HOUSE BILL NO. 6023 A bill to amend 1994 PA 451, entitled "Natural resources and environmental protection act," by amending sections 21502, 21503, 21506a, 21506b, 21510, 21510a, 21510d, 21515, 21516, 21518, 21519, 21519a, 21521, 21524, and 21548 (MCL 324.21502, 324.21503, 324.21506a, 324.21506b, 324.21510, 324.21510a, 324.21510d, 324.21515, 324.21516, 324.21518, 324.21519, 324.21519a, 324.21521, 324.21524, and 324.21548), sections 21502, 21503, 21510, 21510a, 21515, 21516, and 21521 as amended by 2016 PA 380, sections 21506a and 21510d as amended and section 21519a as added by 2017 PA 134, and section 21506b as added and sections 21518, 21519, 21524, and 21548 as amended by 2014 PA 416; and to repeal acts and parts of acts. the people of the state of michigan enact: Sec. 21502. As used in this part: (a) "Administrator" means the administrator of the authority as provided for in section 21525. (b) "Affiliate" means a person that directly, or indirectly through 1 or more intermediaries, controls the person specified. (c) "Approved claim" means a claim that is approved pursuant to under section 21510. (d) "Authority" means the underground storage tank authority created in section 21523. (e) "Board of directors" or "board" means the board of directors of the authority. (f) "Bond proceeds account" means the account within the fund to which proceeds of bonds or notes issued under this part have been credited. (g) "Bonds or notes" means the bonds, notes, commercial paper, other obligations of indebtedness, or any combination of these, issued by the finance authority pursuant to in accordance with this part. (h) "Bulk transfer" means a transfer of refined petroleum or a refined petroleum product from, or purchase for resale by, a refiner, pipeline terminal operator, supplier, or marine terminal operator to or from another refiner, pipeline terminal operator, supplier, or marine terminal operator through pipeline tender or marine delivery, including pipeline movements of refined petroleum or a refined petroleum product from 1 or more marine vessel movements of refined petroleum or a refined petroleum product. Refined petroleum or a refined petroleum product in a refinery, pipeline, terminal, or marine vessel transporting refined petroleum or a refined petroleum product to a refinery or terminal is in the bulk transfer terminal system. Notwithstanding anything to the contrary in this subdivision, refined petroleum or a refined petroleum product transferred or purchased for resale by a refiner, pipeline terminal operator, supplier, or marine terminal operator must be delivered to or otherwise remain within the bulk transfer terminal system prior to before removal across the rack in order to constitute a bulk transfer. (i) "Bulk transfer terminal system" means the refined petroleum or refined petroleum product distribution system consisting of refineries, pipelines, marine vessels, and terminals and includes refined petroleum or refined petroleum product storage tanks and refined petroleum or refined petroleum product storage facilities that are part of a refinery, boat terminal transfer, or terminal owned, operated, or controlled by a refiner, marine terminal operator, or pipeline terminal operator. (j) "Claim" means the submission by the owner or operator or his the owner's or her operator's representative of documentation on an application requesting payment by the authority. A claim shall must include, at a minimum, a completed and signed claim form and the name, address, and telephone number of the owner or operator. (k) "Claimant" means a person to whom an approved claim is assigned or transferred. (l) (k) "Claims "Claim limit" means $1,000,000.00 per release. Two or more claims arising out of the same, interrelated, associated, repeated, or continuous releases or a series of related releases shall be subject to 1 claims limit. Any claim that takes place over 2 or more claim periods shall be subject to 1 claims limit.minus the appropriate deductible amount. (m) (l) "Claim period" means a 1-year period commencing on beginning October 1 of each year and ending on September 30 the following year. (n) (m) "Claim period aggregate limit" means the following aggregate claims limit for all releases discovered during a claim period: (i) For owners, operators, and affiliates of 1 to 100 refined petroleum underground storage tanks located in this state, $1,000,000.00. (ii) For owners, operators, and affiliates of more than 100 refined petroleum underground storage tanks located in this state, $2,000,000.00. (o) "Closure" means department approval of a closure report for a release covered by an approved claim in accordance with section 21315. Closure includes approval of a closure report with conditions after the conditions are met. (p) "Confirmed release" means a release of refined petroleum that is reported to the department of licensing and regulatory affairs on a form created by the department of licensing and regulatory affairs and designated on the form as a confirmed release. (q) (n) "Controls" means the possession or the contingent or noncontingent right to acquire possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities or interests, by contract, other than a commercial contract for goods or nonmanagement services, by pledge of securities, or otherwise, unless the power is the result of an official position with or corporate office held by the person. (r) (o) "Corrective action" means that term as it is defined in section 21302. (s) (p) "Deductible amount" means the amount of corrective action costs or indemnification costs that are required to be paid by an owner or operator a claimant as provided in section 21510a. (t) (q) "Department" means the department of environmental quality.environment, Great Lakes, and energy. (u) (r) "Eligible person" means an owner or operator who meets the eligibility requirements under this part to submit a claim. (s) "Excluded liquid" means that term as defined in 26 CFR 48.4081-1. (v) "Federally recognized tribe" means a Native American tribal entity that is recognized as having a government-to-government relationship with the United States, that has the responsibilities, powers, limitations, and obligations attached to that designation, and that is eligible for funding and services from the federal government. (w) (t) "Finance authority" means the Michigan finance authority created by Executive Reorganization Order No. 2010-2, MCL 12.194. (x) (u) "Financial responsibility requirements" means the financial responsibility for taking corrective action and for compensating third parties for bodily injury and property damage caused by a release from a refined petroleum underground storage tank system that the owner or operator of a refined petroleum underground storage tank system must demonstrate under part 211 and the rules promulgated under that part. (y) (v) "Fund" means the underground storage tank cleanup fund created in section 21506b and includes the bond proceeds account established within the fund. (z) (w) "Indemnification" means indemnification of an owner or operator a claimant for a legally enforceable judgment entered against the owner or operator claimant by a third party, or a legally enforceable settlement entered between the owner or operator claimant and a third party, compensating that third party for bodily injury or property damage, or both, caused by an accidental release. as As used in this subdivision, "accidental release", "bodily injury", and "property damage" mean those terms are as defined in R 29.2163 of the Michigan Administrative Code. (aa) (x) "Location" means a parcel of property where refined petroleum underground storage tank systems are registered pursuant to in accordance with part 211. (bb) (y) "Marine terminal operator" means a person that stores refined petroleum or a refined petroleum product at a boat terminal transfer. (cc) (z) "Operator" means that term as it is defined in section 21303 or a person to whom an approved claim has been assigned or transferred. (dd) (aa) "Owner" means that term as it is defined in section 21303. (bb) "Oxygenate" means an organic compound containing oxygen and having properties as a fuel that are compatible with petroleum, including, but not limited to, ethanol, methanol, or methyl tertiary butyl ether (MTBE). Sec. 21503. As used in this part: (a) "Person" means an individual, partnership, corporation, association, governmental entity, or other legal entity. (b) "Pipeline terminal operator" means a person that receives and stores refined petroleum or a refined petroleum product in tanks and other equipment used in receiving and storing refined petroleum or a refined petroleum product from interstate and intrastate pipelines, pending wholesale bulk reshipment. (c) "Qualifying expenditures" means an expenditure for a specific activity that does not exceed the allowable payment for that activity as detailed on the schedule of costs. (c) (d) "Rack" means a mechanism for delivering refined petroleum or a refined petroleum product from a refiner, a pipeline terminal operator, or a marine terminal operator into a railroad tank car, a transport truck, a tank wagon, or the fuel supply tank of a marine vessel. (d) (e) "Refined petroleum" means aviation gasoline, middle distillates, jet fuel, kerosene, gasoline, residual oils, and any oxygenates that have been blended with any of these. Refined petroleum includes refined petroleum products and transmix. Refined petroleum does not include excluded liquids.any liquid subject to the regulatory fee. (e) (f) "Refined petroleum fund" means the refined petroleum fund established under section 21506a. (f) (g) "Refined petroleum underground storage tank" means an underground storage tank system used for the storage of refined petroleum. (g) (h) "Refiner" means a person that meets both of the following: (i) Manufactures or produces refined petroleum or a refined petroleum product at a refinery. (ii) Is a taxable fuel registrant that is a refiner for purposes of 26 CFR 48.4081-1. (h) (i) "Refinery" means a facility used by a refiner to produce refined petroleum or a refined petroleum product from crude oil, unfinished oils, natural gas liquids, or other hydrocarbons by any process involving substantially more than the blending of refined petroleum and from which refined petroleum or a refined petroleum product may be removed by pipeline or marine vessel or at a rack. (i) (j) "Regulated financial institution" means a state or nationally chartered bank, savings and loan association or savings bank, credit union, or other state or federally chartered lending institution or a regulated affiliate or regulated subsidiary of any of these entities. (j) (k) "Regulatory fee" means the environmental protection regulatory fee imposed under section 21508. (k) (l) "Release" means that term as it is defined in section 21303. (l) (m) "Removal" or "removed" means a physical transfer other than by evaporation, loss, or destruction of refined petroleum or a refined petroleum product from a refiner, pipeline terminal operator, or marine terminal operator. (m) (n) "Schedule of costs" means the list of allowable reimbursement amounts that may be paid on a claim, as established in section 21510b. (n) (o) "Site" means that term as it is defined in section 21303. (o) (p) "Supplier" means a supplier or permissive supplier licensed under the motor fuel tax act, 2000 PA 403, MCL 207.1001 to 207.1170. (p) (q) "Tank wagon" means a straight truck having 1 or more compartments other than the fuel supply tank designed or used to carry fuel. (q) (r) "Terminal" means a refined petroleum or refined petroleum products storage and distribution facility that meets all of the following requirements: (i) Is registered as a qualified terminal by the internal revenue service.Internal Revenue Service. (ii) Is supplied by a pipeline or a marine vessel. (iii) Has a rack from which refined petroleum or refined petroleum products may be removed. (s) "Transmix" means the mixed product that results from the buffer or interface of 2 different products in a pipeline shipment, or a mixture of 2 different products within a refinery or terminal that results in an off-grade mixture. (r) (t) "Transport truck" means a semitrailer combination rig designed or used for the purpose of transporting refined petroleum or a refined petroleum product over the public roads or highways. (s) (u) "Two-party exchange" means a transaction, including a book transfer, in which refined petroleum or a refined petroleum product is transferred from 1 supplier to another supplier and to which all of the following apply: (i) The transaction includes a transfer of refined petroleum or a refined petroleum product from the person that holds the original inventory position for the refined petroleum or refined petroleum product in storage tanks as reflected in the records of the refiner, pipeline terminal operator, or marine terminal operator. (ii) The exchange transaction is completed before removal across the rack by the receiving supplier. (iii) The refiner, pipeline terminal operator, or marine terminal operator in its books and records treats the receiving exchange party as the supplier that removes the refined petroleum or refined petroleum product across a rack for purposes of reporting the transaction to the department under the motor fuel tax act, 2000 PA 403, MCL 207.1001 to 207.1170. (t) (v) "Underground storage tank system" means that term as it is defined in section 21303. (u) (w) "Work invoice" means a list of goods or services for costs of corrective action related to a claim, including a statement of the amount due. Sec. 21506a. (1) The refined petroleum fund is created within the state treasury. (2) The state treasurer may receive money or other assets from any source for deposit into the refined petroleum fund. The state treasurer shall direct the investment of the refined petroleum fund . The state treasurer shall and credit to the refined petroleum fund interest and earnings from refined petroleum fund investments. (3) Money in the refined petroleum fund at the close of the fiscal year remains in the refined petroleum fund and does not lapse to the general fund. (4) Money from the refined petroleum fund shall must be expended, upon on appropriation, only for 1 or more of the following purposes: (a) Corrective actions performed by the department pursuant to in accordance with section 21320. (b) The legacy release program created in section 21519a. (c) The reasonable costs of the department in administering the refined petroleum fund and implementing part 213. (d) Not more than $5,000,000.00 annually for petroleum product inspection programs under both of the following: (i) The weights and measures act, 1964 PA 283, MCL 290.601 to 290.635. (ii) The motor fuels quality act, 1984 PA 44, MCL 290.641 to 290.650d. (e) Not more than $3,000,000.00 annually for the bureau of fire services and office of the state fire marshal, storage tank division, section, in the department of licensing and regulatory affairs. (f) Reimbursement by the authority to local units of government and county road commissions for the costs of corrective action to manage, relocate, or dispose of any media contaminated by regulated substances refined petroleum left in place within a public highway pursuant to section 21310a if all of the following occur: (i) The local unit of government or county road commission has submitted to the authority a public highway cleanup claim for reimbursement on a form created by the authority. (ii) The public highway cleanup claim for reimbursement is for reasonable and necessary eligible corrective action costs determined by the administrator pursuant to in accordance with section 21515(2) to (10).(11). (iii) The amount of reimbursement is not more than $200,000.00 per claim. (iv) An institutional control addressing impacted media within the public highway in accordance with section 21310a must be in place before initiation of corrective actions and the submission of a public highway cleanup claim. The department may determine, in writing, that an institutional control is not necessary under this subparagraph. (v) The public highway cleanup claim is for corrective actions completed after January 24, 2018. (g) Not more than $5,000,000.00 annually for the department to provide grants and loans in accordance with part 196 to facilitate brownfield redevelopment at part 213 properties. Money shall must not be provided under this subsection to fund the performance of response activities at a part 213 property to address contamination that is solely attributable to a release regulated under part 201. (h) The permanent closure of an underground storage tank system by the department if the underground storage tank system meets the conditions that require permanent closure under R 29.2153 of the Michigan Administrative Code or the department determines it is necessary to protect public health, safety, welfare, or the environment. Sec. 21506b. (1) The underground storage tank cleanup fund is created within the state treasury. The state treasurer shall establish a bond proceeds account within the fund and may establish procedures for accounting for deposits and expenditures from the bond proceeds account. (2) The state treasurer may receive money or other assets from any source for deposit into the fund. The state treasurer shall direct the investment of the fund . The state treasurer shall and credit to the fund interest and earnings from fund investments. (3) Money in the fund at the close of the fiscal year shall remain remains in the fund and shall does not lapse to the general fund. (4) The authority shall be is the administrator of the fund for auditing purposes. (5) The authority and the finance authority shall expend money from the fund, upon on appropriation, only for the following purposes: (a) As a first priority, to pay principal and interest due on bonds or notes issued by the finance authority pursuant to in accordance with this part, plus any amount necessary to maintain a fully funded debt reserve or other reserve intended to secure the principal and interest on the bonds or notes as may be required by resolution, indenture, or other agreement of the finance authority. (b) For the reasonable administrative cost of implementing this part incurred by the department, the department of treasury, the department of attorney general, and the finance authority. Administrative costs include the actual and necessary expenses incurred by the finance authority and its members in carrying out the duties imposed by this part. Total administrative costs expended under this subdivision shall must not exceed 7% 12% of the fund's projected revenues in any year. Costs incurred by the finance authority for the issuance of bonds or notes, which may also be payable from the proceeds of the bonds or notes, shall are not be considered administrative costs. (c) To pay approved claims as provided for in this part. Sec. 21510. (1) An owner or operator is eligible to receive money from the authority for corrective action or indemnification due to a confirmed release from a refined petroleum underground storage tank system only if all of the following requirements are satisfied and the owner or operator otherwise complies with this part: (a) The release from which the corrective action or indemnification arose was discovered and reported on or after December 30, 2014. (b) The refined petroleum underground storage tank from which the release occurred was, at the time of discovery of the release , and is presently, in compliance with the registration and fee requirements of part 211. The refined petroleum underground storage tank owned by a federally recognized tribe from which the release occurred was, at the time of discovery of the release, in compliance with federal registration and fee requirements. (c) The owner or operator reported the confirmed release within 24 hours after its discovery as required by part 211 and the rules promulgated under that part.of the confirmed release. (d) The owner or operator is not the United States government. (e) The claim is not for a release from a refined petroleum underground storage tank closed prior to before January 1, 1974, in compliance with the fire prevention code, 1941 PA 207, MCL 29.1 to 29.33, and the rules promulgated under that act. (f) The owner or operator was in compliance with the financial responsibility requirements of part 211 and the rules promulgated under that part at the time of the discovery of the release or releases for which the claim is filed. An underground storage tank owned by a federally recognized tribe was in compliance with federal financial responsibility requirements at the time of the discovery of the release. The financial responsibility requirements may be waived for previously unknown refined petroleum underground storage tanks with written consent from the administrator. (g) The owner or operator is otherwise eligible to receive money from the authority under this part. (h) The total amount of expenditures, including the deductible amount, does not exceed the claims limit or the claim period aggregate limit applicable to the claim.The claim is filed within 24 months after the date the confirmed release is reported. (i) The claim is not for a release discovered after a refined petroleum underground storage tank system from which the release occurred was closed or considered permanently closed in compliance with part 211 and the rules promulgated under that part. (j) The owner or operator is otherwise in compliance with this part. (k) The administrator and the board may consider substantial compliance when making eligibility determinations under this subsection. (2) The owner or operator may receive money from the authority for corrective action or indemnification due to a release that originates from an aboveground piping and dispensing portion of a refined petroleum underground storage tank system if all of the following requirements are satisfied: (a) The owner or operator is otherwise in compliance with this part and the rules promulgated under this part. (b) The release is sudden and immediate. (c) The release is of a quantity exceeding 25 gallons and is released into groundwater, surface water, or soils. (d) The owner or operator reported the release to the department within 24 hours after its discovery. (2) (3) Either the owner or the operator may receive money from the authority under this part for an occurrence, but not both. (3) (4) An owner or operator that is a public utility with more than 500,000 customers in this state is ineligible to receive money from the authority for corrective action or indemnification associated with a release from a refined petroleum underground storage tank system used to supply refined petroleum for the generation of steam electricity. (5) If an owner or operator has received money from the authority under this part for a release at a location, the owner and operator are not eligible to receive money from the authority for a subsequent release at the same location unless the owner or operator has done either or both of the following: (a) Discovered the subsequent release pursuant to corrective action being taken on a confirmed release and included this subsequent release as part of the corrective action for the confirmed release. (b) Upgraded, replaced, removed, or properly closed in place all refined petroleum underground storage tank systems at the location of the release so as to meet the requirements of part 211 and the rules promulgated under that part. (6) An owner or operator that discovers a subsequent release at the same location as an initial release pursuant to subsection (5)(a) may receive money from the authority to perform corrective action on the subsequent release, if the owner or operator otherwise complies with the requirements of this part and the rules promulgated under this part. However, the subsequent release shall be considered as part of the claim for the initial release for purposes of determining the total amount of expenditures for corrective action and indemnification under subsection (1)(h). (7) An owner or operator that discovers a subsequent release at the same location as an initial release following compliance with subsection (5)(b) may receive money from the authority to perform corrective action on the subsequent release, if there have been not more than 2 releases at the location, and if the owner or operator otherwise complies with the requirements of this part and the rules promulgated under this part. The subsequent release shall be considered a separate claim for purposes of determining the total amount of expenditures for corrective action and indemnification under subsection (1)(h). (4) An approved claim must cover corrective actions related to the release for which approval was granted. A subsequent release discovered at the location before closure of a release currently covered by the claim may receive money from the fund for corrective actions in accordance with the following: (a) A request for additional release coverage is submitted on a form created by the authority. (b) If approved by the authority, the additional release is considered part of the most recently approved claim and is subject to the most recently approved claim's deductible, claims limit, and claim period aggregate limits. (5) An owner or operator may receive an additional claim for a release at a location in accordance with the following: (a) The release covered by the most recently approved claim achieved closure. (b) A new claim form, created by the authority, is submitted and approved. (6) An additional claim described under subsection (5) is subject to the eligibility requirements of an initial claim under this section, and is subject to the deductible, claims limit, and claim period aggregate limit. (7) (8) An owner or operator that seeks to receive money from the authority for corrective action related to a release shall submit to the administrator the cleanup fund claim submittal form created by the authority containing that contains the information required by the administrator to determine compliance with this part. The administrator shall determine whether the claim complies with this part and shall notify the owner or operator. The administrator may consult with the department of licensing and regulatory affairs to make the determination required in this subsection. (8) The authority shall not approve a claim for any of the following: (a) A release that was expected or intended by an owner or operator or an employee of an owner or operator. (b) A release caused by, based on, resulting from, or attributable to the owner's or operator's intentional, knowing, willful, or deliberate noncompliance with a statute, regulation, ordinance, administrative complaint, notice of violation, notice letter, executive order, or instruction of any governmental agency or body. (c) A release arising from the ownership, maintenance, use, or entrustment to others of an aircraft, an automobile, rolling stock, or a watercraft, including loading and unloading. (d) A release arising from a consequence, whether direct or indirect, of war, invasion, act of a foreign enemy, act of terrorists, hostilities, whether war has been declared or not, civil war, rebellion, revolution, insurrection, usurpation of power, strike, riot, or civil commotion. (e) A claim is filed more than 2 calendar years after the date the confirmed release was reported. Sec. 21510a. (1) An owner or operator A claimant is responsible for a deductible amount as follows: (a) If the owner or operator claimant, or its affiliate, owns or operates fewer than 8 refined petroleum underground storage tanks located in this state, $2,000.00 per claim. (b) If the owner or operator claimant, or its affiliate, owns or operates 8 or more refined petroleum underground storage tanks located in this state, $10,000.00 per claim. (c) The deductible amount under subdivisions (a) and (b) is retroactive to all claims filed for releases discovered and reported on or after December 30, 2014. (2) The deductible amount described in subsection (1) applies to each approved claim. However, 2 or more claims arising out of the same, interrelated, associated, repeated, or continuous releases or a series of related releases shall be considered a single claim and are subject to 1 deductible amount. Any claim that takes place over 2 or more claim periods is subject to 1 deductible amount. (3) An owner or operator A claimant that submits a work invoice under section 21515 is responsible for the deductible amount described in subsection (1). The expenses toward meeting the deductible amount shall must be documented and shall comply with the following: (a) Expenses for items listed in the schedule of costs shall must be at or below the allowable reimbursement amount listed in the schedule of costs. (b) Expenses for items that are not listed in the schedule of costs shall must be reasonable and necessary considering conditions at the site based upon on a competitive bidding process established by the authority or as otherwise determined necessary by the authority. Sec. 21510d. If an owner or operator intends to rely on the fund to meet financial responsibility requirements, the owner or operator shall submit to the authority a request for a determination that the owner or operator would be eligible for funding under this part in the event of a release from a refined petroleum underground storage tank system. Upon On receipt of a request under this subsection, the authority shall make a determination and provide written notice of that determination , in writing, to the owner or operator. The notice may contain conditions for maintenance of that eligibility. A determination under this section is based upon on a demonstration of all of the following: (a) The owner or operator is not ineligible for funding under section 21510(4) and (5).21510. (b) The refined petroleum underground storage tank or tanks are presently in compliance with the registration and fee requirements of part 211. The refined petroleum underground storage tank owned by a federally recognized tribe is under federal jurisdiction and is presently in compliance with federal financial responsibility requirements. (c) The owner or operator is not the United States government. (d) The owner or operator has financial responsibility for the deductible amount. In order to demonstrate that the owner or operator has financial responsibility for the deductible amount under this section and section 21510(1)(f), the owner or operator may rely upon any on a financial assurance mechanism listed in 40 CFR 280.95 to 280.107 or either of the following: (i) A financial test of self-insurance. To pass the financial test of self-insurance, the owner or operator must submit, on a form developed by the authority, financial information certified as accurate by the chief financial officer, or an individual in a comparable position, that demonstrates a tangible net worth of at least 3 times the deductible amount required under this part. (ii) A deposit account in the amount of the deductible amount required under this part in a financial institution, as that term is defined in section 1202 of the banking code of 1999, 1999 PA 276, MCL 487.11202, if access to the deposit account is restricted by a deposit account control agreement or similar restriction as approved by the authority that requires the approval of the administrator for a withdrawal from the deposit account. Sec. 21515. (1) To receive money from the authority for corrective action, an owner or operator a claimant that has received receives notice from the administrator that its claim has been approved pursuant to in accordance with section 21510(8) 21510 shall follow the procedures outlined in this section and shall submit work invoices to the administrator containing that contain the information required by the administrator relevant to determining compliance with this part. (2) Within 45 60 days of after receipt of work invoices submitted pursuant to in accordance with subsection (1) using forms created by the authority, the administrator shall make all of the following determinations: (a) Whether the owner or operator claimant is eligible to receive funding under this part. (b) Whether the work performed or proposed to be performed is consistent with part 213, and whether those activities are consistent with achieving site closure. (c) Whether the owner or operator claimant has paid the deductible amount. (d) Whether the corrective action performed is reasonable and necessary considering conditions at the site of the release. (e) Whether the cost of performing the corrective action work is at or below the allowable reimbursement amount in the schedule of costs. or, if If the corrective action work is not a an item listed item, whether the cost is in the schedule of costs, the corrective action work must be reasonable and necessary , and whether the cost was considering conditions at the site, based upon on a competitive bidding process established by the authority, or otherwise determined to be reasonable and necessary by the authority. (3) The administrator may consult with the department and the department of licensing and regulatory affairs to make the determination required in subsection (2). (4) If the administrator determines under subsection (2) that the work invoice is reasonable and necessary considering conditions at the site of the release and reasonable in terms of cost and the owner or operator claimant is eligible for funding under this part, the administrator shall approve the work invoice and notify the owner or operator claimant that submitted the work invoice of the approval. If the administrator determines that the work described on the work invoices submitted was not reasonable and necessary or the cost of the work is not reasonable, or that the owner or operator claimant is not eligible for funding under this part, the administrator shall deny the work invoice or any portion of the work invoice submitted and give notice of the denial to the owner or operator claimant that submitted the work invoice. (5) The owner or operator may submit work invoices to the administrator that are related to a claim only after initial approval of the claim under section 21510(8) 21510 and if the aggregate amount of work invoices in the submission is $5,000.00 or more, or 120 days or more have passed since the most recent work invoice was submitted. This limitation does not apply to the final work invoice submission related to the approved claim. A work invoice must be submitted within 365 days after the completion of the services for which reimbursement is being requested and must not be submitted within 14 days after the most recent work invoice was submitted. (6) If the administrator determines that a work invoice does not meet the requirements of subsection (2) or (5), the administrator shall deny reimbursement for the work invoice and give written notice of the denial to the owner or operator who claimant that submitted the work invoice. (7) The administrator shall approve a reimbursement for a work invoice that was submitted by an owner or operator a claimant for corrective action taken if the work invoice meets the requirements of this part for an approved claim and an approved work invoice. (8) Except as provided in subsection (9) and section 21519, the authority shall make a joint payment to the owner or operator claimant and the contractor that performed the work listed in the approved work invoices within 45 days after the date of the administrator's approval under subsection (4) if sufficient money exists in the fund. Once payment has been made under this section, the authority is not liable for any claim on the basis of that payment. (9) The authority may withhold partial payment of money on payment vouchers if there is reasonable cause to suspect that there are violations of section 21548 or if necessary to assure ensure acceptable completion of the proposed work. (10) The authority shall prepare and make available to owners and operators a claimant standardized claim and work invoice forms. (11) The authority shall not approve reimbursement for costs related to any of the following: (a) Costs arising from corrective actions that are not related to the release for which the claim was approved. (b) Punitive, exemplary, or multiplied damages, fines, taxes, penalties, assessments, punitive or statutory assessments, or any civil, administrative, or criminal fines, sanctions, or penalties. (c) Legal or civil claims made by a claimant against another owner or operator of the refined petroleum underground storage tank system. (d) Costs, charges, or expenses incurred by the claimant for goods supplied by the claimant or services performed by the staff or employees of the claimant, or its parent, subsidiary, or affiliate, unless the costs, charges, or expenses are incurred with the prior written approval of the authority. (e) Costs arising from the testing, repair, reconstruction, or upgrading of a refined petroleum underground storage tank system, or any other improvements and site enhancements or routine maintenance on, within, or under a location. (f) Costs arising from removing, replacing, or recycling a refined petroleum underground storage tank system, including removal and disposal of tank contents, removal and replacement of pavement over the underground storage tank system footprint, or backfilling and compacting void space left by the removal of an underground storage tank system. (g) Costs incurred more than 1 calendar day before the reporting of the confirmed release for which a claim is approved. (h) Costs related to the injury of an employee of the claimant or its affiliate arising from and in the course of employment or while performing duties related to the conduct of the business of the claimant or its affiliate by a spouse, child, parent, brother, or sister of that employee. This subdivision applies whether the claimant may be liable as an employer or in any other capacity and to any obligation to share damages with or repay someone else that must pay damages because of the injury. (i) Any obligation of the claimant under worker's compensation, unemployment compensation, or disability benefits law or a similar law. (j) Any liability or claim for liability of others assumed by the claimant under a contract or agreement, unless the claimant would have been liable in the absence of the contract or agreement. (k) Costs that have been or will be submitted to or that have been paid in accordance with a third-party agreement or an insurance policy. (l) Costs arising from corrective actions that are not necessary to obtain a restricted closure based on the land use at the time and location the release was discovered. A restricted closure can be achieved utilizing 1 or more institutional controls, including, but not limited to, restrictive covenants, an environmental license agreement with the department of transportation, public highway as an alternative mechanism, or an ordinance or state law or rule. Reimbursement of corrective actions conducted in place of an institutional control may be considered eligible if any of the following conditions are met and approved in writing by the administrator before the corrective actions take place: (i) The corrective action will eliminate the need for installation and long-term operation, maintenance, and monitoring of mitigation measures that would otherwise be necessary to prevent unacceptable exposures. (ii) The corrective action will result in closure of the release in a more expeditious manner and will provide a higher level of confidence that closure of the release will remain protective. (iii) The corrective action is necessary to achieve closure of off-site impact to properties that are not owned, operated, or controlled by the claimant or the claimant's affiliate that is liable under part 213. (m) Costs incurred after the closure date of the release for which the claim was filed, except for costs for monitoring well abandonment, remediation system decommissioning, or related to requirements recorded in an approved restrictive covenant or institutional control, performed within 1 year after the closure date. The administrator may grant an exception to the costs described under this subdivision. (n) Litigation costs. (o) Any form of interest, late payment penalties, or carrying charges. (p) Shipping or postage charges related to the delivery of soil, liquid, or vapor samples. (q) Administrative costs, such as bookkeeping or form preparation, including, but not limited to, eligibility requests, claims, invoices, proposals, and change orders, and purchase orders between claimant and consultant or claimant and contractor. (r) Environmental liability insurance premiums. (s) Replacement or repair of pavement, landscaping, fences, utilities, or structures; property upgrades; or raze and rebuild activities, unless directly associated with eligible and necessary corrective actions. (t) Costs incurred due to lost income, property loss, or reduced property values unless part of an indemnification request approved under section 21518. (u) Fines or penalties imposed by local, state, or federal government agencies. (v) Punitive or exemplary damages. (w) Costs related to the excavation, transport, and disposal of more than 1,500 tons of soil without prior written authorization from the administrator. (x) Laboratory rates for rapid turnaround sample analysis that exceed the maximum allowable rates on the schedule of costs, unless preapproved by the administrator. (y) Charges for equipment not used on the date of the charge. (z) Costs incurred if a non-low bidder performs required competitively bid services, unless preapproved by the administrator. (aa) Corrective action activities, labor, laboratory testing, drilling, or other work that exceeds actual costs as demonstrated by submitted invoices. (bb) Potentially refundable costs to the claimant, including, but not limited to, permit inspection fees and cash bonds, until the cost is actually incurred. (cc) Consultant markup of items listed on the schedule of costs, not including subcontractor invoices and schedule-of-cost items included on a subcontractor invoice. Sec. 21516. (1) An owner or operator A claimant with a claim approved pursuant to in accordance with section 21510 for which corrective action is in progress who that sells or transfers to another person the property that is the subject of the approved claim to another person may assign or transfer the approved claim to that the other person. The person to whom the assignment or transfer is made is eligible to receive money from the authority. as an owner or operator for the release which is the subject of the approved claim. Allowable, outstanding approved or paid work invoices of the owner or operator making claimant that make the assignment or transfer may be counted toward the deductible amount of the person to whom the assignment or transfer is made. The person to whom the assignment or transfer is made has a claim limit equal to the balance of the claim limit initially assigned to the claimant that made the assignment or transfer, and the claim period aggregate limit includes only reimbursements made to the person to whom the assignment or transfer is made. (2) An owner or operator assigning or transferring an approved claim pursuant to this section shall notify the administrator of the proposed assignment or transfer at least 10 days before the effective date of the assignment or transfer.A claim that has reached its claim limit or the original claim period aggregate limit may not be transferred under this section. Sec. 21518. (1) To receive money from the authority for indemnification, the owner or operator claimant shall submit to the administrator a request for indemnification containing that contains the information required by the administrator, including a all of the following: (a) A copy of the judgment obtained by a third party from a court of law against the owner or operator claimant or the settlement entered into between the owner or operator claimant and the third party, all as applicable. (b) All documentation supporting that supports the reasonableness of and justification for the judgment or settlement. , and work (c) Work invoices which conform to the requirements of this part. (2) If the administrator determines that the owner or operator claimant is eligible for funding under this part, is eligible for the amount requested, has paid the deductible amount, and has not exceeded the allowable amount of expenditure provided in section 21510(1)(i), 21502, and that the work invoices are payable under this part, the administrator shall forward a copy of the request for indemnification along with all supporting documentation to the attorney general. The attorney general shall approve the request for indemnification if there is a legally enforceable judgment against, or settlement with, the owner or operator claimant that was caused by an accidental release and that is reasonable and consistent with the purposes of this part. The attorney general may raise as a defense to the request any rights or defenses that were or are available to the owner or operator claimant and, in the case of a judgment, that were not heard and ruled upon on by the court. If a request for indemnification is approved by the attorney general, the authority shall pay the indemnification amount. (3) (2) The administrator shall keep records of all approved requests for indemnification. (4) (3) The authority shall make a payment to an owner or operator a claimant for an approved indemnification request within 30 days if sufficient money is available to make the payment. Sec. 21519. (1) The authority shall make payments on claims work invoices in the order in which they are received. However, if there is insufficient money available to make payments on all approved claims, the authority shall give notice to each owner claimant that is eligible to submit a claim work invoice under this part advising the owners claimant of the financial situation and the authority shall prioritize payments based upon on the risks at the site to the public health, safety, or welfare or the environment. Payments on claims that are not funded shall must be paid if revenues subsequently become available. (2) The authority and the this state are not liable for the reimbursement of work invoices or requests for indemnification if revenues of the authority are insufficient to meet these claims. Sec. 21519a. (1) The department shall establish and the authority shall administer a legacy release program as provided in this section to reimburse eligible persons for costs of corrective actions for certain historic releases from refined petroleum underground storage tank systems. An eligible person may be reimbursed for corrective action costs incurred if the eligible person demonstrates all of the following: (a) The release from which the corrective action or indemnification arose was discovered and reported prior to before December 30, 2014. (b) The release upon on which the request for reimbursement is based has not been closed pursuant to in accordance with part 213 prior to before December 30, 2014. (c) Any refined petroleum underground storage tank systems that are operating at the location from which the release occurred are currently in compliance with the registration requirements of part 211. (c) (d) The request for reimbursement does not include reimbursement for money that was reimbursed from any other source, including insurance policies. (d) (e) A claim submitted to the legacy release program shall must not be approved by the authority for any of the prohibitions listed under section 21510c.21510(8). (e) (f) The request for reimbursement is for corrective action performed on or after December 30, 2014. (2) An eligible person that seeks to be reimbursed under the legacy release program established under this section shall submit to the authority a request for reimbursement on a form provided by the authority containing and provide the documentation required by the authority. (3) The authority shall approve a request for reimbursement under this section only as follows: (a) The amount approved for reimbursement shall be is 50% of the aggregate indemnification and corrective action costs incurred, but not more than 50% of the reasonable and necessary eligible costs as determined by the administrator pursuant to in accordance with section 21515(2) to (10).(11). (b) The total amount approved for reimbursement shall does not exceed a total of $50,000.00 for all releases from refined petroleum underground storage tank systems at a single location. (c) An owner or operator may request a review of a denied claim or work invoice per in accordance with section 21521. (4) To be considered for reimbursement, work invoices must be submitted to the administrator within 180 days after the effective date of the amendatory act that amended this subsection. (5) (4) As used in this section, "eligible person" means the owner or operator of a refined petroleum underground storage tank system at the time of the reporting of the release. Sec. 21521. (1) If the administrator denies a claim, work invoice, request for indemnification, or request for an eligibility determination, under section 21510(8), the owner or operator, who or claimant, that submitted the claim, work invoice, request for indemnification, or request for an eligibility determination under section 21510(8) may, within 14 business days following the denial, request review by the board. However, if the administrator believes the dispute may be able to be resolved without the board's review, the administrator may contact the owner or operator, or claimant, regarding the issues in dispute and may negotiate a resolution of the dispute prior to before the board's review. The board shall conduct a review of the denial to determine whether the claim, work invoice, or request for indemnification is payable under this part. (2) A person who that is denied approval by the board after review under subsection (1) may appeal the decision directly to the circuit court. Sec. 21524. (1) The authority shall be governed by a board of directors consisting of the director of the department and 6 residents of the this state, appointed by the governor with the advice and consent of the senate, as follows: (a) An individual representing petroleum refiners. (b) An individual representing independent petroleum marketers. (c) An individual from a statewide motor fuel retail association. (d) An individual from a statewide business association that includes owners or operators of refined petroleum underground storage tanks.representing qualified underground storage tank consultants with considerable experience in the remediation of leaking underground storage tank systems. (e) An individual from a statewide environmental organization. (f) A member of the general public. (2) The 6 appointed members of the board of directors shall serve terms of 3 years. However, in making the initial appointments, the governor shall designate 2 appointed members to serve for 3 years, 2 appointed members to serve for 2 years, and 2 appointed members to serve for 1 year. (3) Upon On appointment to the board of directors under subsection (1), and upon on the taking and filing of the constitutional oath of office, a member of the board of directors shall enter office and exercise the duties of the office to which he or she the member is appointed. (4) A vacancy on the board of directors shall must be filled in the same manner as the original appointment. A vacancy shall must be filled for the balance of the unexpired term. A member of the board of directors shall hold office until a successor is appointed and qualified. (5) Members of the board of directors and officers and employees of the authority are subject to 1968 PA 317, MCL 15.321 to 15.330, and 1968 PA 318, MCL 15.301 to 15.310, as applicable. A member of the board of directors or an officer, employee, or agent of the authority shall discharge the duties of his or her the position in a nonpartisan manner, with good faith, and with the degree of diligence, care, and skill that an ordinarily prudent person would exercise under similar circumstances in a like position. In discharging his or her duties, a member of the board of directors or an officer, employee, or agent of the authority, when acting in good faith, may rely upon on any of the following: (a) The opinion of counsel for the authority. (b) The report of an independent appraiser selected with reasonable care by the board of directors. (c) Financial statements of the authority represented to the member of the board of directors, officer, employee, or agent to be correct by the officer of authority having charge of its books or account, or stated in a written report by the auditor general or a certified public accountant or the firm of the accountant to fairly reflect the financial condition of the authority. (6) The board of directors shall organize and make its own policies and procedures. The board of directors shall conduct all business at public meetings held in compliance with the open meetings act, 1976 PA 267, MCL 15.261 to 15.275. Public notice of the time, date, and place of each meeting shall must be given in the manner required by the open meetings act, 1976 PA 267, MCL 15.261 to 15.275. Four members of the board of directors constitute a quorum for the transaction of business. An action of the board of directors shall must be by a majority of the votes cast. The director of the department may designate a representative from his or her the department to serve as a voting member of the board of directors for 1 or more meetings. (7) The board of directors shall elect a chairperson from among its members and may elect any other officers the board of directors considers appropriate. Sec. 21548. (1) A person who that makes or submits or causes to be made or submitted either directly or indirectly any a statement, report, affidavit, application, claim, bid, work invoice, or other request for payment or indemnification under this part knowing that knows that the statement, report, application, claim, bid, work invoice, or other request for payment or indemnification is false or misleading, is guilty of a felony punishable by imprisonment for not more than 5 years or a fine of not more than $50,000.00, or both. In addition to any a penalty imposed under this subsection, a person convicted under this subsection shall pay restitution to the authority for the amount received in violation of this subsection. (2) A person who that makes or submits or causes to be made or submitted either directly or indirectly any a statement, report, application, claim, bid, work invoice, or other request for payment or indemnification under this part knowing that knows that the statement, report, affidavit, application, claim, bid, work invoice, or other request for payment or indemnification is false, misleading, or fraudulent, or who that commits a fraudulent practice, is subject to a civil fine of not more than $50,000.00 or twice the amount submitted, whichever is greater. In addition to any a civil fine imposed under this subsection, a person found responsible under this subsection shall pay restitution to the authority for the amount received in violation of this subsection. The legislature intends that this subsection be given retroactive application. (3) As used in subsection (2), "fraudulent" or "fraudulent practice" includes, but is not limited to, the following: (a) Submitting a work invoice for the excavation, hauling, disposal, or provision of soil, sand, or backfill for an amount greater than the legal capacity of the carrying vehicle or greater than was actually carried, excavated, disposed, or provided. (b) Submitting paperwork for services or work provided that was not in fact provided or that was not directly provided by the individual indicated on the paperwork. (c) Contaminating an otherwise clean resource or site with contaminated soil or product from a contaminated resource or site. (d) Returning any load of contaminated soil to its original site for reasons other than remediation of the soil. (e) Causing damage intentionally or as the result of gross negligence to a refined petroleum underground storage tank system, which damage results in a release at a site. (f) Placing a refined petroleum underground storage tank system at a contaminated site where no refined petroleum underground storage tank system previously existed for purposes of disguising the source of contamination or to obtain funding under this part. (g) Submitting a work invoice for the excavation of soil from a site that was removed for reasons other than removal of the refined petroleum underground storage tank system or remediation. (h) Any intentional act or act of gross negligence that causes or allows contamination to spread at a site. (i) Registration of a nonexistent refined petroleum underground storage tank system with the department. (j) Loaning to an owner or operator a claimant the deductible amount and then submitting or causing to be submitted inflated claims or invoices designed to recoup the deductible amount. (k) Confirming a release without simultaneously providing notice to the owner or operator. (l) Inflating bills or work invoices, or both, by adding charges for work that was not performed. (m) Submitting a false or misleading laboratory report. (n) Submitting bills or work invoices, or both, for sampling, testing, monitoring, or excavation that are not justified by the site condition. (o) Falsely characterizing the contents of a refined petroleum underground storage tank system for purposes of obtaining funding under this part. (p) Submitting or causing to be submitted bills or work invoices by or from a person who that did not directly provide the service. (q) Characterizing legal services as consulting services for purposes of obtaining funding under this part. (r) Misrepresenting or concealing the identity, credentials, affiliation, or qualifications of principals or persons seeking, either directly or indirectly, funding or approval for participation under this part. (s) Falsifying a signature on a claim application or a work invoice. (t) Failing to accurately disclose the actual amount and carrier of unencumbered insurance coverage available for new environmental impairment or professional liability claims. (u) Any other act or omission of a false, fraudulent, or misleading nature undertaken in order to obtain funding under this part. (4) The attorney general or county prosecutor may conduct an investigation of an alleged violation of this section and bring an action for a violation of this section. (5) If the attorney general or county prosecutor has reasonable cause to believe that a person has information or is in possession, custody, or control of any document or records, however stored or embodied, or tangible object which is relevant to an investigation of a violation or attempted violation of this part or a crime or attempted crime against the fund, the attorney general or county prosecutor may, before bringing any action, make an ex parte request to a magistrate for issuance of a subpoena requiring that person to appear and be examined under oath or to produce the document, records, or object for inspection and copying, or both. Service may be accomplished by any means described in the Michigan court rules. Requests made by the attorney general may be brought in Ingham county. (6) If a person objects to or otherwise fails to comply with a subpoena served under subsection (5), an action may be brought in district court to enforce the demand. Actions filed by the attorney general may be brought in Ingham county. (7) The attorney general or county prosecutor may apply to the district court for an order granting immunity to any person who that refuses to provide or objects to providing information, documents, records, or objects sought pursuant to under this section. If the judge is satisfied that it is in the interest of justice that immunity be granted, he or she the judge shall enter an order granting immunity to the person and requiring the person to appear and be examined under oath or to produce the document, records, or object for inspection and copying, or both. (8) A person who that fails to comply with a subpoena issued pursuant to under subsection (5) or a requirement to appear and be examined pursuant to under subsection (7) is subject to a civil fine of not more than $25,000.00 for each day of continued noncompliance. (9) In addition to any civil fines or criminal penalties imposed under this part or the criminal laws of this state, the person found responsible shall repay any money obtained directly or indirectly under this part. Money owed pursuant to under this section constitutes a claim and lien by the authority upon any real or personal property owned either directly or indirectly by the person. This lien shall attach attaches regardless of whether the person is insolvent and may not be extinguished or avoided by bankruptcy. The lien imposed by this section has the force and effect of a first in time and right judgment lien. (10) Subsection (1) does not preclude prosecutions under other laws of the this state including, but not limited to, section 157a, 218, 248, 249, 280, or 422 of the Michigan penal code, 1931 PA 328, MCL 750.157a, 750.218, 750.248, 750.249, 750.280, and 750.422. (11) All civil fines collected pursuant to under this section shall must be apportioned in the following manner: (a) Fifty percent shall must be deposited in the general fund and shall be used by the department to fund fraud investigations under this part. (b) Twenty-five percent shall must be paid to the office of the county prosecutor or attorney general, whichever office brought the action. (c) Twenty-five percent shall must be paid to a local police department or sheriff's office, or a city or county health department, if investigation by that office or department led to the bringing of the action. If more than 1 office or department is eligible for payment under this subsection, division of payment shall must be on an equal basis. If there is not a local office or department that is entitled to payment under this subdivision, the money shall must be forwarded to the state treasurer for deposit into the refined petroleum fund. Enacting section 1. Section 21510c of the natural resources and environmental protection act, 1994 PA 451, MCL 324.21510c, is repealed.
HOUSE BILL NO. 6023
A bill to amend 1994 PA 451, entitled
"Natural resources and environmental protection act,"
by amending sections 21502, 21503, 21506a, 21506b, 21510, 21510a, 21510d, 21515, 21516, 21518, 21519, 21519a, 21521, 21524, and 21548 (MCL 324.21502, 324.21503, 324.21506a, 324.21506b, 324.21510, 324.21510a, 324.21510d, 324.21515, 324.21516, 324.21518, 324.21519, 324.21519a, 324.21521, 324.21524, and 324.21548), sections 21502, 21503, 21510, 21510a, 21515, 21516, and 21521 as amended by 2016 PA 380, sections 21506a and 21510d as amended and section 21519a as added by 2017 PA 134, and section 21506b as added and sections 21518, 21519, 21524, and 21548 as amended by 2014 PA 416; and to repeal acts and parts of acts.
the people of the state of michigan enact:
Sec. 21502. As used in this part:
(a) "Administrator" means the administrator of the authority as provided for in section 21525.
(b) "Affiliate" means a person that directly, or indirectly through 1 or more intermediaries, controls the person specified.
(c) "Approved claim" means a claim that is approved pursuant to under section 21510.
(d) "Authority" means the underground storage tank authority created in section 21523.
(e) "Board of directors" or "board" means the board of directors of the authority.
(f) "Bond proceeds account" means the account within the fund to which proceeds of bonds or notes issued under this part have been credited.
(g) "Bonds or notes" means the bonds, notes, commercial paper, other obligations of indebtedness, or any combination of these, issued by the finance authority pursuant to in accordance with this part.
(h) "Bulk transfer" means a transfer of refined petroleum or a refined petroleum product from, or purchase for resale by, a refiner, pipeline terminal operator, supplier, or marine terminal operator to or from another refiner, pipeline terminal operator, supplier, or marine terminal operator through pipeline tender or marine delivery, including pipeline movements of refined petroleum or a refined petroleum product from 1 or more marine vessel movements of refined petroleum or a refined petroleum product. Refined petroleum or a refined petroleum product in a refinery, pipeline, terminal, or marine vessel transporting refined petroleum or a refined petroleum product to a refinery or terminal is in the bulk transfer terminal system. Notwithstanding anything to the contrary in this subdivision, refined petroleum or a refined petroleum product transferred or purchased for resale by a refiner, pipeline terminal operator, supplier, or marine terminal operator must be delivered to or otherwise remain within the bulk transfer terminal system prior to before removal across the rack in order to constitute a bulk transfer.
(i) "Bulk transfer terminal system" means the refined petroleum or refined petroleum product distribution system consisting of refineries, pipelines, marine vessels, and terminals and includes refined petroleum or refined petroleum product storage tanks and refined petroleum or refined petroleum product storage facilities that are part of a refinery, boat terminal transfer, or terminal owned, operated, or controlled by a refiner, marine terminal operator, or pipeline terminal operator.
(j) "Claim" means the submission by the owner or operator or his the owner's or her operator's representative of documentation on an application requesting payment by the authority. A claim shall must include, at a minimum, a completed and signed claim form and the name, address, and telephone number of the owner or operator.
(k) "Claimant" means a person to whom an approved claim is assigned or transferred.
(l) (k) "Claims "Claim limit" means $1,000,000.00 per release. Two or more claims arising out of the same, interrelated, associated, repeated, or continuous releases or a series of related releases shall be subject to 1 claims limit. Any claim that takes place over 2 or more claim periods shall be subject to 1 claims limit.minus the appropriate deductible amount.
(m) (l) "Claim period" means a 1-year period commencing on beginning October 1 of each year and ending on September 30 the following year.
(n) (m) "Claim period aggregate limit" means the following aggregate claims limit for all releases discovered during a claim period:
(i) For owners, operators, and affiliates of 1 to 100 refined petroleum underground storage tanks located in this state, $1,000,000.00.
(ii) For owners, operators, and affiliates of more than 100 refined petroleum underground storage tanks located in this state, $2,000,000.00.
(o) "Closure" means department approval of a closure report for a release covered by an approved claim in accordance with section 21315. Closure includes approval of a closure report with conditions after the conditions are met.
(p) "Confirmed release" means a release of refined petroleum that is reported to the department of licensing and regulatory affairs on a form created by the department of licensing and regulatory affairs and designated on the form as a confirmed release.
(q) (n) "Controls" means the possession or the contingent or noncontingent right to acquire possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities or interests, by contract, other than a commercial contract for goods or nonmanagement services, by pledge of securities, or otherwise, unless the power is the result of an official position with or corporate office held by the person.
(r) (o) "Corrective action" means that term as it is defined in section 21302.
(s) (p) "Deductible amount" means the amount of corrective action costs or indemnification costs that are required to be paid by an owner or operator a claimant as provided in section 21510a.
(t) (q) "Department" means the department of environmental quality.environment, Great Lakes, and energy.
(u) (r) "Eligible person" means an owner or operator who meets the eligibility requirements under this part to submit a claim.
(s) "Excluded liquid" means that term as defined in 26 CFR 48.4081-1.
(v) "Federally recognized tribe" means a Native American tribal entity that is recognized as having a government-to-government relationship with the United States, that has the responsibilities, powers, limitations, and obligations attached to that designation, and that is eligible for funding and services from the federal government.
(w) (t) "Finance authority" means the Michigan finance authority created by Executive Reorganization Order No. 2010-2, MCL 12.194.
(x) (u) "Financial responsibility requirements" means the financial responsibility for taking corrective action and for compensating third parties for bodily injury and property damage caused by a release from a refined petroleum underground storage tank system that the owner or operator of a refined petroleum underground storage tank system must demonstrate under part 211 and the rules promulgated under that part.
(y) (v) "Fund" means the underground storage tank cleanup fund created in section 21506b and includes the bond proceeds account established within the fund.
(z) (w) "Indemnification" means indemnification of an owner or operator a claimant for a legally enforceable judgment entered against the owner or operator claimant by a third party, or a legally enforceable settlement entered between the owner or operator claimant and a third party, compensating that third party for bodily injury or property damage, or both, caused by an accidental release. as As used in this subdivision, "accidental release", "bodily injury", and "property damage" mean those terms are as defined in R 29.2163 of the Michigan Administrative Code.
(aa) (x) "Location" means a parcel of property where refined petroleum underground storage tank systems are registered pursuant to in accordance with part 211.
(bb) (y) "Marine terminal operator" means a person that stores refined petroleum or a refined petroleum product at a boat terminal transfer.
(cc) (z) "Operator" means that term as it is defined in section 21303 or a person to whom an approved claim has been assigned or transferred.
(dd) (aa) "Owner" means that term as it is defined in section 21303.
(bb) "Oxygenate" means an organic compound containing oxygen and having properties as a fuel that are compatible with petroleum, including, but not limited to, ethanol, methanol, or methyl tertiary butyl ether (MTBE).
Sec. 21503. As used in this part:
(a) "Person" means an individual, partnership, corporation, association, governmental entity, or other legal entity.
(b) "Pipeline terminal operator" means a person that receives and stores refined petroleum or a refined petroleum product in tanks and other equipment used in receiving and storing refined petroleum or a refined petroleum product from interstate and intrastate pipelines, pending wholesale bulk reshipment.
(c) "Qualifying expenditures" means an expenditure for a specific activity that does not exceed the allowable payment for that activity as detailed on the schedule of costs.
(c) (d) "Rack" means a mechanism for delivering refined petroleum or a refined petroleum product from a refiner, a pipeline terminal operator, or a marine terminal operator into a railroad tank car, a transport truck, a tank wagon, or the fuel supply tank of a marine vessel.
(d) (e) "Refined petroleum" means aviation gasoline, middle distillates, jet fuel, kerosene, gasoline, residual oils, and any oxygenates that have been blended with any of these. Refined petroleum includes refined petroleum products and transmix. Refined petroleum does not include excluded liquids.any liquid subject to the regulatory fee.
(e) (f) "Refined petroleum fund" means the refined petroleum fund established under section 21506a.
(f) (g) "Refined petroleum underground storage tank" means an underground storage tank system used for the storage of refined petroleum.
(g) (h) "Refiner" means a person that meets both of the following:
(i) Manufactures or produces refined petroleum or a refined petroleum product at a refinery.
(ii) Is a taxable fuel registrant that is a refiner for purposes of 26 CFR 48.4081-1.
(h) (i) "Refinery" means a facility used by a refiner to produce refined petroleum or a refined petroleum product from crude oil, unfinished oils, natural gas liquids, or other hydrocarbons by any process involving substantially more than the blending of refined petroleum and from which refined petroleum or a refined petroleum product may be removed by pipeline or marine vessel or at a rack.
(i) (j) "Regulated financial institution" means a state or nationally chartered bank, savings and loan association or savings bank, credit union, or other state or federally chartered lending institution or a regulated affiliate or regulated subsidiary of any of these entities.
(j) (k) "Regulatory fee" means the environmental protection regulatory fee imposed under section 21508.
(k) (l) "Release" means that term as it is defined in section 21303.
(l) (m) "Removal" or "removed" means a physical transfer other than by evaporation, loss, or destruction of refined petroleum or a refined petroleum product from a refiner, pipeline terminal operator, or marine terminal operator.
(m) (n) "Schedule of costs" means the list of allowable reimbursement amounts that may be paid on a claim, as established in section 21510b.
(n) (o) "Site" means that term as it is defined in section 21303.
(o) (p) "Supplier" means a supplier or permissive supplier licensed under the motor fuel tax act, 2000 PA 403, MCL 207.1001 to 207.1170.
(p) (q) "Tank wagon" means a straight truck having 1 or more compartments other than the fuel supply tank designed or used to carry fuel.
(q) (r) "Terminal" means a refined petroleum or refined petroleum products storage and distribution facility that meets all of the following requirements:
(i) Is registered as a qualified terminal by the internal revenue service.Internal Revenue Service.
(ii) Is supplied by a pipeline or a marine vessel.
(iii) Has a rack from which refined petroleum or refined petroleum products may be removed.
(s) "Transmix" means the mixed product that results from the buffer or interface of 2 different products in a pipeline shipment, or a mixture of 2 different products within a refinery or terminal that results in an off-grade mixture.
(r) (t) "Transport truck" means a semitrailer combination rig designed or used for the purpose of transporting refined petroleum or a refined petroleum product over the public roads or highways.
(s) (u) "Two-party exchange" means a transaction, including a book transfer, in which refined petroleum or a refined petroleum product is transferred from 1 supplier to another supplier and to which all of the following apply:
(i) The transaction includes a transfer of refined petroleum or a refined petroleum product from the person that holds the original inventory position for the refined petroleum or refined petroleum product in storage tanks as reflected in the records of the refiner, pipeline terminal operator, or marine terminal operator.
(ii) The exchange transaction is completed before removal across the rack by the receiving supplier.
(iii) The refiner, pipeline terminal operator, or marine terminal operator in its books and records treats the receiving exchange party as the supplier that removes the refined petroleum or refined petroleum product across a rack for purposes of reporting the transaction to the department under the motor fuel tax act, 2000 PA 403, MCL 207.1001 to 207.1170.
(t) (v) "Underground storage tank system" means that term as it is defined in section 21303.
(u) (w) "Work invoice" means a list of goods or services for costs of corrective action related to a claim, including a statement of the amount due.
Sec. 21506a. (1) The refined petroleum fund is created within the state treasury.
(2) The state treasurer may receive money or other assets from any source for deposit into the refined petroleum fund. The state treasurer shall direct the investment of the refined petroleum fund . The state treasurer shall and credit to the refined petroleum fund interest and earnings from refined petroleum fund investments.
(3) Money in the refined petroleum fund at the close of the fiscal year remains in the refined petroleum fund and does not lapse to the general fund.
(4) Money from the refined petroleum fund shall must be expended, upon on appropriation, only for 1 or more of the following purposes:
(a) Corrective actions performed by the department pursuant to in accordance with section 21320.
(b) The legacy release program created in section 21519a.
(c) The reasonable costs of the department in administering the refined petroleum fund and implementing part 213.
(d) Not more than $5,000,000.00 annually for petroleum product inspection programs under both of the following:
(i) The weights and measures act, 1964 PA 283, MCL 290.601 to 290.635.
(ii) The motor fuels quality act, 1984 PA 44, MCL 290.641 to 290.650d.
(e) Not more than $3,000,000.00 annually for the bureau of fire services and office of the state fire marshal, storage tank division, section, in the department of licensing and regulatory affairs.
(f) Reimbursement by the authority to local units of government and county road commissions for the costs of corrective action to manage, relocate, or dispose of any media contaminated by regulated substances refined petroleum left in place within a public highway pursuant to section 21310a if all of the following occur:
(i) The local unit of government or county road commission has submitted to the authority a public highway cleanup claim for reimbursement on a form created by the authority.
(ii) The public highway cleanup claim for reimbursement is for reasonable and necessary eligible corrective action costs determined by the administrator pursuant to in accordance with section 21515(2) to (10).(11).
(iii) The amount of reimbursement is not more than $200,000.00 per claim.
(iv) An institutional control addressing impacted media within the public highway in accordance with section 21310a must be in place before initiation of corrective actions and the submission of a public highway cleanup claim. The department may determine, in writing, that an institutional control is not necessary under this subparagraph.
(v) The public highway cleanup claim is for corrective actions completed after January 24, 2018.
(g) Not more than $5,000,000.00 annually for the department to provide grants and loans in accordance with part 196 to facilitate brownfield redevelopment at part 213 properties. Money shall must not be provided under this subsection to fund the performance of response activities at a part 213 property to address contamination that is solely attributable to a release regulated under part 201.
(h) The permanent closure of an underground storage tank system by the department if the underground storage tank system meets the conditions that require permanent closure under R 29.2153 of the Michigan Administrative Code or the department determines it is necessary to protect public health, safety, welfare, or the environment.
Sec. 21506b. (1) The underground storage tank cleanup fund is created within the state treasury. The state treasurer shall establish a bond proceeds account within the fund and may establish procedures for accounting for deposits and expenditures from the bond proceeds account.
(2) The state treasurer may receive money or other assets from any source for deposit into the fund. The state treasurer shall direct the investment of the fund . The state treasurer shall and credit to the fund interest and earnings from fund investments.
(3) Money in the fund at the close of the fiscal year shall remain remains in the fund and shall does not lapse to the general fund.
(4) The authority shall be is the administrator of the fund for auditing purposes.
(5) The authority and the finance authority shall expend money from the fund, upon on appropriation, only for the following purposes:
(a) As a first priority, to pay principal and interest due on bonds or notes issued by the finance authority pursuant to in accordance with this part, plus any amount necessary to maintain a fully funded debt reserve or other reserve intended to secure the principal and interest on the bonds or notes as may be required by resolution, indenture, or other agreement of the finance authority.
(b) For the reasonable administrative cost of implementing this part incurred by the department, the department of treasury, the department of attorney general, and the finance authority. Administrative costs include the actual and necessary expenses incurred by the finance authority and its members in carrying out the duties imposed by this part. Total administrative costs expended under this subdivision shall must not exceed 7% 12% of the fund's projected revenues in any year. Costs incurred by the finance authority for the issuance of bonds or notes, which may also be payable from the proceeds of the bonds or notes, shall are not be considered administrative costs.
(c) To pay approved claims as provided for in this part.
Sec. 21510. (1) An owner or operator is eligible to receive money from the authority for corrective action or indemnification due to a confirmed release from a refined petroleum underground storage tank system only if all of the following requirements are satisfied and the owner or operator otherwise complies with this part:
(a) The release from which the corrective action or indemnification arose was discovered and reported on or after December 30, 2014.
(b) The refined petroleum underground storage tank from which the release occurred was, at the time of discovery of the release , and is presently, in compliance with the registration and fee requirements of part 211. The refined petroleum underground storage tank owned by a federally recognized tribe from which the release occurred was, at the time of discovery of the release, in compliance with federal registration and fee requirements.
(c) The owner or operator reported the confirmed release within 24 hours after its discovery as required by part 211 and the rules promulgated under that part.of the confirmed release.
(d) The owner or operator is not the United States government.
(e) The claim is not for a release from a refined petroleum underground storage tank closed prior to before January 1, 1974, in compliance with the fire prevention code, 1941 PA 207, MCL 29.1 to 29.33, and the rules promulgated under that act.
(f) The owner or operator was in compliance with the financial responsibility requirements of part 211 and the rules promulgated under that part at the time of the discovery of the release or releases for which the claim is filed. An underground storage tank owned by a federally recognized tribe was in compliance with federal financial responsibility requirements at the time of the discovery of the release. The financial responsibility requirements may be waived for previously unknown refined petroleum underground storage tanks with written consent from the administrator.
(g) The owner or operator is otherwise eligible to receive money from the authority under this part.
(h) The total amount of expenditures, including the deductible amount, does not exceed the claims limit or the claim period aggregate limit applicable to the claim.The claim is filed within 24 months after the date the confirmed release is reported.
(i) The claim is not for a release discovered after a refined petroleum underground storage tank system from which the release occurred was closed or considered permanently closed in compliance with part 211 and the rules promulgated under that part.
(j) The owner or operator is otherwise in compliance with this part.
(k) The administrator and the board may consider substantial compliance when making eligibility determinations under this subsection.
(2) The owner or operator may receive money from the authority for corrective action or indemnification due to a release that originates from an aboveground piping and dispensing portion of a refined petroleum underground storage tank system if all of the following requirements are satisfied:
(a) The owner or operator is otherwise in compliance with this part and the rules promulgated under this part.
(b) The release is sudden and immediate.
(c) The release is of a quantity exceeding 25 gallons and is released into groundwater, surface water, or soils.
(d) The owner or operator reported the release to the department within 24 hours after its discovery.
(2) (3) Either the owner or the operator may receive money from the authority under this part for an occurrence, but not both.
(3) (4) An owner or operator that is a public utility with more than 500,000 customers in this state is ineligible to receive money from the authority for corrective action or indemnification associated with a release from a refined petroleum underground storage tank system used to supply refined petroleum for the generation of steam electricity.
(5) If an owner or operator has received money from the authority under this part for a release at a location, the owner and operator are not eligible to receive money from the authority for a subsequent release at the same location unless the owner or operator has done either or both of the following:
(a) Discovered the subsequent release pursuant to corrective action being taken on a confirmed release and included this subsequent release as part of the corrective action for the confirmed release.
(b) Upgraded, replaced, removed, or properly closed in place all refined petroleum underground storage tank systems at the location of the release so as to meet the requirements of part 211 and the rules promulgated under that part.
(6) An owner or operator that discovers a subsequent release at the same location as an initial release pursuant to subsection (5)(a) may receive money from the authority to perform corrective action on the subsequent release, if the owner or operator otherwise complies with the requirements of this part and the rules promulgated under this part. However, the subsequent release shall be considered as part of the claim for the initial release for purposes of determining the total amount of expenditures for corrective action and indemnification under subsection (1)(h).
(7) An owner or operator that discovers a subsequent release at the same location as an initial release following compliance with subsection (5)(b) may receive money from the authority to perform corrective action on the subsequent release, if there have been not more than 2 releases at the location, and if the owner or operator otherwise complies with the requirements of this part and the rules promulgated under this part. The subsequent release shall be considered a separate claim for purposes of determining the total amount of expenditures for corrective action and indemnification under subsection (1)(h).
(4) An approved claim must cover corrective actions related to the release for which approval was granted. A subsequent release discovered at the location before closure of a release currently covered by the claim may receive money from the fund for corrective actions in accordance with the following:
(a) A request for additional release coverage is submitted on a form created by the authority.
(b) If approved by the authority, the additional release is considered part of the most recently approved claim and is subject to the most recently approved claim's deductible, claims limit, and claim period aggregate limits.
(5) An owner or operator may receive an additional claim for a release at a location in accordance with the following:
(a) The release covered by the most recently approved claim achieved closure.
(b) A new claim form, created by the authority, is submitted and approved.
(6) An additional claim described under subsection (5) is subject to the eligibility requirements of an initial claim under this section, and is subject to the deductible, claims limit, and claim period aggregate limit.
(7) (8) An owner or operator that seeks to receive money from the authority for corrective action related to a release shall submit to the administrator the cleanup fund claim submittal form created by the authority containing that contains the information required by the administrator to determine compliance with this part. The administrator shall determine whether the claim complies with this part and shall notify the owner or operator. The administrator may consult with the department of licensing and regulatory affairs to make the determination required in this subsection.
(8) The authority shall not approve a claim for any of the following:
(a) A release that was expected or intended by an owner or operator or an employee of an owner or operator.
(b) A release caused by, based on, resulting from, or attributable to the owner's or operator's intentional, knowing, willful, or deliberate noncompliance with a statute, regulation, ordinance, administrative complaint, notice of violation, notice letter, executive order, or instruction of any governmental agency or body.
(c) A release arising from the ownership, maintenance, use, or entrustment to others of an aircraft, an automobile, rolling stock, or a watercraft, including loading and unloading.
(d) A release arising from a consequence, whether direct or indirect, of war, invasion, act of a foreign enemy, act of terrorists, hostilities, whether war has been declared or not, civil war, rebellion, revolution, insurrection, usurpation of power, strike, riot, or civil commotion.
(e) A claim is filed more than 2 calendar years after the date the confirmed release was reported.
Sec. 21510a. (1) An owner or operator A claimant is responsible for a deductible amount as follows:
(a) If the owner or operator claimant, or its affiliate, owns or operates fewer than 8 refined petroleum underground storage tanks located in this state, $2,000.00 per claim.
(b) If the owner or operator claimant, or its affiliate, owns or operates 8 or more refined petroleum underground storage tanks located in this state, $10,000.00 per claim.
(c) The deductible amount under subdivisions (a) and (b) is retroactive to all claims filed for releases discovered and reported on or after December 30, 2014.
(2) The deductible amount described in subsection (1) applies to each approved claim. However, 2 or more claims arising out of the same, interrelated, associated, repeated, or continuous releases or a series of related releases shall be considered a single claim and are subject to 1 deductible amount. Any claim that takes place over 2 or more claim periods is subject to 1 deductible amount.
(3) An owner or operator A claimant that submits a work invoice under section 21515 is responsible for the deductible amount described in subsection (1). The expenses toward meeting the deductible amount shall must be documented and shall comply with the following:
(a) Expenses for items listed in the schedule of costs shall must be at or below the allowable reimbursement amount listed in the schedule of costs.
(b) Expenses for items that are not listed in the schedule of costs shall must be reasonable and necessary considering conditions at the site based upon on a competitive bidding process established by the authority or as otherwise determined necessary by the authority.
Sec. 21510d. If an owner or operator intends to rely on the fund to meet financial responsibility requirements, the owner or operator shall submit to the authority a request for a determination that the owner or operator would be eligible for funding under this part in the event of a release from a refined petroleum underground storage tank system. Upon On receipt of a request under this subsection, the authority shall make a determination and provide written notice of that determination , in writing, to the owner or operator. The notice may contain conditions for maintenance of that eligibility. A determination under this section is based upon on a demonstration of all of the following:
(a) The owner or operator is not ineligible for funding under section 21510(4) and (5).21510.
(b) The refined petroleum underground storage tank or tanks are presently in compliance with the registration and fee requirements of part 211. The refined petroleum underground storage tank owned by a federally recognized tribe is under federal jurisdiction and is presently in compliance with federal financial responsibility requirements.
(c) The owner or operator is not the United States government.
(d) The owner or operator has financial responsibility for the deductible amount. In order to demonstrate that the owner or operator has financial responsibility for the deductible amount under this section and section 21510(1)(f), the owner or operator may rely upon any on a financial assurance mechanism listed in 40 CFR 280.95 to 280.107 or either of the following:
(i) A financial test of self-insurance. To pass the financial test of self-insurance, the owner or operator must submit, on a form developed by the authority, financial information certified as accurate by the chief financial officer, or an individual in a comparable position, that demonstrates a tangible net worth of at least 3 times the deductible amount required under this part.
(ii) A deposit account in the amount of the deductible amount required under this part in a financial institution, as that term is defined in section 1202 of the banking code of 1999, 1999 PA 276, MCL 487.11202, if access to the deposit account is restricted by a deposit account control agreement or similar restriction as approved by the authority that requires the approval of the administrator for a withdrawal from the deposit account.
Sec. 21515. (1) To receive money from the authority for corrective action, an owner or operator a claimant that has received receives notice from the administrator that its claim has been approved pursuant to in accordance with section 21510(8) 21510 shall follow the procedures outlined in this section and shall submit work invoices to the administrator containing that contain the information required by the administrator relevant to determining compliance with this part.
(2) Within 45 60 days of after receipt of work invoices submitted pursuant to in accordance with subsection (1) using forms created by the authority, the administrator shall make all of the following determinations:
(a) Whether the owner or operator claimant is eligible to receive funding under this part.
(b) Whether the work performed or proposed to be performed is consistent with part 213, and whether those activities are consistent with achieving site closure.
(c) Whether the owner or operator claimant has paid the deductible amount.
(d) Whether the corrective action performed is reasonable and necessary considering conditions at the site of the release.
(e) Whether the cost of performing the corrective action work is at or below the allowable reimbursement amount in the schedule of costs. or, if If the corrective action work is not a an item listed item, whether the cost is in the schedule of costs, the corrective action work must be reasonable and necessary , and whether the cost was considering conditions at the site, based upon on a competitive bidding process established by the authority, or otherwise determined to be reasonable and necessary by the authority.
(3) The administrator may consult with the department and the department of licensing and regulatory affairs to make the determination required in subsection (2).
(4) If the administrator determines under subsection (2) that the work invoice is reasonable and necessary considering conditions at the site of the release and reasonable in terms of cost and the owner or operator claimant is eligible for funding under this part, the administrator shall approve the work invoice and notify the owner or operator claimant that submitted the work invoice of the approval. If the administrator determines that the work described on the work invoices submitted was not reasonable and necessary or the cost of the work is not reasonable, or that the owner or operator claimant is not eligible for funding under this part, the administrator shall deny the work invoice or any portion of the work invoice submitted and give notice of the denial to the owner or operator claimant that submitted the work invoice.
(5) The owner or operator may submit work invoices to the administrator that are related to a claim only after initial approval of the claim under section 21510(8) 21510 and if the aggregate amount of work invoices in the submission is $5,000.00 or more, or 120 days or more have passed since the most recent work invoice was submitted. This limitation does not apply to the final work invoice submission related to the approved claim. A work invoice must be submitted within 365 days after the completion of the services for which reimbursement is being requested and must not be submitted within 14 days after the most recent work invoice was submitted.
(6) If the administrator determines that a work invoice does not meet the requirements of subsection (2) or (5), the administrator shall deny reimbursement for the work invoice and give written notice of the denial to the owner or operator who claimant that submitted the work invoice.
(7) The administrator shall approve a reimbursement for a work invoice that was submitted by an owner or operator a claimant for corrective action taken if the work invoice meets the requirements of this part for an approved claim and an approved work invoice.
(8) Except as provided in subsection (9) and section 21519, the authority shall make a joint payment to the owner or operator claimant and the contractor that performed the work listed in the approved work invoices within 45 days after the date of the administrator's approval under subsection (4) if sufficient money exists in the fund. Once payment has been made under this section, the authority is not liable for any claim on the basis of that payment.
(9) The authority may withhold partial payment of money on payment vouchers if there is reasonable cause to suspect that there are violations of section 21548 or if necessary to assure ensure acceptable completion of the proposed work.
(10) The authority shall prepare and make available to owners and operators a claimant standardized claim and work invoice forms.
(11) The authority shall not approve reimbursement for costs related to any of the following:
(a) Costs arising from corrective actions that are not related to the release for which the claim was approved.
(b) Punitive, exemplary, or multiplied damages, fines, taxes, penalties, assessments, punitive or statutory assessments, or any civil, administrative, or criminal fines, sanctions, or penalties.
(c) Legal or civil claims made by a claimant against another owner or operator of the refined petroleum underground storage tank system.
(d) Costs, charges, or expenses incurred by the claimant for goods supplied by the claimant or services performed by the staff or employees of the claimant, or its parent, subsidiary, or affiliate, unless the costs, charges, or expenses are incurred with the prior written approval of the authority.
(e) Costs arising from the testing, repair, reconstruction, or upgrading of a refined petroleum underground storage tank system, or any other improvements and site enhancements or routine maintenance on, within, or under a location.
(f) Costs arising from removing, replacing, or recycling a refined petroleum underground storage tank system, including removal and disposal of tank contents, removal and replacement of pavement over the underground storage tank system footprint, or backfilling and compacting void space left by the removal of an underground storage tank system.
(g) Costs incurred more than 1 calendar day before the reporting of the confirmed release for which a claim is approved.
(h) Costs related to the injury of an employee of the claimant or its affiliate arising from and in the course of employment or while performing duties related to the conduct of the business of the claimant or its affiliate by a spouse, child, parent, brother, or sister of that employee. This subdivision applies whether the claimant may be liable as an employer or in any other capacity and to any obligation to share damages with or repay someone else that must pay damages because of the injury.
(i) Any obligation of the claimant under worker's compensation, unemployment compensation, or disability benefits law or a similar law.
(j) Any liability or claim for liability of others assumed by the claimant under a contract or agreement, unless the claimant would have been liable in the absence of the contract or agreement.
(k) Costs that have been or will be submitted to or that have been paid in accordance with a third-party agreement or an insurance policy.
(l) Costs arising from corrective actions that are not necessary to obtain a restricted closure based on the land use at the time and location the release was discovered. A restricted closure can be achieved utilizing 1 or more institutional controls, including, but not limited to, restrictive covenants, an environmental license agreement with the department of transportation, public highway as an alternative mechanism, or an ordinance or state law or rule. Reimbursement of corrective actions conducted in place of an institutional control may be considered eligible if any of the following conditions are met and approved in writing by the administrator before the corrective actions take place:
(i) The corrective action will eliminate the need for installation and long-term operation, maintenance, and monitoring of mitigation measures that would otherwise be necessary to prevent unacceptable exposures.
(ii) The corrective action will result in closure of the release in a more expeditious manner and will provide a higher level of confidence that closure of the release will remain protective.
(iii) The corrective action is necessary to achieve closure of off-site impact to properties that are not owned, operated, or controlled by the claimant or the claimant's affiliate that is liable under part 213.
(m) Costs incurred after the closure date of the release for which the claim was filed, except for costs for monitoring well abandonment, remediation system decommissioning, or related to requirements recorded in an approved restrictive covenant or institutional control, performed within 1 year after the closure date. The administrator may grant an exception to the costs described under this subdivision.
(n) Litigation costs.
(o) Any form of interest, late payment penalties, or carrying charges.
(p) Shipping or postage charges related to the delivery of soil, liquid, or vapor samples.
(q) Administrative costs, such as bookkeeping or form preparation, including, but not limited to, eligibility requests, claims, invoices, proposals, and change orders, and purchase orders between claimant and consultant or claimant and contractor.
(r) Environmental liability insurance premiums.
(s) Replacement or repair of pavement, landscaping, fences, utilities, or structures; property upgrades; or raze and rebuild activities, unless directly associated with eligible and necessary corrective actions.
(t) Costs incurred due to lost income, property loss, or reduced property values unless part of an indemnification request approved under section 21518.
(u) Fines or penalties imposed by local, state, or federal government agencies.
(v) Punitive or exemplary damages.
(w) Costs related to the excavation, transport, and disposal of more than 1,500 tons of soil without prior written authorization from the administrator.
(x) Laboratory rates for rapid turnaround sample analysis that exceed the maximum allowable rates on the schedule of costs, unless preapproved by the administrator.
(y) Charges for equipment not used on the date of the charge.
(z) Costs incurred if a non-low bidder performs required competitively bid services, unless preapproved by the administrator.
(aa) Corrective action activities, labor, laboratory testing, drilling, or other work that exceeds actual costs as demonstrated by submitted invoices.
(bb) Potentially refundable costs to the claimant, including, but not limited to, permit inspection fees and cash bonds, until the cost is actually incurred.
(cc) Consultant markup of items listed on the schedule of costs, not including subcontractor invoices and schedule-of-cost items included on a subcontractor invoice.
Sec. 21516. (1) An owner or operator A claimant with a claim approved pursuant to in accordance with section 21510 for which corrective action is in progress who that sells or transfers to another person the property that is the subject of the approved claim to another person may assign or transfer the approved claim to that the other person. The person to whom the assignment or transfer is made is eligible to receive money from the authority. as an owner or operator for the release which is the subject of the approved claim. Allowable, outstanding approved or paid work invoices of the owner or operator making claimant that make the assignment or transfer may be counted toward the deductible amount of the person to whom the assignment or transfer is made. The person to whom the assignment or transfer is made has a claim limit equal to the balance of the claim limit initially assigned to the claimant that made the assignment or transfer, and the claim period aggregate limit includes only reimbursements made to the person to whom the assignment or transfer is made.
(2) An owner or operator assigning or transferring an approved claim pursuant to this section shall notify the administrator of the proposed assignment or transfer at least 10 days before the effective date of the assignment or transfer.A claim that has reached its claim limit or the original claim period aggregate limit may not be transferred under this section.
Sec. 21518. (1) To receive money from the authority for indemnification, the owner or operator claimant shall submit to the administrator a request for indemnification containing that contains the information required by the administrator, including a all of the following:
(a) A copy of the judgment obtained by a third party from a court of law against the owner or operator claimant or the settlement entered into between the owner or operator claimant and the third party, all as applicable.
(b) All documentation supporting that supports the reasonableness of and justification for the judgment or settlement. , and work
(c) Work invoices which conform to the requirements of this part.
(2) If the administrator determines that the owner or operator claimant is eligible for funding under this part, is eligible for the amount requested, has paid the deductible amount, and has not exceeded the allowable amount of expenditure provided in section 21510(1)(i), 21502, and that the work invoices are payable under this part, the administrator shall forward a copy of the request for indemnification along with all supporting documentation to the attorney general. The attorney general shall approve the request for indemnification if there is a legally enforceable judgment against, or settlement with, the owner or operator claimant that was caused by an accidental release and that is reasonable and consistent with the purposes of this part. The attorney general may raise as a defense to the request any rights or defenses that were or are available to the owner or operator claimant and, in the case of a judgment, that were not heard and ruled upon on by the court. If a request for indemnification is approved by the attorney general, the authority shall pay the indemnification amount.
(3) (2) The administrator shall keep records of all approved requests for indemnification.
(4) (3) The authority shall make a payment to an owner or operator a claimant for an approved indemnification request within 30 days if sufficient money is available to make the payment.
Sec. 21519. (1) The authority shall make payments on claims work invoices in the order in which they are received. However, if there is insufficient money available to make payments on all approved claims, the authority shall give notice to each owner claimant that is eligible to submit a claim work invoice under this part advising the owners claimant of the financial situation and the authority shall prioritize payments based upon on the risks at the site to the public health, safety, or welfare or the environment. Payments on claims that are not funded shall must be paid if revenues subsequently become available.
(2) The authority and the this state are not liable for the reimbursement of work invoices or requests for indemnification if revenues of the authority are insufficient to meet these claims.
Sec. 21519a. (1) The department shall establish and the authority shall administer a legacy release program as provided in this section to reimburse eligible persons for costs of corrective actions for certain historic releases from refined petroleum underground storage tank systems. An eligible person may be reimbursed for corrective action costs incurred if the eligible person demonstrates all of the following:
(a) The release from which the corrective action or indemnification arose was discovered and reported prior to before December 30, 2014.
(b) The release upon on which the request for reimbursement is based has not been closed pursuant to in accordance with part 213 prior to before December 30, 2014.
(c) Any refined petroleum underground storage tank systems that are operating at the location from which the release occurred are currently in compliance with the registration requirements of part 211.
(c) (d) The request for reimbursement does not include reimbursement for money that was reimbursed from any other source, including insurance policies.
(d) (e) A claim submitted to the legacy release program shall must not be approved by the authority for any of the prohibitions listed under section 21510c.21510(8).
(e) (f) The request for reimbursement is for corrective action performed on or after December 30, 2014.
(2) An eligible person that seeks to be reimbursed under the legacy release program established under this section shall submit to the authority a request for reimbursement on a form provided by the authority containing and provide the documentation required by the authority.
(3) The authority shall approve a request for reimbursement under this section only as follows:
(a) The amount approved for reimbursement shall be is 50% of the aggregate indemnification and corrective action costs incurred, but not more than 50% of the reasonable and necessary eligible costs as determined by the administrator pursuant to in accordance with section 21515(2) to (10).(11).
(b) The total amount approved for reimbursement shall does not exceed a total of $50,000.00 for all releases from refined petroleum underground storage tank systems at a single location.
(c) An owner or operator may request a review of a denied claim or work invoice per in accordance with section 21521.
(4) To be considered for reimbursement, work invoices must be submitted to the administrator within 180 days after the effective date of the amendatory act that amended this subsection.
(5) (4) As used in this section, "eligible person" means the owner or operator of a refined petroleum underground storage tank system at the time of the reporting of the release.
Sec. 21521. (1) If the administrator denies a claim, work invoice, request for indemnification, or request for an eligibility determination, under section 21510(8), the owner or operator, who or claimant, that submitted the claim, work invoice, request for indemnification, or request for an eligibility determination under section 21510(8) may, within 14 business days following the denial, request review by the board. However, if the administrator believes the dispute may be able to be resolved without the board's review, the administrator may contact the owner or operator, or claimant, regarding the issues in dispute and may negotiate a resolution of the dispute prior to before the board's review. The board shall conduct a review of the denial to determine whether the claim, work invoice, or request for indemnification is payable under this part.
(2) A person who that is denied approval by the board after review under subsection (1) may appeal the decision directly to the circuit court.
Sec. 21524. (1) The authority shall be governed by a board of directors consisting of the director of the department and 6 residents of the this state, appointed by the governor with the advice and consent of the senate, as follows:
(a) An individual representing petroleum refiners.
(b) An individual representing independent petroleum marketers.
(c) An individual from a statewide motor fuel retail association.
(d) An individual from a statewide business association that includes owners or operators of refined petroleum underground storage tanks.representing qualified underground storage tank consultants with considerable experience in the remediation of leaking underground storage tank systems.
(e) An individual from a statewide environmental organization.
(f) A member of the general public.
(2) The 6 appointed members of the board of directors shall serve terms of 3 years. However, in making the initial appointments, the governor shall designate 2 appointed members to serve for 3 years, 2 appointed members to serve for 2 years, and 2 appointed members to serve for 1 year.
(3) Upon On appointment to the board of directors under subsection (1), and upon on the taking and filing of the constitutional oath of office, a member of the board of directors shall enter office and exercise the duties of the office to which he or she the member is appointed.
(4) A vacancy on the board of directors shall must be filled in the same manner as the original appointment. A vacancy shall must be filled for the balance of the unexpired term. A member of the board of directors shall hold office until a successor is appointed and qualified.
(5) Members of the board of directors and officers and employees of the authority are subject to 1968 PA 317, MCL 15.321 to 15.330, and 1968 PA 318, MCL 15.301 to 15.310, as applicable. A member of the board of directors or an officer, employee, or agent of the authority shall discharge the duties of his or her the position in a nonpartisan manner, with good faith, and with the degree of diligence, care, and skill that an ordinarily prudent person would exercise under similar circumstances in a like position. In discharging his or her duties, a member of the board of directors or an officer, employee, or agent of the authority, when acting in good faith, may rely upon on any of the following:
(a) The opinion of counsel for the authority.
(b) The report of an independent appraiser selected with reasonable care by the board of directors.
(c) Financial statements of the authority represented to the member of the board of directors, officer, employee, or agent to be correct by the officer of authority having charge of its books or account, or stated in a written report by the auditor general or a certified public accountant or the firm of the accountant to fairly reflect the financial condition of the authority.
(6) The board of directors shall organize and make its own policies and procedures. The board of directors shall conduct all business at public meetings held in compliance with the open meetings act, 1976 PA 267, MCL 15.261 to 15.275. Public notice of the time, date, and place of each meeting shall must be given in the manner required by the open meetings act, 1976 PA 267, MCL 15.261 to 15.275. Four members of the board of directors constitute a quorum for the transaction of business. An action of the board of directors shall must be by a majority of the votes cast. The director of the department may designate a representative from his or her the department to serve as a voting member of the board of directors for 1 or more meetings.
(7) The board of directors shall elect a chairperson from among its members and may elect any other officers the board of directors considers appropriate.
Sec. 21548. (1) A person who that makes or submits or causes to be made or submitted either directly or indirectly any a statement, report, affidavit, application, claim, bid, work invoice, or other request for payment or indemnification under this part knowing that knows that the statement, report, application, claim, bid, work invoice, or other request for payment or indemnification is false or misleading, is guilty of a felony punishable by imprisonment for not more than 5 years or a fine of not more than $50,000.00, or both. In addition to any a penalty imposed under this subsection, a person convicted under this subsection shall pay restitution to the authority for the amount received in violation of this subsection.
(2) A person who that makes or submits or causes to be made or submitted either directly or indirectly any a statement, report, application, claim, bid, work invoice, or other request for payment or indemnification under this part knowing that knows that the statement, report, affidavit, application, claim, bid, work invoice, or other request for payment or indemnification is false, misleading, or fraudulent, or who that commits a fraudulent practice, is subject to a civil fine of not more than $50,000.00 or twice the amount submitted, whichever is greater. In addition to any a civil fine imposed under this subsection, a person found responsible under this subsection shall pay restitution to the authority for the amount received in violation of this subsection. The legislature intends that this subsection be given retroactive application.
(3) As used in subsection (2), "fraudulent" or "fraudulent practice" includes, but is not limited to, the following:
(a) Submitting a work invoice for the excavation, hauling, disposal, or provision of soil, sand, or backfill for an amount greater than the legal capacity of the carrying vehicle or greater than was actually carried, excavated, disposed, or provided.
(b) Submitting paperwork for services or work provided that was not in fact provided or that was not directly provided by the individual indicated on the paperwork.
(c) Contaminating an otherwise clean resource or site with contaminated soil or product from a contaminated resource or site.
(d) Returning any load of contaminated soil to its original site for reasons other than remediation of the soil.
(e) Causing damage intentionally or as the result of gross negligence to a refined petroleum underground storage tank system, which damage results in a release at a site.
(f) Placing a refined petroleum underground storage tank system at a contaminated site where no refined petroleum underground storage tank system previously existed for purposes of disguising the source of contamination or to obtain funding under this part.
(g) Submitting a work invoice for the excavation of soil from a site that was removed for reasons other than removal of the refined petroleum underground storage tank system or remediation.
(h) Any intentional act or act of gross negligence that causes or allows contamination to spread at a site.
(i) Registration of a nonexistent refined petroleum underground storage tank system with the department.
(j) Loaning to an owner or operator a claimant the deductible amount and then submitting or causing to be submitted inflated claims or invoices designed to recoup the deductible amount.
(k) Confirming a release without simultaneously providing notice to the owner or operator.
(l) Inflating bills or work invoices, or both, by adding charges for work that was not performed.
(m) Submitting a false or misleading laboratory report.
(n) Submitting bills or work invoices, or both, for sampling, testing, monitoring, or excavation that are not justified by the site condition.
(o) Falsely characterizing the contents of a refined petroleum underground storage tank system for purposes of obtaining funding under this part.
(p) Submitting or causing to be submitted bills or work invoices by or from a person who that did not directly provide the service.
(q) Characterizing legal services as consulting services for purposes of obtaining funding under this part.
(r) Misrepresenting or concealing the identity, credentials, affiliation, or qualifications of principals or persons seeking, either directly or indirectly, funding or approval for participation under this part.
(s) Falsifying a signature on a claim application or a work invoice.
(t) Failing to accurately disclose the actual amount and carrier of unencumbered insurance coverage available for new environmental impairment or professional liability claims.
(u) Any other act or omission of a false, fraudulent, or misleading nature undertaken in order to obtain funding under this part.
(4) The attorney general or county prosecutor may conduct an investigation of an alleged violation of this section and bring an action for a violation of this section.
(5) If the attorney general or county prosecutor has reasonable cause to believe that a person has information or is in possession, custody, or control of any document or records, however stored or embodied, or tangible object which is relevant to an investigation of a violation or attempted violation of this part or a crime or attempted crime against the fund, the attorney general or county prosecutor may, before bringing any action, make an ex parte request to a magistrate for issuance of a subpoena requiring that person to appear and be examined under oath or to produce the document, records, or object for inspection and copying, or both. Service may be accomplished by any means described in the Michigan court rules. Requests made by the attorney general may be brought in Ingham county.
(6) If a person objects to or otherwise fails to comply with a subpoena served under subsection (5), an action may be brought in district court to enforce the demand. Actions filed by the attorney general may be brought in Ingham county.
(7) The attorney general or county prosecutor may apply to the district court for an order granting immunity to any person who that refuses to provide or objects to providing information, documents, records, or objects sought pursuant to under this section. If the judge is satisfied that it is in the interest of justice that immunity be granted, he or she the judge shall enter an order granting immunity to the person and requiring the person to appear and be examined under oath or to produce the document, records, or object for inspection and copying, or both.
(8) A person who that fails to comply with a subpoena issued pursuant to under subsection (5) or a requirement to appear and be examined pursuant to under subsection (7) is subject to a civil fine of not more than $25,000.00 for each day of continued noncompliance.
(9) In addition to any civil fines or criminal penalties imposed under this part or the criminal laws of this state, the person found responsible shall repay any money obtained directly or indirectly under this part. Money owed pursuant to under this section constitutes a claim and lien by the authority upon any real or personal property owned either directly or indirectly by the person. This lien shall attach attaches regardless of whether the person is insolvent and may not be extinguished or avoided by bankruptcy. The lien imposed by this section has the force and effect of a first in time and right judgment lien.
(10) Subsection (1) does not preclude prosecutions under other laws of the this state including, but not limited to, section 157a, 218, 248, 249, 280, or 422 of the Michigan penal code, 1931 PA 328, MCL 750.157a, 750.218, 750.248, 750.249, 750.280, and 750.422.
(11) All civil fines collected pursuant to under this section shall must be apportioned in the following manner:
(a) Fifty percent shall must be deposited in the general fund and shall be used by the department to fund fraud investigations under this part.
(b) Twenty-five percent shall must be paid to the office of the county prosecutor or attorney general, whichever office brought the action.
(c) Twenty-five percent shall must be paid to a local police department or sheriff's office, or a city or county health department, if investigation by that office or department led to the bringing of the action. If more than 1 office or department is eligible for payment under this subsection, division of payment shall must be on an equal basis. If there is not a local office or department that is entitled to payment under this subdivision, the money shall must be forwarded to the state treasurer for deposit into the refined petroleum fund.
Enacting section 1. Section 21510c of the natural resources and environmental protection act, 1994 PA 451, MCL 324.21510c, is repealed.