation and requires removal of the tank where
  133  remediation is conducted under this section, or if such
  134  activities were justified in an approved remedial action plan.
  135         (k) Reasonable costs of restoring property as nearly as
  136  practicable to the conditions which existed before activities
  137  associated with contamination assessment or remedial action
  138  taken under s. 376.303(4).
  139         (l) Repayment of loans to the fund.
  140         (m) Expenditure of sums from the fund to cover ineligible
  141  sites or costs as set forth in subsection (13), if the
  142  department in its discretion deems it necessary to do so. In
  143  such cases, the department may seek recovery and reimbursement
  144  of costs in the same manner and pursuant to the same procedures
  145  established for recovery and reimbursement of sums otherwise
  146  owed to or expended from the fund.
  147         (n) Payment of amounts payable under any service contract
  148  entered into by the department pursuant to s. 376.3075, subject
  149  to annual appropriation by the Legislature.
  150         (o) Petroleum remediation pursuant to this section
  151  throughout a state fiscal year. The department shall establish a
  152  process to uniformly encumber appropriated funds throughout a
  153  state fiscal year and shall allow for emergencies and imminent
  154  threats to public health, safety, and welfare, water resources,
  155  and the environment as provided in paragraph (5)(a). This
  156  paragraph does not apply to appropriations associated with the
  157  free product recovery initiative provided in paragraph (5)(c) or
  158  the advanced cleanup program provided in s. 376.30713.
  159         (p) Enforcement of this section and ss. 376.30-376.317 by
  160  the Fish and Wildlife Conservation Commission. The department
  161  shall disburse moneys to the commission for such purpose.
  162         (q) Payments for program deductibles, copayments, and
  163  limited contamination assessment reports that otherwise would be
  164  paid by another state agency for state-funded petroleum
  165  contamination site rehabilitation.
  166         (r)Repair of, replacement of, or other preventive measures
  167  for storage tanks, piping, or system components as provided in
  168  subsection (15). Such costs may include equipment, excavation,
  169  electrical work, and site restoration.
  171  The issuance of a site rehabilitation completion order pursuant
  172  to subsection (5) or paragraph (12)(b) for contamination
  173  eligible for programs funded by this section does not alter the
  174  project’s eligibility for state-funded remediation if the
  175  department determines that site conditions are not protective of
  176  human health under actual or proposed circumstances of exposure
  177  under subsection (5). The Inland Protection Trust Fund may be
  178  used only to fund the activities in ss. 376.30-376.317 except
  179  ss. 376.3078 and 376.3079. Amounts on deposit in the fund in
  180  each fiscal year must first be applied or allocated for the
  181  payment of amounts payable by the department pursuant to
  182  paragraph (n) under a service contract entered into by the
  183  department pursuant to s. 376.3075 and appropriated in each year
  184  by the Legislature before making or providing for other
  185  disbursements from the fund. This subsection does not authorize
  186  the use of the fund for cleanup of contamination caused
  187  primarily by a discharge of solvents as defined in s.
  188  206.9925(6), or polychlorinated biphenyls when their presence
  189  causes them to be hazardous wastes, except solvent contamination
  190  which is the result of chemical or physical breakdown of
  191  petroleum products and is otherwise eligible. Facilities used
  192  primarily for the storage of motor or diesel fuels as defined in
  193  ss. 206.01 and 206.86 are not excluded from eligibility pursuant
  194  to this section.
  197  MEASURES.—The department shall pay, in accordance with this
  198  subsection, up to $10 million each fiscal year from the fund for
  199  the costs of labor and equipment to repair or replace petroleum
  200  storage systems that may have been damaged due to the storage of
  201  fuels blended with ethanol or biodiesel, or for preventive
  202  measures to reduce the potential for such damage.
  203         (a)A petroleum storage system owner or operator may
  204  request payment from the department for the repair or
  205  replacement of petroleum storage tanks, integral piping, or
  206  ancillary equipment that may have been damaged, or is subject to
  207  damage, by the storage of fuels blended with ethanol or
  208  biodiesel or for other preventive measures to ensure
  209  compatibility with ethanol or biodiesel in accordance with the
  210  following procedures:
  211         1.The petroleum storage system owner or operator may
  212  submit a request for payment to the department along with the
  213  following information:
  214         a.An affidavit from a petroleum storage system specialty
  215  contractor attesting to an opinion that the petroleum storage
  216  system may have been damaged as a result of the storage of fuel
  217  blended with ethanol or biodiesel or may not be compatible with
  218  fuels containing ethanol or biodiesel, or a combination of both.
  219  The affidavit must also include a proposal from the specialty
  220  contractor for repair or replacement of the equipment, or for
  221  the implementation of other preventive measures to reduce the
  222  probability of damage. If the specialty contractor proposes
  223  replacement of any equipment, the specialty contractor must
  224  state the reasons that repair or other preventive measures are
  225  not technically or economically feasible or practical.
  226         b.Copies of any inspection reports, including photographs,
  227  prepared by the specialty contractor or department or local
  228  program inspectors documenting the damage or potential for
  229  damage to the petroleum storage system.
  230         c.A proposal from the specialty contractor showing the
  231  proposed scope of the repair, replacement, or other preventive
  232  measures, including a detailed list of labor, equipment, and
  233  other associated costs. In the case of replacement or repair,
  234  the proposal must also include provisions for any preventive
  235  measures needed to prevent a recurrence of the damage, such as
  236  the use of corrosion inhibitors, the application of coatings
  237  compatible with ethanol or biodiesel, as appropriate, and the
  238  adoption of a maintenance plan.
  239         d.For proposals to replace storage tanks or piping, a
  240  statement from a certified public accountant indicating the
  241  depreciated value of the tanks or piping proposed for
  242  replacement. Applications for such proposals must also include
  243  documentation of the age of the storage tank or piping.
  244  Historical tank registration records may be used to determine
  245  the age of the storage tank and piping. The depreciated value
  246  shall be the maximum allowable replacement cost for the storage
  247  tank and piping, exclusive of labor costs. For the purposes of
  248  this paragraph, tanks that are 20 years old or older are deemed
  249  to be fully depreciated and have no replacement value.
  250         2.The department shall review applications for
  251  completeness, accuracy, and the reasonableness of costs and
  252  scope of work. The department must, within 30 days after receipt
  253  of an application, approve it, deny it, propose modification to
  254  it, or request additional information.
  255         (b)If an application is approved, the department shall
  256  issue a purchase order to the petroleum storage system owner or
  257  operator. The purchase order shall:
  258         1.Reflect a payment due to the owner for the cost of the
  259  scope of work approved by the department, less a deductible of
  260  25 percent.
  261         2.State that no moneys are due to the owner pursuant to
  262  the purchase order until the scope of work authorized by the
  263  department has been completed in substantial conformity with the
  264  purchase order.
  265         3.Except for preventive maintenance contracts, specify
  266  that the work authorized in the purchase order must be
  267  substantially completed and paid for by the petroleum storage
  268  system owner or operator within 180 days after the date of the
  269  purchase order. After such time, the purchase order is void.
  270         4.For preventive maintenance contracts, the department
  271  shall develop a maintenance completion and payment deadline
  272  schedule for approved applicants. The failure of an owner or
  273  operator to meet these scheduled deadlines shall invalidate the
  274  purchase order for all future payments due pursuant to the
  275  order.
  276         (c)1.Except for maintenance contracts, the applicant may
  277  request that the department make payment following completion of
  278  the work authorized by the department, in accordance with the
  279  terms of the purchase order. The request must include a
  280  sufficient demonstration that the work has been completed in
  281  substantial conformance with the purchase order and that the
  282  costs have been fully paid. Upon such a showing, the department
  283  must issue the payment in accordance with the terms of the
  284  purchase order.
  285         2.For maintenance contracts, the department must make
  286  periodic payments in accordance with the schedule specified in
  287  the purchase order upon satisfactory showing that maintenance
  288  work has been completed and costs have been paid by the owner or
  289  operator as specified in the purchase order.
  290         (d)The department may develop forms to be used for
  291  application and payment procedures. Until such forms are
  292  developed, an applicant may submit the required information in
  293  any format, as long as the documentation is complete.
  294         (e)The department may request the assistance of the
  295  Department of Management Services or a third-party administrator
  296  to assist in the administration of the application and payment
  297  process. Any costs associated with this administration shall be
  298  paid from the funds identified in this section.
  299         (f)This subsection may not affect the obligations of
  300  facility owners or operators or petroleum storage system owners
  301  or operators to timely comply with department rules regarding
  302  the maintenance, replacement, and repair of petroleum storage
  303  systems in order to prevent a release or discharge of
  304  pollutants.
  305         (g)Payments may not be made for the following:
  306         1.Proposal costs or costs related to preparation of the
  307  application and required documentation;
  308         2.Certified public accountant costs;
  309         3.Except as provided in subsection (k), any costs in
  310  excess of the amount approved by the department pursuant to
  311  paragraph (b) or which are not in substantial conformance with
  312  the purchase order;
  313         4.Costs associated with storage tanks, piping, or
  314  ancillary equipment that has previously been repaired or
  315  replaced for which costs have been paid under this section;
  316         5.Facilities that are not in compliance with department
  317  storage tank rules, until the noncompliance issues have been
  318  resolved; or
  319         6.Costs associated with damage to petroleum storage
  320  systems caused in whole or in part by causes other than the
  321  storage of fuels blended with ethanol or biodiesel.
  322         (h)Applications may be submitted on a first-come, first
  323  served basis. However, the department may not issue purchase
  324  orders unless funds remain for the current fiscal year.
  325         (i)A petroleum storage system owner or operator may not
  326  receive more than $200,000 annually for equipment replacement,
  327  repair, or preventive measures at any single facility, or
  328  $500,000 annually in aggregate for all facilities it owns or
  329  operates.
  330         (j)Owners or operators who have incurred costs for repair,
  331  replacement, or other preventive measures as described in this
  332  subsection during the period of July 1, 2015, through June 30,
  333  2017, may apply to request payment for such costs from the
  334  department using the procedure in paragraphs (b), (c), and (d).
  335  The department may not disburse payment for approved
  336  applications for such work until all purchase orders for
  337  previously approved applications have been paid and unless funds
  338  remain available for the fiscal year. Such payment is subject to
  339  a deductible of 25 percent of the cost of the scope of work
  340  approved by the department pursuant to the application specified
  341  under this paragraph.
  343  department shall ensure that petroleum storage systems approved
  344  after July 1, 2017, meet applicable standards for compatibility
  345  for ethanol blends, biodiesel blends, and other alternative
  346  fuels that are likely to be stored in such systems.
  347         Section 2. This act shall take effect July 1, 2017.