Florida Senate - 2017 CS for SB 1278
By the Committee on Environmental Preservation and Conservation;
and Senator Grimsley
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 or a third party
16 administrator; specifying that certain costs are not
17 eligible for payment; requiring the department to
18 review and approve applications on a first-come,
19 first-served basis, with purchase orders subject to
20 certain remaining funds; limiting the amount a storage
21 tank owner or operator may receive annually for such
22 measures; providing applicability of certain purchase
23 order requirements; specifying that the department may
24 also pay the cost for certain previously completed
25 repairs, replacement, or other preventive measures
26 relating to damage or potential damage to storage tank
27 systems caused by ethanol or biodiesel; requiring the
28 department to ensure that petroleum storage systems
29 approved after a certain date meet certain standards
30 for ethanol blend, biodiesel blend, and other
31 alternative fuel compatibility; providing an effective
34 Be It Enacted by the Legislature of the State of Florida:
36 Section 1. Paragraph (h) is added to subsection (1) of
37 section 376.3071, Florida Statutes, paragraph (a) of subsection
38 (2) and subsection (4) of that section are amended, and
39 subsections (15) and (16) are added to that section, to read:
40 376.3071 Inland Protection Trust Fund; creation; purposes;
42 (1) FINDINGS.—In addition to the legislative findings set
43 forth in s. 376.30, the Legislature finds and declares:
44 (h) That Congress enacted the Energy Policy Act of 2005,
45 amending the Clean Air Act, to establish a Renewable Fuel
46 Standard requiring the use of ethanol as an oxygenate additive
47 for gasoline and biodiesel as an additive for ultra-low sulfur
48 diesel fuel. An unintended consequence of the inclusion of
49 ethanol in gasoline and biodiesel in diesel fuel has been to
50 cause, and potentially cause, significant corrosion and other
51 damage to petroleum storage system components regulated under
52 this chapter. The Legislature further finds that petroleum
53 storage system components have been found by the department in
54 its equipment approval process to meet compatibility standards;
55 however, these standards may have subsequently changed due to
56 the introduction of ethanol and biodiesel. This state enacted
57 secondary containment requirements before Congress’ mandated
58 introduction of ethanol into gasoline and biodiesel into ultra
59 low sulfur diesel fuel. Therefore, owners and operators of
60 petroleum storage facilities in Florida who complied with this
61 state’s secondary containment requirements and installed
62 approved equipment that may not have been evaluated for
63 compatibility with ethanol and biodiesel, cross-contamination
64 due to the storage of gasoline and diesel fuel, and the effects
65 of condensation and minimal amounts of water in storage tanks
66 are at a particular risk for having to repair or replace
67 equipment or take other preventive measures in advance of the
68 end of the equipment’s expected useful life in order to prevent
69 releases or discharges of pollutants.
70 (2) INTENT AND PURPOSE.—
71 (a) It is the intent of the Legislature to establish the
72 Inland Protection Trust Fund to serve as a repository for funds
73 which will enable the department to respond without delay to
74 incidents of inland contamination, and damage or potential
75 damage to storage tank systems caused by ethanol or biodiesel as
76 described in subsection (15) which may result in such incidents,
77 related to the storage of petroleum and petroleum products in
78 order to protect the public health, safety, and welfare and to
79 minimize environmental damage.
80 (4) USES.—Whenever, in its determination, incidents of
81 inland contamination, or potential incidents as provided in
82 subsection (15), related to the storage of petroleum or
83 petroleum products may pose a threat to the public health,
84 safety, or welfare, water resources, or the environment, the
85 department shall obligate moneys available in the fund to
86 provide for:
87 (a) Prompt investigation and assessment of contamination
89 (b) Expeditious restoration or replacement of potable water
90 supplies as provided in s. 376.30(3)(c)1.
91 (c) Rehabilitation of contamination sites, which shall
92 consist of cleanup of affected soil, groundwater, and inland
93 surface waters, using the most cost-effective alternative that
94 is technologically feasible and reliable and that provides
95 adequate protection of the public health, safety, and welfare,
96 and water resources, and that minimizes environmental damage,
97 pursuant to the site selection and cleanup criteria established
98 by the department under subsection (5).
, except that This
99 paragraph does not authorize the department to obligate funds
100 for payment of costs which may be associated with, but are not
101 integral to, site rehabilitation, such as the cost for
102 retrofitting or replacing petroleum storage systems, unless
103 repair, replacement, or other preventive measures are authorized
104 pursuant to subsection (15).
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
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 related hardware 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.
195 (15) PETROLEUM STORAGE SYSTEM REPAIR OR REPLACEMENT DUE TO
196 DAMAGE CAUSED BY ETHANOL OR BIODIESEL; OTHER PREVENTIVE
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 have likely been damaged due to the storage
201 of 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 systems, including tanks,
206 integral piping, or related hardware, that have likely been
207 damaged, or are subject to damage, by the storage of fuels
208 blended with ethanol or biodiesel or for other preventive
209 measures to ensure compatibility with ethanol or biodiesel in
210 accordance with the 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 has likely been damaged as a result of the storage of
217 fuel blended with ethanol or biodiesel or is not 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. Funding for preventative measures is
234 only available for petroleum storage systems that have not
235 received funding under this subsection. For eligible
236 preventative measures, an owner or operator may only receive
237 funding for up to 5 years or when the petroleum storage system
238 is replaced, whichever comes first. The petroleum storage system
239 specialty contractor who prepared the affidavit and proposed
240 scope of work may not also perform the repair, replacement, or
241 preventive measures.
242 d. For proposals to replace storage tanks or piping, a
243 statement from a certified public accountant indicating the
244 depreciated value of the tanks or piping proposed for
245 replacement. Applications for such proposals must also include
246 documentation of the age of the storage tank or piping.
247 Historical tank registration records may be used to determine
248 the age of the storage tank and piping. The depreciated value
249 shall be the maximum allowable replacement cost for the storage
250 tank and piping, including prorated labor costs. For the
251 purposes of this paragraph, tanks that are 20 years old or older
252 are deemed to be fully depreciated and have no replacement value
253 and are not eligible for funding under this subsection.
254 2. The department shall review applications for
255 completeness, accuracy, and the reasonableness of costs and
256 scope of work. The department must, within 30 days after receipt
257 of an application, approve it, deny it, propose modification to
258 it, or request additional information.
259 (b) If an application is approved, the department shall
260 issue a purchase order to the petroleum storage system owner or
261 operator. The purchase order shall:
262 1. Reflect a payment due to the owner or operator for the
263 cost of the scope of work approved by the department, less a
264 deductible of 25 percent.
265 2. State that moneys are not due to the owner or operator
266 pursuant to the purchase order until the scope of work
267 authorized by the department has been completed in substantial
268 conformity with the purchase order.
269 3. Specify that the work authorized in the purchase order
270 must be substantially completed and paid for by the petroleum
271 storage system owner or operator within 180 days after the date
272 of the purchase order. After such time, the purchase order is
273 void. This requirement does not apply to preventive measure
274 purchase orders.
275 4. Develop a maintenance completion and payment deadline
276 schedule for approved applicants for preventive measure purchase
277 orders. The failure of an owner or operator to meet these
278 scheduled deadlines shall invalidate the purchase order for all
279 future payments due pursuant to the order. An approved
280 maintenance plan for preventive measures may not exceed 5 years.
281 An owner or operator may not receive funding for preventive
282 measures for a petroleum storage system after receiving funds
283 under this subsection for the replacement of that petroleum
284 storage system.
285 (c)1. Except for preventive measure purchase orders, the
286 applicant may request that the department make payment following
287 completion of the work authorized by the department, in
288 accordance with the terms of the purchase order. The request
289 must include a sufficient demonstration that the work has been
290 completed in substantial conformance with the purchase order and
291 that the costs have been fully paid. Upon such a showing, the
292 department must issue the payment in accordance with the terms
293 of the purchase order.
294 2. For preventive measures purchase orders, the department
295 must make periodic payments in accordance with the schedule
296 specified in the purchase order upon satisfactory showing that
297 maintenance work has been completed and costs have been paid by
298 the owner or operator as specified in the purchase order.
299 (d) The department may develop forms to be used for
300 application and payment procedures. Until such forms are
301 developed, an applicant may submit the required information in
302 any format, as long as the documentation is complete.
303 (e) The department may request the assistance of the
304 Department of Management Services or a third-party administrator
305 to assist in the administration of the application and payment
306 process. Any costs associated with this administration shall be
307 paid from the funds identified in this section. Not more than 3
308 percent of the appropriated funds may be used for
310 (f) This subsection may not affect the obligations of a
311 facility owner or operator or petroleum storage system owner or
312 operator to timely comply with department rules regarding the
313 maintenance, replacement, and repair of petroleum storage
314 systems in order to prevent a release or discharge of
316 (g) Payments may not be made for the following:
317 1. Proposal costs or costs related to preparation of the
318 application and required documentation;
319 2. Certified public accountant costs;
320 3. Except as provided in paragraph (j), any costs in excess
321 of the amount approved by the department pursuant to paragraph
322 (b) or which are not in substantial conformance with the
323 purchase order;
324 4. Costs associated with storage tanks, piping, or related
325 hardware that has previously been repaired or replaced for which
326 costs have been paid under this section;
327 5. Facilities that are not in compliance with department
328 storage tank rules, until the noncompliance issues have been
329 resolved; or
330 6. Costs associated with damage to petroleum storage
331 systems caused in whole or in part by causes other than the
332 storage of fuels blended with ethanol or biodiesel.
333 (h) The department must review and approve applications on
334 a first-come, first-served basis. However, the department may
335 not issue purchase orders unless funds remain for the current
336 fiscal year.
337 (i) A petroleum storage system owner or operator may not
338 receive more than $200,000 annually for equipment replacement,
339 repair, or preventive measures at any single facility, or
340 $500,000 annually in aggregate for all facilities it owns or
341 operates. An approved maintenance plan for preventive measures
342 may not exceed 5 years. An owner or operator may not receive
343 funding for preventive measures for a petroleum storage system
344 after receiving funds under this subsection for the replacement
345 of that petroleum storage system.
346 (j) An owner or operator who has incurred costs for repair,
347 replacement, or other preventive measures as described in this
348 subsection during the period of July 1, 2015, through June 30,
349 2017, may apply to request payment for such costs from the
350 department using the procedure in paragraphs (b), (c), and (d).
351 The department may not disburse payment for approved
352 applications for such work until all purchase orders for
353 previously approved applications have been paid and unless funds
354 remain available for the fiscal year. Such payment is subject to
355 a deductible of 25 percent of the cost of the scope of work
356 approved by the department pursuant to the application specified
357 under this paragraph.
358 (16) COMPLIANCE WITH COMPATIBILITY STANDARDS.—The
359 department shall ensure that petroleum storage systems approved
360 after July 1, 2017, meet applicable standards for compatibility
361 for ethanol blends, biodiesel blends, and other alternative
362 fuels that are likely to be stored in such systems.
363 Section 2. This act shall take effect July 1, 2017.