Current Status Bill Number:678 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:19950329 Primary Sponsor:Lander, All Sponsors:Lander, Leventis, Elliott, Gregory, Matthews and Waldrep Drafted Document Number:BR1\18299AC.95 Companion Bill Number:3907 Residing Body:Senate Current Committee:Agriculture and Natural Resources Committee 01 SANR Subject:Drycleaning facility discharge rehabilitation
Body Date Action Description Com Leg Involved
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Senate 19950329 Introduced, read first time, 01 SANR
referred to Committee
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TO AMEND TITLE 44, CHAPTER 56, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO HAZARDOUS WASTE, BY ADDING ARTICLE 4 SO AS TO PROVIDE FOR DRYCLEANING FACILITY DISCHARGE REHABILITATION, TO CREATE THE DRYCLEANING FACILITY RESTORATION TRUST FUND AND PROVIDE FOR ITS USES, TO ESTABLISH PROCEDURES FOR RECEIVING SITE REHABILITATION FUNDS, TO REQUIRE DRYCLEANING FACILITIES TO REGISTER AND PAY FEES, TO ESTABLISH SURCHARGES FOR CONDUCTING A DRYCLEANING BUSINESS OR FOR PRODUCING OR IMPORTING DRYCLEANING SOLVENTS, AND TO ESTABLISH THE DRYCLEANING ADVISORY COUNCIL AND TO PROVIDE FOR ITS MEMBERSHIP AND DUTIES.
Whereas, the General Assembly finds that:
(1) Drycleaning solvents have been discharged in the past at drycleaning facilities as part of the normal operation of these facilities.
(2) Discharges of drycleaning solvents at drycleaning facilities have occurred and are occurring and that discharges pose a threat to the quality of the groundwaters and inland surface waters of this State.
(3) Where contamination of the ground or surface water has occurred, remedial measures have often been delayed for long periods while determinations as to liability and the extent of liability are made and that delays result in the continuation and intensification of the threat to the public health, safety, and welfare, in greater damage to the environment, and in significantly higher costs to contain and remove the contamination.
(4) Resources must be generated by the drycleaning industry and related industries in South Carolina to provide funds to rehabilitate sites contaminated by the release of drycleaning solvents and to provide liability immunity for eligible members of the industries. Now, therefore,
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 44, Chapter 56 of the 1976 Code is amended by adding:
Section 44-56-410. As used in this article:
(1) `Department' means the Department of Health and Environmental Control.
(2) `Discharge' means leakage, seepage, or other release.
(3) `Drycleaning facility' means a commercial establishment located in this State that operates or has at some time in the past operated in whole or in part for the purpose of cleaning clothing and other fabrics utilizing a process which involves the use of drycleaning solvents. `Drycleaning facility' includes laundry facilities that are using or have used drycleaning solvents as part of their cleaning process, but does not include, textile mills or uniform rental and linen supply facilities.
(4) `Drycleaning solvents' means nonaqueous solvents used in the cleaning of clothing and other fabrics and includes perchloroethylene (also known as tetrachloroethylene) and Stoddard solvent, and their breakdown products. `Drycleaning solvents' includes only solvents originating from use at a drycleaning facility or by a wholesale supply facility.
(4) `Dry drop-off facility' means a commercial retail store that receives from customers clothing and other fabrics for drycleaning at an off-site drycleaning facility and does not clean the clothing or fabrics at the store utilizing drycleaning solvents.
(6) `Employee' means an individual employed at an active drycleaning facility.
(7) `Person' means any individual, partnership, corporation, association, or other entity.
(8) `Wholesale supply facility' means a commercial establishment that supplies drycleaning solvents to drycleaning facilities.
Section 44-56-420. (A) There is created in the state treasury a separate and distinct account called the `Drycleaning Facility Restoration Trust Fund' which must be administered by the Department of Health and Environmental Control and which must be expended for the purposes of this chapter. Judgments, recoveries, reimbursements, loans, and other fees and charges related to the implementation of this section, the tax revenues levied, collected, and credited pursuant to Section 44-56-480, and the registration fees collected pursuant to Section 44-56-470 must be credited to the fund. Charges against the fund must be made in accordance with the provisions of this section. The State accepts no financial responsibility as a result of the creation of the fund. The creation of the fund creates no burden upon the State to provide monies for the fund by any mechanisms other than as provided in this section. At no time shall monies from the general fund be obligated to supplement the fund. The State may recover to the fund any funds expended from the fund which were not utilized in accordance with this article.
(B) Whenever incidents of contamination by drycleaning solvents related to the operation of drycleaning facilities or wholesale supply facilities pose a threat to the environment or the public health, safety, or welfare, the department shall obligate monies available in the fund pursuant to this section to provide for:
(1) the prompt investigation and assessment of the contaminated sites; however, the owner or operator of a drycleaning facility or wholesale supply facility must pay for the cost of the investigation and assessment up to the amount of the owner's or operator's deductible, and the department only shall provide monies that exceed the owner's or operator's deductible;
(2) the expeditious treatment, restoration, or replacement of potable water supplies;
(3) the rehabilitation of contaminated drycleaning facility sites, which consist of rehabilitation of affected soil, groundwater, and surface waters, using the most cost-effective alternative that is reliable and feasible technologically and that provides adequate protection of the public health, safety, and welfare and minimizes environmental damage in accordance with the site selection and rehabilitation criteria established by the department, except that nothing in this chapter may be construed to authorize the department to obligate funds for payment of costs which may be associated with, but are not integral to, site rehabilitation;
(4) the maintenance and monitoring of contaminated sites;
(5) the inspection and supervision of activities described in this section;
(6) the expenses of administering the fund by the department including the employment of department staff to carry out the department's duties described in this article;
(7) the payment of reasonable costs of restoring property as nearly as practicable to the conditions which existed before activities associated with contamination assessment or remedial action, as determined by the department.
(C) The fund may not be used to:
(1) restore sites which are contaminated by solvents normally used in drycleaning operations if the activities at a site are not related to the operation of a drycleaning facility or wholesale supply facility;
(2) restore sites that are contaminated by drycleaning solvents being transported to or from a drycleaning facility or wholesale supply facility or that are contaminated as a result of the delivery of drycleaning solvents to a drycleaning facility or wholesale supply facility on or after January 1, 1996. However, the fund may be used for the purposes set forth in Section 44-56-420(B) for sites that are contaminated by drycleaning solvents as a result of the delivery of drycleaning solvents to a drycleaning facility or wholesale supply facility before January 1, 1996, if the contamination did not result from gross negligence.
(3) fund any costs related to the restoration of a site that is proposed for listing or is listed on the State Priority List or on the National Priority List pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, or any site that is required to obtain a permit pursuant to the Resource Conservation and Recovery Act, as amended.
(4) pay any costs associated with a fine, penalty, or action brought against the owner or operator of a drycleaning facility or wholesale supply facility under local, state, or federal law;
(5) pay any costs incurred before July 1, 1995, for the remediation of a contaminated site;
(6) pay any costs to landscape or otherwise artificially improve a contaminated site;
(7) pay any costs related to the restoration of a wholesale supply storage site which is contaminated by Stoddard solvent and other hydrocarbon-based chemicals;
(8) pay any costs related to contamination assessment where no contamination from drycleaning solvents is discovered.
(D) The department may obtain an environmental liability insurance policy with a credible insurance company when a policy is available. The sole purpose of the policy is to initiate site rehabilitation at a site where the contamination from drycleaning solvents poses a clear, substantial, and present danger to a public water supply provided that the Drycleaning Restoration Fund is deemed to be insolvent for site rehabilitation of this public emergency. The policy must be paid for by the interest generated by the fund. Interest generated by the fund must be used for paying premiums for the policy based on a competitive bid. The State Treasurer shall select the insurance company and provide oversight and dispersement of the policy funds.
(E) The department shall promulgate regulations that provide for an initial contamination assessment to determine whether a drycleaning facility or wholesale supply facility is contaminated by drycleaning solvents. Payment for the initial assessment is as provided for in subsection (B), and site rehabilitation portions of the program must be administered through direct payments to contractors actually accomplishing the site rehabilitation and not through reimbursement to drycleaning or wholesale supply facility owners or operators.
(F) If the fund becomes insolvent and the letter of credit has been completely expended and the department declares a site is an emergency, the owner or operator of the drycleaning facility or warehouse is liable for the cost of that cleanup. However, once the fund becomes solvent and it repays the letter of credit, the owner or operator who paid for the cleanup must be reimbursed for the costs incurred to clean up the site through annual payments which may not exceed five percent of the total fund's average annual balance.
Section 44-56-430. (A) If the State Treasurer determines that the fund is insolvent, an environmental surcharge must be levied on every person for the privilege of engaging in the business of laundering and drycleaning clothing and other fabrics in this State at a rate of one-half percent on all gross sales for a minimum of one year. When the State Treasurer determines that the fund is solvent the one-half percent surcharge must be suspended.
(B) The surcharge imposed by this section is due on the first day of the month succeeding the month in which the charge is imposed and must be paid before the twenty-first day of each month. The surcharge must be reported on forms and in the manner prescribed in regulation by the Department of Revenue and Taxation. The proceeds of the surcharge, after deducting the administrative costs incurred by the Department of Revenue and Taxation in administering, auditing, collecting, distributing, and enforcing the surcharge, must be remitted to the State Treasurer and credited to the fund and must be used as provided in Section 44-56-420. For the purposes of this section, the proceeds of the surcharge include all funds collected and received by the Department of Revenue and Taxation including interest and penalties on delinquent surcharges.
The Department of Revenue and Taxation shall administer, collect, and enforce the surcharge imposed under this section pursuant to the procedures for administration, collection, and enforcement of the general stated sales tax imposed under Title 12, except as provided in this subsection. These procedures include, but are not limited to, those regarding the filing of consolidated returns, the granting of sale for resale exemptions, and the interest and penalties on delinquent taxes. The surcharge must not be included in the computation of estimated taxes, and the dealer's credit for collecting taxes or fees does not apply.
Section 44-56-440. (A) To encourage participation in the fund, the Board of the Department of Health and Environmental Control shall establish a moratorium on administrative and judicial actions by the department concerning drycleaning facilities and wholesale supply facilities resulting from the discharge of drycleaning solvents to soil or waters of the State. This moratorium applies only to those facilities deemed eligible as defined in this section. The board may review and determine the appropriateness of the moratorium at least annually. This review shall include, but is not limited to, consideration of these factors:
(1) the solvency of the fund as described in Section 44-56-420;
(2) prioritization of the sites;
(3) public health concerns related to the sites;
(4) eligibility of the sites;
(5) corrective action plans submitted to the department.
After review, the board may suspend all or a portion of the moratorium if necessary.
(B) A drycleaning facility or wholesale supply facility that is being operated as a drycleaning facility or wholesale supply facility at the time a request for determination of eligibility is filed and at which there is contamination from drycleaning solvents is eligible under this section regardless of when the contamination was discovered if the drycleaning facility or wholesale supply facility:
(1) has registered with the department;
(2) is determined by the department to be in compliance with department regulations regulating drycleaning facilities or wholesale supply facilities at the time a determination of eligibility is requested;
(3) has third-party liability insurance when and if the insurance becomes available at a reasonable cost, as determined by the Drycleaning Advisory Council and if the insurance covers liability for contamination that occurred both before and after the effective date of the policy;
(4) has provided documented evidence of contamination by drycleaning solvents;
(5) after December 1, 1996, demonstrates current certification pursuant to Section 44-56-470(D).
(C) A drycleaning facility or wholesale supply facility that ceases to be operated as a drycleaning facility or wholesale supply facility before the time a request for determination of eligibility is filed and at which there is contamination from drycleaning solvents is eligible under this section regardless of when the contamination was discovered provided the owner or operator of the drycleaning facility or wholesale supply facility provides documented evidence of the contamination by drycleaning solvents.
(D) A drycleaning facility that has been contaminated as a result of the discharge of drycleaning solvents by a supplier of solvents during the delivery of drycleaning solvents to a drycleaning facility first must utilize the insurance of the supplier to the full extent of the coverage for site rehabilitation before any funds may be expended from the fund for the rehabilitation of that portion of the site which was contaminated by the discharge during delivery.
(E) An eligible owner or operator of a drycleaning solvent contamination site must pay a deductible in accordance with the following:
(1) for those drycleaning facilities which are being operated as drycleaning facilities and which employ:
(a) up to four employees, the deductible is five thousand dollars;
(b) from five to ten employees, the deductible is ten thousand dollars;
(c) more than ten employees, the deductible is fifteen thousand dollars;
(2) for those drycleaning facilities which have ceased to be operated as drycleaning facilities, there is no deductible;
(3) for wholesale supply facilities, the deductible is twenty-five thousand dollars;
(4) for drycleaning facilities which are abandoned at which persons or entities are no longer involved in the drycleaning industry and never paid into the fund, the deductible is twenty-five thousand dollars;
(5) for a contaminated site which is no longer operated as a drycleaning plant site and the existing owner is involved in the drycleaning industry and has paid into the fund, the deductible is ten thousand dollars.
(F) An owner of a drycleaning facility or wholesale supply facility seeking eligibility under this subsection shall submit an application for determination of eligibility to the department on forms provided by the department. The department shall review the application and request any additional information within ninety days. The department shall notify the applicant within one hundred eighty days as to whether the facility is eligible.
(G) Eligibility under this subsection applies to the site of the drycleaning facilities or wholesale supply facilities. A determination of eligibility or ineligibility is not affected by the subsequent conveyance of the ownership of the drycleaning facilities or wholesale supply facilities.
(H) This section does not apply to a site where the department has been denied site access to implement this section or to drycleaning facilities owned or operated by a local government or by the state or federal government.
(I) A site owned by an owner of a drycleaning facility also at any time subsequent to July 1, 1996, misrepresented the number of employees upon which the registration fee provided for in Section 44-56-460 is based is not eligible for funds under this section.
Section 44-56-450. (A) In order to identify drycleaning facilities and wholesale suppliers which have experienced contamination resulting from the discharge of drycleaning solvents and to assure the most expedient rehabilitation of these sites, the owners and operators of drycleaning facilities and wholesale suppliers are encouraged to detect and report contamination from drycleaning solvents related to the operation of drycleaning facilities or wholesale supply facilities. The department shall establish reasonable guidelines for the written reporting of drycleaning contamination and shall distribute forms to registrants and to other interested parties upon request to be used for this purpose.
(B) A report of drycleaning solvent contamination at a drycleaning facility made to the department by a person in accordance with this article or regulations promulgated under this article may not be used directly as evidence of liability for the discharge in a civil or criminal trial arising out of the discharge.
Section 44-56-460. (A) The fund must be used to rehabilitate sites that pose a significant threat to the public health, safety, or welfare. The department shall promulgate regulations to establish priorities for state-conducted rehabilitation at contaminated drycleaning facilities or wholesale supply facilities sites based upon factors that include, but are not limited to:
(1) the degree to which human health, safety, or welfare may be affected by exposure to the contamination;
(2) the size of the population or area affected by the contamination;
(3) the present and future uses of the affected aquifer or surface waters, with particular consideration as to the probability that the contamination is substantially affecting or will migrate to and substantially affect a known public or private source of potable water; and
(4) the effect of the contamination on the environment.
(B) The department shall establish criteria by regulation for the purpose of determining, on a site-specific basis, the rehabilitation program tasks that comprise a site rehabilitation program and the level at which a rehabilitation program task and a site rehabilitation program may be deemed completed. Criteria for determining completion of site rehabilitation program tasks and site rehabilitation programs must be based upon the factors set forth in subsection (A)(1) and these factors:
(1) individual site characteristics, including natural rehabilitation processes;
(2) applicable state water quality standards;
(3) whether deviation from state water quality standards or from established criteria is appropriate, based upon the degree to which the desired rehabilitation level is achievable and can be reasonably and cost-effectively implemented within available technologies or control strategies, except that, where a state water quality standard is applicable, the deviation may not result in the application of standards more stringent than the standard.
(4) it is recognized that restoration of groundwater resources contaminated with certain drycleaning solvents, such as perchloroethylene, may not be achievable using currently available technology. In situations where available technology is not anticipated to meet water quality standards, the department, at its discretion, is encouraged to use innovative technology including, but not limited to, technology which has been field tested through the federal innovative technology program and which has engineering and cost data available.
(5) Nothing in this section may be construed to restrict the department from temporarily postponing completion of a site rehabilitation program for which drycleaning restoration funds are being expended whenever the postponement is considered necessary in order to make funds available for rehabilitation of a drycleaning facility or wholesale supply facility site with a higher priority status.
(C) The department may not expend from the fund yearly more than five percent of the average annual balance of the fund to pay for the costs at any one eligible site for the activities described in Section 44-56-420(B).
(D) The department shall promulgate regulations necessary for the implementation of this section.
Section 44-56-470. (A) An owner or operator of a drycleaning facility shall register each facility owned and in operation with the department by July 1, 1996, pay initial registration fees by October 1, 1996, and pay annual renewal registration fees as established by department regulations each subsequent year.
(B) An owner of a drycleaning facility shall submit to the department an initial and annual registration fee for each drycleaning facility. The fee for a drycleaning facility with:
(1) up to four employees is seven hundred fifty dollars;
(2) five to ten employees is one thousand, five hundred dollars;
(3) eleven or more employees is two thousand, two hundred fifty dollars.
The fee must be paid within thirty days after receipt of billing by the department.
(C) Revenue derived from the registration fees must be submitted to the State Treasurer and credited to the Drycleaning Facility Restoration Trust Fund.
(D) Before December 1, 1996, an operator of a drycleaning facility shall receive certification from the International Fabricare Institute, the Neighborhood Cleaners Association, or some other comparable nationally recognized drycleaning industry association certifying that the operator has demonstrated a level of competency to operate a drycleaning facility in accordance with the highest standards of the drycleaning industry.
(E) Before December 31, 1998, an owner of a drycleaning facility shall install dikes or other containment structures around each machine or item of equipment in which drycleaning solvents are used. The dikes or containment structures must be capable of containing one-third of the capacity of the total tank capacity of each machine. To the extent practicable, an owner of a drycleaning facility shall seal or otherwise render impervious those portions of all diked floor surfaces upon which any drycleaning solvents may leak, spill, or otherwise be released.
Section 44-56-480. (A) Beginning July 1, 1995, an environmental surcharge is levied on the privilege of producing in, importing into, or causing to be imported into the State perchloroethylene (tetrachloroethylene) and Stoddard solvent. A surcharge of ten dollars per gallon on perchloroethylene and two dollars per gallon on Stoddard solvent is levied on each gallon to be used for drycleaning purposes when first imported into or produced in the State.
(B) A person producing in, importing into, or causing to be imported into this State perchloroethylene and Stoddard solvent for sale, use, or otherwise must register with the Department of Revenue and Taxation and become licensed for the purposes of remitting the surcharge pursuant to this section. The person must register as a producer or importer of perchloroethylene or Stoddard solvent. Persons operating at more than one location only are required to have a single registration. The fee for registration is thirty dollars. Failure to timely register is a misdemeanor and, upon conviction, the person must be fined up to one thousand dollars or imprisoned up to thirty days.
(C) The surcharge imposed by this section is due on the first day of the month succeeding the month of production, importation, or removal from a storage facility and must be paid on or before the twentieth day of the month. The surcharge must be reported on forms and in the manner prescribed by the Department of Revenue and Taxation by regulation.
(D) A person subject to the surcharge under this section or a person who sells surcharge-paid perchloroethylene or Stoddard solvent, other than a retail dealer, must separately state the amount of the surcharge paid on a charge ticket, sales slip, invoice, or other tangible evidence of the sale or must certify on the sales document that the surcharge required pursuant to this section has been paid.
(E) All perchloroethylene and Stoddard solvent to be used for drycleaning purposes which are imported, produced, or sold in this State are presumed to be subject to the surcharge imposed by this section. A person, except the final retail consumer, who has purchased perchloroethylene or Stoddard solvent for use in drycleaning for sale, use, consumption, or distribution in this State must document that the surcharge imposed by this section has been paid or must pay the surcharge directly to the Department of Revenue and Taxation in accordance with subsection (C).
(F) An annual fee based on the number of employees, as defined in Section 44-56-410, must be remitted to each drycleaning facility. The annual fee for facilities having one to four employees is seven hundred fifty dollars. The annual fee for facilities having five to eleven employees is one thousand, five hundred dollars. The annual fee for facilities having eleven or more employees is two thousand, two hundred fifty dollars.
(G) The surcharge imposed by this section must be remitted to the Department of Revenue and Taxation. The payment must be accompanied by the forms as the Department of Revenue and Taxation prescribes. The proceeds of the surcharge, after deducting the administrative costs incurred by the Department of Revenue and Taxation in administering, auditing, collecting, distributing, and enforcing the surcharge, must be remitted by the Department of Revenue and Taxation to the State Treasurer to be credited to the Drycleaning Facility Restoration Trust Fund and must be used as provided in Section 44-56-420. For the purposes of this section, the proceeds of the surcharge include all funds collected and received by the Department of Revenue and Taxation, including interest and penalties on delinquent surcharges.
(H) The Department of Revenue and Taxation shall administer, collect, and enforce the surcharge authorized under this section pursuant to the same procedures used in the administration, collection, and enforcement of the general state sales tax imposed under Title 12
except as provided in this section. Provisions of Title 12 regarding the department's authority to audit and make assessments, the keeping of books and records, and interest and penalties on delinquent taxes apply. The surcharge may not be included in the computation of estimated taxes nor does the dealer's credit for collecting taxes or fees apply to the surcharge.
(I) The Department of Revenue and Taxation may employ persons and incur other related expenses using only monies available in the fund. The Department of Revenue and Taxation may promulgate regulations and prescribe and shall publish forms as may be necessary to effectuate the purposes of this section.
(J) The Department of Revenue and Taxation may establish audit procedures and assess delinquent surcharges.
(K) Perchloroethylene and Stoddard solvent used for drycleaning exported from the first storage facility at which it is held in this State by the producer or importer is exempt from the surcharge pursuant to this section. Anyone exporting perchloroethylene or Stoddard solvent on which the surcharge has been paid may apply for a refund or credit. The Department of Revenue and Taxation may require information as it considers necessary in order to approve the refund or credit.
(L) The Department of Revenue and Taxation may authorize:
(1) a quarterly return and payment when the surcharge remitted by the licensee for the preceding quarter did not exceed one hundred dollars;
(2) a semiannual return and payment when the surcharge remitted by the licensee for the preceding six months did not exceed two hundred dollars;
(3) an annual return and payment when the surcharge remitted by the licensee for the preceding twelve months did not exceed four hundred dollars.
Section 44-56-490. (A) There is created the Drycleaning Advisory Council to advise the Department of Health and Environmental Control on matters relating to regulations and standards which affect drycleaning and related industries.
(B) The council is composed of:
(1) six representatives of the drycleaning industry;
(2) one representative of the wholesale industry;
(3) one representative of the real estate industry;
(4) one hydrogeologist;
(5) one representative of drinking water consumers;
(6) one representative of the banking industry;
(7) one representative from the Department of Health and Environmental Control;
(8) one representative from the Department of Revenue and Taxation.
(C) Members enumerated in subsection (B)(1) through (6) must be appointed by the Governor with the advice and consent of the Senate and shall serve terms of two years and until their successors are appointed and qualify. The representative of the Department of Health and Environmental Control must be appointed by the Director of the department and the representative of the Department of Revenue and Taxation must be appointed by the Director of the Department of Revenue and Taxation, and both serve ex officio and for terms of two years and until their successors are appointed and qualify. The chairman of the council must be elected by the members of the council at the first meeting of each new term.
(D) The council and the department shall create a mechanism in which consultants' credentials, work objectives and plans, proposed costs ranging from assessment, cleanup, and monitoring are outlined and submitted in writing for the council and the department's approval. The department shall establish a list of those vendors who are qualified to perform work to be financed by the fund. Vendors must be recertified every two years."
SECTION 2. Notwithstanding Section 44-56-490(C) of the 1976 Code, as added by Section 1 of this act, the term for members initially appointed to the Drycleaning Advisory Council is for three years and the six representatives of the drycleaning industry must be appointed by the Governor from nominations submitted by the South Carolina Drycleaning Council, Inc.
SECTION 3. This act is repealed July 1, 2015, unless reauthorized by the General Assembly.
SECTION 4. This act takes effect July 1, 1995.