Florida Senate - 2017                             CS for SB 1278
       By the Committee on Environmental Preservation and Conservation;
       and Senator Grimsley
       592-04104-17                                          20171278c1
    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
   32         date.
   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;
   41  funding.—
   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
   88  sites.
   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
  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 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.
  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
  309  administration.
  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
  315  pollutants.
  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.
  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.