A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING SECTION 44-2-20, RELATING TO DEFINITIONS PERTAINING TO THE STATE UNDERGROUND PETROLEUM ENVIRONMENTAL RESPONSE BANK ACT OF 1988, SO AS TO DEFINE A PIPELINE FACILITY IN ACCORDANCE WITH 49 U.S.C. CHAPTER 601; BY AMENDING SECTION 44-2-40, RELATING TO THE SUPERB ACCOUNT AND SUPERB FINANCIAL RESPONSIBILITY FUND, SO AS TO ADJUST THE ALLOWABLE COSTS FOR SITE REHABILITATION BY THE FUND AND MAKE OTHER CONFORMING CHANGES; BY AMENDING SECTION 44-2-60, RELATING TO THE REGISTRATION OF UNDERGROUND STORAGE TANKS AND THE ENVIRONMENTAL IMPACT FEE, SO AS TO SET CERTAIN YEARS FOR THE RENEWAL FEE TO BE ADJUSTED; BY AMENDING SECTION 44-2-130, RELATING TO COMPENSATION FROM THE SUPERB ACCOUNT, SO AS TO MAKE CONFORMING CHANGES; AND BY AMENDING SECTION 44-2-150, RELATING TO THE SUPERB ADVISORY COMMITTEE, SO AS TO DEFINE THE MEMBERSHIP OF THE SUPERB ADVISORY COMMITTEE.

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  Section 44-2-20 of the S.C. Code is amended to read:

 

    Section 44-2-20. When used in this chapter, the listed terms have the following meanings unless the context clearly requires otherwise:

    (1) "Affiliate" means persons who are affiliates to each other if, directly or indirectly, either one controls or has the power to control the other or a third person controls or has the power to control both.  Indicia of control include, but are not limited to, interlocking management or ownership, identity of interest among family members, shared facilities and equipment, common use of employees, or a business entity organized following the suspension, debarment, or exclusion of a person, under applicable regulation, where the person has the same or similar management, ownership, or principal employees as the suspended, debarred, or excluded person.

    (2) "Bodily injury" means actual medically documented costs and medically documentable future costs of adverse health effects that have resulted from exposure to a release of petroleum or petroleum products from an underground storage tank.  Bodily injury does not mean pain and suffering.

    (3) "Committed funds" means that portion of the Superb Account reserved as a result of action by the Department of Health and Environmental ControlServices to approve costs for planned site rehabilitation activities.

    (4) "Compensation" means billing the Superb Account for costs associated with site rehabilitation after receiving prior approval from the department and in accordance with regulations promulgated pursuant to this chapter and criteria established by the department as authorized by this chapter.  All compensation is considered committed funds.

    (5) "Department" means the Department of Health and Environmental ControlServices.

    (6) "Familial relationship" means a connection or association by family or relatives, in which a family member or relative has a material interest.  Family or relatives include father, mother, son, daughter, brother, sister, uncle, aunt, first cousin, nephew, niece, husband, wife, father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, stepfather, stepmother, stepson, stepdaughter, stepbrother, stepsister, half brother, half sister, grandparent, great grandparent, grandchild, great grandchild, step grandparent, step great grandparent, step grandchild, step great grandchild, or fiancee.

    (7) "Financial relationship" means a connection or association through a material interest or sources of income which exceed five percent of annual gross income from a business entity.

    (8) "Fund" means the funds provided for under this chapter and deposited in the Superb Account or the Superb Financial Responsibility Fund hereinafter created.

    (9) "Occurrence" means an accident, including continuous or repeated exposure to conditions which results in a release from an underground storage tank.

    (10) "Operator" means any person in control of, or having responsibility for the daily operation of an underground storage tank.

    (11) "Orphan site" means a site where there has been a release from an underground storage tank but responsible party issues have not been resolved, and site rehabilitation has not been undertaken.

    (12) "Owner" means:

       (a) in the case of an underground storage tank system in use on November 8, 1984, or brought into use after that date, a person who owns an underground storage tank system used for storage, use, or dispensing of regulated substances;

       (b) in the case of any underground storage tank system in use before November 8, 1984, but no longer in use on that date, a person who owned such an underground storage tank immediately before the discontinuation of its use;  or

       (c) a person who has assumed legal ownership of the underground storage tank through the provisions of a contract of sale or other legally binding transfer of ownership.

    (13) "Person" means any individual, partner, corporation organized or united for a business purpose, or a governmental agency.

    (14) "Petroleum" and "petroleum product" means crude oil or any fraction thereof which is liquid at standard conditions of temperature and pressure (60 degrees Fahrenheit and 14.7 pounds for each square inch absolute), including any such liquid which consists of a blend of petroleum and alcohol and which is intended for use as a motor fuel.  The terms "petroleum" and "petroleum product" do not include any:

       (a) hazardous substance as defined in Section 101(14) of the Federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA);

       (b) substance, other than used oils, regulated as a hazardous waste under Subtitle C of Title II of the Federal Resource Conservation and Recovery Act of 1976 (RCRA);  or

       (c) mixture of petroleum or a petroleum product containing any such hazardous substance or hazardous waste in greater than de minimis quantities.

    (15) "Property damage" means a documented adverse physical impact to structures or property as a result of a release of petroleum or petroleum products from an underground storage tank.  The total damage is limited to the difference between the original fair market value of the property or structure and the residual value or the depreciated replacement cost of the property or structure, whichever is less.  The documented presence of petroleum or petroleum products at levels not posing an unacceptable risk to human health or environment shall not be grounds for a claim or suit.

    (16) "Punitive damages" means damages awarded by a court to an injured party to punish the defendant for a serious wrong.  This award only is in addition to actual damages awarded for bodily injury or property damage.

    (17) "Regulated substance" means:

       (a) a substance defined in Section 101(14) of CERCLA, but not including any substance regulated as a hazardous waste under Subtitle C of RCRA;  and

       (b) petroleum and petroleum products.  The term "regulated substance" includes, but is not limited to, petroleum and petroleum-based substances comprised of a complex blend of hydrocarbons derived from crude oil through processes of separation, conversion, upgrading, and finishing, such as motor fuels, jet fuels, distillate fuel oils, residual fuel oils, lubricants, petroleum solvents, and used oils.

    (18) "Related interest" means affiliated companies, principal owners of the client company, or any other party with which the client deals where one of the parties can influence the management or operation policies of the other.

    (19) "Release" means any spilling, leaking, emitting, discharging, escaping, leaching or disposing from an underground storage tank into subsurface soils, groundwater, or surface water.

    (20) "Site rehabilitation" means cleanup actions taken in response to a release from an underground, storage tank which includes, but is not limited to, investigation, evaluation, planning, design, engineering, construction, or other services put forth to investigate or clean up affected subsurface soils, groundwater, or surface water.

    (21) "Site rehabilitation contractor" means any person who carries out site rehabilitation actions, including persons retained or hired by these persons to provide services related to site rehabilitation.

    (22) "Substantial compliance" means that an underground storage tank owner or operator has demonstrated a good faith effort to comply with regulations necessary and essential in preventing releases, in facilitating their early detection, and in mitigating their impact on public health and the environment.

    (23) "Third party claim" means a civil action brought or asserted by an injured party against an owner or operator of an underground storage tank for bodily injury or property damages resulting from a release of petroleum or petroleum products from an underground storage tank.  The underground storage tank owner or operator, the owner of the property where the underground storage tank is located, a person to whom properties are transferred in anticipation of damage due to a release, employees or agents of an owner or operator, or employees or agents of the property owner must not be considered a third party.

    (24) "Underground storage tank" or "UST" means any one or combination of tanks, including underground pipes connected to itthereto, which is used to contain an accumulation of regulated substance, and the volume of which is ten percent or more beneath the surface of the ground.  The term does not include any:

       (a) farm or residential tank of one thousand one hundred gallons or less capacity used for storing motor fuel for noncommercial purposes;

       (b) tank used for storing heating oil for consumptive use on the premises where stored;

       (c) septic tank;

       (d) pipeline facility, including gathering line which is:, regulated under the Federal Natural Gas Pipeline Safety Act of 1968 or the Federal Hazardous Liquid Pipeline Safety Act of 1979, or any pipeline facility regulated under state laws comparable to the provisions of these federal provisions of law;

           (i) regulated under 49 U.S.C. Chapter 601; or

           (ii) an intrastate pipeline facility regulated under state laws provided in 49 U.S.C. chapter 601 and which is determined by the Secretary of Transportation to be connected to pipeline, or to be operated or intended to be capable of operating at a pipeline pressure or as an integral part of a pipeline;

       (e) surface impoundment, pit, pond or lagoon;

       (f) storm water or wastewater collection system;

       (g) flow-through process tank;

       (h) liquid trap or associated gathering lines directly related to oil or gas production and gathering operations;

       (i) storage tank situated in an underground area, such as a basement, cellar, mineworking, drift, shaft, or tunnel, if the petroleum storage tank is situated upon or above the surface of the floor;

       (j) hydraulic lift reservoirs, such as for automobile hoists and elevators, containing hydraulic oil;  or

       (k) any pipes connected to any tank which is described in subitems (a) through (j).

 

SECTION 2.  Section 44-2-40 of the S.C. Code is amended to read:

 

    Section 44-2-40. (A)(1) There is created within the state treasury two separate and distinct accounts which are to be administered by the Department of Health and Environmental ControlServices.  The "Superb Account" and the "Superb Financial Responsibility Fund" are created to assist owners and operators of underground storage tanks containing petroleum and petroleum products to the extent provided for in this chapter but not to relieve the owner or operator of any liability that cannot be satisfied by the provisions of this chapter.

        (2) The Superb Account must be used for payment of usual, customary, and reasonable costs for site rehabilitation of releases from underground storage tanks containing petroleum or petroleum products.

        (3) The Superb Financial Responsibility Fund must be used for compensating third parties for actual costs for bodily injury and property damage caused by accidental releases from underground storage tanks containing petroleum or petroleum products.  The Superb Financial Responsibility Fund must not be used for reimbursing claims for punitive damages.

        (4) Except for releases reported before July 1, 1994, sites where the underground storage tank, at the time of discovery and reporting of the release to the department, is not in substantial compliance with regulations promulgated pursuant to Section 44-2-50(A), are not eligible for compensation from the Superb Account, and no third party claims resulting from that release may be paid from the Superb Financial Responsibility Fund.

    (B) The Superb Account is established to ensure the availability of funds for the rehabilitation of releases at sites contaminated with petroleum or petroleum products released from an underground storage tank and for administration of the underground storage tank regulatory program established in this chapter.  The department shall use the fund to pay the usual, customary, and reasonable costs of site rehabilitation up to a maximum of one two million dollars per occurrence as a result of a release from an underground storage tank containing petroleum or petroleum products for releases that were reported to the department before July 1, 1993, and in excess of twenty-five thousand dollars and up to a maximum of onetwo million dollars per occurrence for site rehabilitation for releases reported to the department on or after July 1, 1993.  The department shall use the fund to pay these costs of site rehabilitation by owners or operators who qualify for compensation.  The department may use the fund to clean up a release at a site where the underground storage tank owner or operator does not qualify for compensation or a site which does qualify but the owner or operator is unwilling or unable to undertake site rehabilitation, and the department shall diligently pursue the recovery of any sum so incurred from the owner or operator responsible or from the United States government under any applicable federal law, unless the department finds the amount involved too small or the likelihood of success too uncertain.  The fund must be further used for the payment of costs incurred by the department in providing field and laboratory services and other assistance by the department in the investigation of alleged contamination.  This fund must not be used for the cleanup of any other pollutant.  Funds in the Superb Account also may not be used to pay any liability claims against the owners or operators of underground storage tanks.  The Superb Account must be credited with all fees, charges, commitments, and judgments allowable under this chapter.  Charges against the Superb Account only may be made in accordance with the provisions of this chapter.  Beginning November 1, 1994, the department shall transfer on a monthly basis one hundred thousand dollars of the funds generated by the environmental impact fee from the Superb Account to the Superb Financial Responsibility Fund until the balance of the Superb Financial Responsibility Fund reaches two one million dollars.  Subsequently, monthly transfers of one hundred thousand dollars from the Superb Account to the Superb Financial Responsibility Fund shall only occur when the balance of the Superb Financial Responsibility Fund becomes less than one million five hundred thousand dollars, and the monthly transfers shall continue until the balance of the Superb Financial Responsibility Fund reaches twoone million dollars. Additionally, prior to the end of each calendar year, the department shall transfer from the Superb Financial Responsibility Fund to the Superb Fund the total amount of funds exceeding one million dollars. Committed funds for site rehabilitation activity revert to uncommitted status after four months of initiation of commitment if no invoices for that commitment have been received by the department.

    (C)(1) The Superb Financial Responsibility Fund must be used to reimburse owners or operators who compensate third parties or compensate third parties directly, only for bodily injury and property damages caused by releases from underground storage tanks containing petroleum or petroleum products, exclusive of any legal costs of the parties, and only when there are judgments, settlements, alternative dispute resolution outcomes, or consent orders for damages for bodily injury or property damage, or both, that are approved by a court of competent jurisdiction within the State of South Carolina.  To seek payment from the Superb Financial Responsibility Fund, the owner or operator must notify the department in writing by registered mail within sixty days of receipt of the third party claim or suit and must defend in good faith against the claim or suit.  At its discretion, the department may intervene in the claim or suit to protect the Superb Financial Responsibility Fund.  Intervention includes, but is not limited to, defending the claim, approving the claim, or participating in the settlement of the claim.

        (2) The costs of claim or suit intervention by the department must be recoverable from the Superb Financial Responsibility Fund.  These intervention costs must not affect the per occurrence assurance amounts provided by the Superb Account or the Superb Financial Responsibility Fund.

        (3) The Superb Financial Responsibility Fund is not liable for any claims where no owner or operator exists.

        (4) The amount of money in the Superb Financial Responsibility Fund, the method of collection, or information regarding the administration of the fund is not admissible as evidence in a trial for damages potentially payable by the Superb Financial Responsibility Fund.

    (D)(1) The Superb Account and the Superb Financial Responsibility Fund shall provide combined coverage for site rehabilitation and third party claims, respectively, not to exceed onetwo million dollars per occurrence.  The estimated cost of site rehabilitation must be reserved from the combined coverage before payment of third party claims.

        (2) The underground storage tank owner or operator must be responsible for the first twenty-five thousand dollars per occurrence for releases of petroleum and petroleum products from underground storage tanks reported to the department subsequent to July 1, 1993.

        (3) Nothing in this chapter establishes or creates any liability or responsibility on the part of the department or the State as administrators of the Superb Account and the Superb Financial Responsibility Fund to pay any costs for site rehabilitation or third party claims from any source other than the Superb Account and the Superb Financial Responsibility Fund created by this chapter, and the department and the State as administrators of the Superb Account and the Superb Financial Responsibility Fund have no liability or responsibility to make payments for cleanup costs or third party claims if the funds are insufficient.  If the funds are insufficient to make the payments at the time the claim is filed, these claims must be paid in the order of filing at such time as monies accrue in each account, respectively.

        (4) The one hundred dollar underground storage tank registration fee and annual renewal fee may be used by the department for the administration of the underground storage tank program established by this chapter and its activities as trustees of the Superb Account and the Superb Financial Responsibility Fund, exclusive of legal costs outlined in subsection (C).

 

SECTION 3.  Section 44-2-60 of the S.C. Code is amended to read:

 

    Section 44-2-60. (A) The owner or operator of an underground storage tank which stores or is intended to store a regulated substance shall register the tank with the department. The owner or operator of the tank shall display a registration certificate listing all registered tanks at a facility and in plain view in the office or the kiosk of the facility where the tanks are registered. Upon application for a registration certificate, the owner or operator shall pay to the department an initial registration fee of one hundred dollars a for each tank;  however, the department may prorate the initial registration fees on a daily basis for underground storage tanks installed on or after July 1, 1997. The owner or operator shall pay to the department an annual renewal fee of one hundred dollars a tank a each year. Beginning JanuaryAugust 1, 20122029, the annual renewal fee for each tank will be as follows:

       (1) 20122029:- two hundred dollars;

       (2) 20132034:-three two hundred fifty dollars; and

       (3) 20142039: -four three hundred dollars.;  and

       (4) 2015-five hundred dollars.

    The additional revenue generated from the tank fee increases listed above must be deposited into the Superb Account. No portion of the increases may be used by the department for administration of the program or for orphan sites as defined in Section 44-2-20(11).

    When the Superb Account is credited with an additional thirty-six million dollars from the increase in tank fees, general appropriations, settlements, or other sources of funds including federal funds designated for cleanup, or declared insolvent, the tank registration fee shall revert to one hundred dollars annually for each tank beginning January first of the next year.

    (B) No person may place a regulated substance and no owner or operator may cause a regulated substance to be placed into an underground storage tank for which the owner or operator does not hold a currently valid registration. The department may not issue a registration certificate until all past and present fees and penalties owed on a tank are paid. The department may not issue a registration certificate to any owner or operator who has not complied with all terms of a consent or final administrative order issued under Section 44-2-140.

       (1) All fees are due to the department within thirty days of billing. The department shall issue a late notice, with no penalty due, to an underground storage tank owner or operator who has unpaid fees thirty days after billing. An owner or operator who fails to pay the fees within sixty days of the initial billing must pay a ten percent penalty in addition to the ten percent penalty for any fees remaining unpaid ninety days after the initial billing. An owner or operator with unpaid fees ninety days after the initial billing is subject to additional enforcement action as provided for in Section 44-2-140.

       (2) The department may not disburse Superb Account or Superb Financial Fund monies to any person or persons for the rehabilitation of a petroleum or petroleum product release from any underground storage tank or underground storage tank system where all past and present fees and penalties owed on the applicable tank have not been paid.

       (3) The funds generated by the registration and late penalty fees on annual tank renewals may be used by the department for administration of the provisions of this chapter and for administration of the underground storage tank regulatory program established by this chapter. The amount used for administration may not exceed the amount collected from funds received from federal grants specifically designated for administrative use, interest, the first one hundred dollars for annual tank registration fees, annual renewal fees, and late penalty fees on annual tank renewals.

    (C) In addition to the inspection fee of one-fourth cent a gallon imposed pursuant to Section 39-41-120, an environmental impact fee of one-half cent a gallon is imposed which must be used by the department for the purposes of carrying out the provisions of this chapter. This one-half cent a gallon environmental impact fee must be paid and collected in the same manner that the one-fourth cent a gallon inspection fee is paid and collected except that the monies generated from these environmental impact fees must be transmitted by the Department of Agriculture to the Department of Health and Environmental ControlServices which shall deposit the fees as provided for in Section 44-2-40.

 

SECTION 4.  Section 44-2-130(E) of the S.C. Code is amended to read:

 

    Section 44-2-130.      (E)(1) An owner or operator of an underground storage tank or his agent seeking to qualify for compensation from the Superb Account for site rehabilitation shall submit a written application to the department.  The written application must be on a form specified by the department and include certification that site rehabilitation is necessary, the tanks at the site have been registered in compliance with applicable law and regulations, and all registration fees have been paid.  The department shall accept certification that the release at the site is in need of rehabilitation if the certification is provided jointly by the owner or operator and a South Carolina registered professional geologist or engineer, and if the certification is supported with geotechnical data which reasonably justifies the claim.  Upon final determination the department shall provide written notice to the applicant of its findings including detailed reasons for any denial.  Any denial of an application must be appealable to the Board of Health and Environmental Control.  The department is exempt from this time frame for applications which are received within three months of the close of the grace period allowed in Section 44-2-110.

       (2) The owner or operator responsible for conducting the site rehabilitation or his agents shall keep and preserve suitable records of hydrological and other site assessments, site plans, contracts, accounts, invoices, or other transactions related to the cleanup and rehabilitation and the records must be accessible to the department during regular business hours.

 

SECTION 5.  Section 44-2-150 of the S.C. Code is amended to read:

 

    Section 44-2-150.  (A) There is established a Superb Advisory Committee to study the implementation and administration of the Superb program, including the Superb Account, the Superb Financial Responsibility Fund, and the regulatory requirements applicable to underground storage tanks;  to make recommendations to the department and the General Assembly on ways to improve the efficiency of the program and to maximize available funds;  and to advise the department on administration of the program.

    (B) The members of the committee must be appointed before August 1, 1994.

    (C) The committee shall consist of fourteenfifteen members, appointed by the commissioner of the department as follows:

       (1) one member representing the general public;

       (2) two members representing environmental organizations;

       (3) one member representing the South Carolina Petroleum Council;

       (4) one member two members representing the South Carolina Convenience and Petroleum Marketers Association, one of whom must be an underground storage tank owner as defined in Section 44-2-20 (22);

       (5) one member representing the South Carolina Service Station Dealers Association  business that specializes in the sale or service of petroleum equipment;

       (6) one member representing the South Carolina Chamber of Manufacturers and Commerce;

       (7) one member representing the South Carolina Bankers Association;

       (8) one member representing a business that specializes in the assessment or remediation, or both, of contamination resulting from leaking underground storage tanks;

       (9) one member representing the South Carolina Department of Insurance;

       (10) one member representing the Department of Health and Environmental Control Services;

       (11) one member representing the State Department of Administration, Division of General Services;

       (12) one member representing the Municipal Association of South Carolina;  and

       (13) one member representing the South Carolina Association of Counties.

    (D) The committee shall have the following duties and responsibilities:

       (1) to conduct an initial review of the management of the Superb Program and the Superb Financial Responsibility Fund and the availability of funds in the account and the fund and thereafter to monitor the management of the account and the fund;

       (2) to determine the success of the Superb program in achieving its statutory purpose of providing a means for the investigation and cleanup of spills, leaks, and other discharges from underground storage tanks without delay, which determination shall include a list of all sites cleaned up pursuant to the Superb program;

       (3) to review the administration of the Superb program and to determine the feasibility and desirability of maintaining or separating the function of environmental regulation from the function of administering the Superb Account and Superb Financial Responsibility Fund;

       (4) to make recommendations on the development of regulations for prioritizing sites;

       (5) to make recommendations on the development of regulations establishing reasonable site-specific cleanup goals and utilizing risk-based goals for corrective action;

       (6) to review the financial solvency of the Superb Account and to examine and make recommendations regarding alternative funding mechanisms;

       (7) to review the interaction between the Federal Trust Fund and the Superb Account;

       (8) to review and provide recommendations on standards and procedures to reduce time and costs to achieve site cleanup in a high quality and efficient manner;

       (9) to study and make recommendations regarding the feasibility of utilizing a competitive bidding process in any or all stages of the Superb program;

       (10) to study and make recommendations regarding the feasibility of the State's contracting with private entities to provide services for the program, such as having private insurers process compensation applications;

       (11) to make recommendations regarding actions the department could take to facilitate commercial lending activity involving Superb-qualified sites and;

       (12) to make recommendations regarding the development of an appeals process for those owners or operators who are denied access to the Superb fund because they were found not to be in substantial compliance under Section 44-2-40(B).

    (E) Members of the committee shall serve for terms of two years and until their successors are appointed and qualify.  The committee shall selection a chairman and vice-chairman.  The committee shall adopt operating procedures, including attendance requirements.  A majority of the members constitute a quorum to do business.  The committee shall meet on the call of the chairman or of a majority of the members;  however, the committee shall meet at least monthly before the date that its initial report required by subsection (F) is due.  The department shall provide the necessary staff and the administrative facilities and services to the committee and shall cooperate fully with the committee, including providing information necessary for the committee to perform its functions.

    (F) Not later than December 16, 1994, the committee shall submit a report to the department and General Assembly addressing the issues identified in subsection (D) of this section.  The report shall include recommendations for any statutory changes that the committee determines should be made in the Superb program and recommendations regarding regulations required to be promulgated pursuant to Section 44-2-50(B).

    (G) Following its initial report, the committee shall submit to the department and the General Assembly by the end of each calendar year an annual report which, at a minimum, shall address the financial status and viability of the Superb Account and the Superb Financial Responsibility Fund, the number of sites successfully remediated pursuant to the Superb program, the number of sites remaining to be remediated, and any statutory or regulatory changes that the committee recommends.

 

SECTION 6.  This act takes effect upon approval by the Governor.

----XX----