SB 0189

This bill establishes a gasoline remediation and elimination of ethers fund and a fee on the importation into this state of gasoline ethers and gasoline containing ethers.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Oil Discharge and Disposal Cleanup Fund; Purpose. Amend RSA 146-D:1 to read as follows:

146-D:1 Purpose. The general court finds that gasoline and diesel fuel, due to their extreme fluidity and suspected carcinogenic qualities, comprise a sufficiently distinct class of property which represents a potential serious health and safety problem to the citizens of New Hampshire. In particular, gasoline and diesel fuel present a potential threat to the quality of New Hampshire's groundwater and environment because of the speed with which these products are able to flow into, and contaminate, valuable groundwater supplies. The purpose of this chapter is to establish financial responsibility for the cleanup of oil discharge and disposal, and to establish a fund to be used in addressing the costs incurred by the owners of underground storage facilities and bulk storage facilities for the cleanup of oil discharge and disposal, to protect groundwater, and for reimbursement for third party damages. An additional purpose is to provide a funding source for cleanup and reimbursement for discharges of gasoline ethers pursuant to RSA 146-G. The fund established under this chapter shall be in addition to the oil pollution control fund established pursuant to RSA 146-A:11-a, and the gasoline remediation and elimination of ethers fund established under RSA 146-G.

2 New Paragraphs; Definitions. Amend RSA 146-D:2 by inserting after paragraph VII the following new paragraphs:

VIII. "Gasoline" means all products commonly or commercially known or sold as gasoline, including casinghead and absorption of natural gasoline, regardless of their classification or uses, and any liquid prepared, advertised, offered for sale, or sold for use as or commonly and commercially used as a fuel in internal combustion engines, which when subjected to distillation in accordance with the standard method of test for distillation of gasoline, naphtha, kerosene, and similar petroleum products (ASTM Designation D-86) show not less than 10 percent distilled (recovered) below 347 degrees Fahrenheit (175 degrees Centigrade) and not less than 95 percent distilled (recovered) below 464 degrees Fahrenheit (240 degrees Centigrade); provided that the term gasoline shall not include commercial solvents or naphthas which distill by ASTM method D-86 not more than 9 percent at 176 degrees Fahrenheit and which have a distillation range of 150 degrees Fahrenheit or less, or liquefied gases which would not exist as liquid at a temperature of 60 degrees Fahrenheit and a pressure of 14.7 pounds per square inch absolute.

IX. "Diesel fuel" means a liquid hydrocarbon fuel used in internal combustion high speed engines that operate with a diesel thermodynamic cycle.

3 Fund Established. RSA 146-D:3, VI is repealed and reenacted to read as follows:

VI. The fee collected on motor fuels shall be deposited in the oil discharge and disposal cleanup fund, except as provided in subparagraph (b), and divided as follows:

(a) For each gallon of diesel fuel for which a fee is assessed, $.014 shall be placed in an account for reimbursement of owners of eligible underground storage facilities and $.001 shall be placed in an account to be used for reimbursement of owners of eligible bulk storage facilities.

(b) For each gallon of gasoline for which a fee is assessed, $0.0115 shall be placed in the underground storage facilities account, $0.001 shall be placed in the bulk storage facilities account and $0.0025 shall be placed in the gasoline remediation and elimination of ethers fund established under RSA 146-G.

(c) For all fees assessed on gasoline during the period from January 1, 2001 to July 1, 2001 and deposited in the account for reimbursement of owners of eligible underground storage facilities, 18 percent of those fees shall be transferred to gasoline remediation and elimination of ethers fund established under RSA 146-G.

4 New Chapter; Gasoline Remediation and Elimination of Ethers Fund. Amend RSA by inserting after chapter 146-F the following new chapter:

I. In recognition of its fiduciary responsibility to minimize the contamination of our citizens' drinking water and the water sources of the state, the general court finds that ethers contained in gasoline, due to their extreme fluidity, recalcitrance to natural degradation, low taste and odor thresholds, and probable carcinogenic qualities, comprise a sufficiently distinct class of property which represent a particular, present, and rapidly escalating threat to the quality of all the water of the state and, thereby, to our citizens. The general court also finds that potentially serious health, safety, and environmental problems are evidenced due to the speed with which ethers are able to flow into, contaminate, and accumulate in invaluable groundwater supplies.

II. The purpose of this chapter is to provide procedures that will expedite the cleanup of gasoline ether spillage, mitigate the adverse affects of gasoline ether discharges, encourage preventive measures, impose a fee upon importers of neat gasoline ethers into the state and establish a fund for the remediation of groundwater and surface water contaminated by gasoline ethers. The fund may also be used to provide financial reimbursement to owners of public and private water supplies for the treatment and removal of gasoline ethers and associated contaminants from those supplies. The fund established under this chapter shall be in addition to the oil pollution control fund established pursuant to RSA 146-A:11-a and is separate from the oil discharge and disposal cleanup fund established pursuant to RSA 146-D:3.

I. "Discharge" or "spillage" means the release or addition of any gasoline containing ethers to land, groundwater, or surface water.

II. "Distributor" means any person, wherever resident or located, who imports or causes to be imported neat gasoline ethers, as defined in this section, into the state; provided, however, that bringing gasoline into the state in the fuel supply tank attached to the engine of a vehicle or aircraft shall not be considered importing. "Distributor" does not mean a spill cleanup organization or other person acting to contain, remove, clean up, restore, or take other remedial or corrective action or measures with regard to the spillage or discharge of gasoline or neat gasoline ethers, or threatened spillage or discharge of gasoline or neat gasoline ethers.

III. "Ethers" means organic compounds formed by the treatment of an alcohol with a dehydrating agent resulting in 2 organic radicals joined by an oxygen atom.

IV. "Facility" means a location, including structures or land, at which gasoline is subjected to treatment, storage, processing, refining, pumping, transfer, or collection.

V. "Gasoline" means all products commonly or commercially known or sold as gasoline, including casinghead and absorption of natural gasoline, regardless of their classification or uses, and any liquid prepared, advertised, offered for sale, or sold for use as or commonly and commercially used as a fuel in internal combustion engines, which when subjected to distillation in accordance with the standard method of test for distillation of gasoline, naphtha, kerosene, and similar petroleum products (ASTM Designation D-86) show not less than 10 percent distilled (recovered) below 347 degrees Fahrenheit (175 degrees Centigrade) and not less than 95 percent distilled (recovered) below 464 degrees Fahrenheit (240 degrees Centigrade); provided that the term gasoline shall not include commercial solvents or naphthas which distill by ASTM method D-86 not more than 9 percent at 176 degrees Fahrenheit and which have a distillation range of 150 degrees Fahrenheit or less, or liquefied gases which would not exist as liquid at a temperature of 60 degrees Fahrenheit and a pressure of 14.7 pounds per square inch absolute.

VI. "Gasoline ethers" means any ether added to gasoline to improve or increase octane or to increase gasoline oxygen content, and their by-products, including, but not limited to, methyl tertiary butyl ether (MtBE), tertiary amyl methyl ether (TAME), di-isopropyl ether (DIPE), and ethyl tertiary butyl ether (EtBE). "Gasoline ethers" shall not include prepackaged goods intended for retail consumer use including, but not limited to, starting fluid and octane booster.

VII. "Gasoline remediation and elimination of ethers fund" means the fund established pursuant to RSA 146-G:4.

VIII. "Gasoline terminal facility" means any facility of any kind and its related appurtenances located within the boundaries of this state that is used or capable of being used for pumping, handling, transferring, processing, refining, or storing gasoline.

IX. "Groundwater" means subsurface water that occurs beneath the water table in soils and geologic formations.

X. "Neat gasoline ethers" mean ethers intended for blending with gasoline prior to sale to the public which are imported into the state with little or no admixtures or dilution. Neat gasoline ethers shall contain a minimum of 92.1 percent by volume ether, including its impurities.

XI. "Removal costs" means the costs of containment, removal, cleanup, restoration, and remedial or corrective action or measures that are incurred after a spillage or discharge of gasoline has occurred or, in any case in which there is a threat of a spillage or discharge of gasoline, the cost to prevent, minimize, or mitigate gasoline pollution from such an incident.

XII. "Surface water" means streams, lakes, ponds, and tidal waters within the jurisdiction of the state, including all streams, lakes, or ponds bordering on the state, marshes, watercourses, and other bodies of water, natural or artificial.

XIII. "Vessel" includes every description of watercraft or other contrivance used, or capable of being used as a means of transportation on water or land whether self-propelled or otherwise and shall include barges, tanker trucks, and railroad cars.

146-G:3 Recovery by State. Recovery of costs of containment cleanup, removal, or corrective measures expended under this chapter shall be in accordance with RSA 146-A:9.

I. There is hereby established the gasoline remediation and elimination of ethers fund. This nonlapsing, revolving fund shall be used to pay the costs to implement the provisions of this chapter which include, but are not limited to, the salaries and expenses of personnel, as approved by the legislature, to the extent that such salaries and expenses are incurred in implementing the provisions of this chapter, testing and monitoring activities, and other costs of treatment or removal or corrective measures deemed necessary by the department of environmental services as a result of an actual or potential discharge of gasoline ethers into or onto the surface water or groundwater of the state. Moneys from the fund shall be used to mitigate the adverse affects of gasoline ether discharges including, but not limited to, provision of emergency water supplies to persons affected by such pollution, and, where necessary as determined by the department of environmental services, the establishment of an acceptable source of potable water to injured parties. Not more than $150,000 shall be allocated annually for research programs dedicated to the development and improvement of preventive and cleanup measures concerning such gasoline ether discharges. The waste management council shall approve any agreements entered into by the department for purposes of conducting research. Income derived from the fund shall only be used for those administrative costs needed to implement this chapter.

II. Moneys in the fund not currently needed to meet the obligations of the department of environmental services under this chapter shall be deposited with the state treasurer to the credit of the fund and shall be invested as provided by law. Interest received on such investment shall also be credited to the fund. If the fund's balance becomes greater than $2,500,000, the transfer of moneys into the fund as established in RSA 146-D:3 shall be discontinued and only re-established when the fund's balance is below $1,000,000. Those fees normally transferred to the gasoline remediation and elimination of ethers fund shall accumulate instead in the account for reimbursement of owners of eligible underground storage facilities under RSA 146-D:3,VI.

III. All moneys paid to the state to reimburse costs paid out of the gasoline remediation and elimination of ethers fund by any person strictly liable to the state under RSA 146-A:3-a shall be placed in the gasoline remediation and elimination of ethers fund.

I. Except as provided in paragraph II, the commissioner of environmental services shall enter into the competitive bidding process for any project undertaken by the department of environmental services under the authority of this chapter with an estimated cost of $10,000 or more. The commissioner may enter the competitive bidding process for any such project with an estimated cost of less than $10,000.

II. When procuring professional services from engineers, architects, and surveyors associated with the investigation or cleanup of contamination from gasoline ethers, the commissioner of environmental services shall procure those services in accordance with the procedures contained in RSA 21-I:22.

146-G:6 Corrective Measures Authorized. Corrective measures authorized by this chapter shall include but not be limited to:

I. Provision of interim water supplies to residents whose water supplies have been contaminated due to the presence of gasoline ethers above standards set by the department of environmental services or a condition related to gasoline ethers determined to be hazardous by the office of community and public health and the state forensic toxicologist. This may include the supply of bottled water and the installation and operation of water supply treatment systems, approved or provided by the department.

II. The establishment of an acceptable source of potable water to injured parties, where necessary, as determined by the department of environmental services. This may include but not be limited to a proportioned share of the costs of construction of the extension of public water mains and appurtenances, the installation of replacement water supply wells and appurtenances, or the installation of water treatment processes for new or existing water supplies. The extent of reimbursement shall be determined based upon criteria established by rules adopted by the department of environmental services. Such rules shall consider the overall need for the capital investment to address contamination or threatened contamination of water supplies by gasoline ethers. Operation and maintenance costs or annual user fees for new or upgraded public water supply main extensions or treatment processes shall not be eligible expenses under this paragraph.

I. Any distributor who imports or causes to be imported neat gasoline ethers into the state shall be licensed by the department of safety under this chapter. The annual fee for the license shall be $0.10 per gallon of neat gasoline ethers imported into this state for the purpose of being mixed or blended with gasoline prior to sale to the public. The fee shall be paid monthly by such person to the department of safety and deposited by the department of safety into the gasoline remediation and elimination of ethers fund. Imposition of the fee shall be based on the records of the person and certified as accurate to the department of safety.

II. Every distributor who imports or causes to be imported neat gasoline ethers into the state shall file a monthly report for the preceding month and shall include all fees due for that reporting period with the department of safety on or before the twentieth day of the following calendar month. Failure to file by the required date or to enclose fees due shall result in the assessment of a 10 percent penalty to be added to the amount of fees due for that month. If no fees are due, a penalty of $10 per day shall be assessed. Such penalty shall immediately accrue and thereafter the overdue fees and the penalty shall bear interest at the rate established by the Internal Revenue Service effective on the first business day of the calendar year. To this rate shall be added 2 percent. In determining the monthly rate, that figure shall be rounded off to the nearest quarter percent. The department of environmental services may waive all or any portion of penalties or interest for good cause. Such cause and incident shall be recorded in the records of the gasoline remediation and elimination of ethers fund.

III. No distributor licensed under this section shall import neat gasoline ethers into this state without paying the fee required by this section.

IV. Unless otherwise provided, any distributor who violates any provision of this section shall be guilty of a misdemeanor if a natural person or guilty of a felony if any other person.

146-G:8 Administrative Costs. Notwithstanding any other provision of law, if the expenditure of additional funds is necessary for the costs of administration of the collection process established in RSA 146-D:3 and RSA 146-G:7 for funding the gasoline remediation and elimination of ethers fund, the commissioner of safety, with the prior approval of the governor and council, may draw upon the gasoline remediation and elimination of ethers fund for such purposes.

146-G:9 Reporting by Department of Environmental Services. The department of environmental services shall file annual reports of the status of the gasoline remediation and elimination of ethers fund no later than October 1, to the speaker of the house and president of the senate. The first such report shall be submitted no later than October 1, 2002. The department of environmental services shall also file interim reports on the activities of the gasoline remediation and elimination of ethers fund, including expenditures and reimbursements, and enforcement and remediation activities under RSA 146-G, by October 1, 2005 and by October 1, 2009 to the senate president, the speaker of the house of representatives, the senate clerk, the house clerk, the house and senate committees having jurisdiction over water quality policy, the governor, and the state library. The department shall file a final report on the activities of the fund and enforcement and remediation activities by October 1, 2010 to the senate president, the speaker of the house of representatives, the senate clerk, the house clerk, the house and senate committees having jurisdiction over water quality policy, the governor, and the state library.

146-G:10 Review and Report. Upon issuance of the interim report by the department of environmental services required by RSA 146-G:9, the members of house and senate committees having jurisdiction over water quality policy shall constitute a joint committee for purposes of reviewing the effectiveness of the program implemented by this chapter. The joint committee shall review the effectiveness of the program implemented by this act, and shall report the joint committee's findings and recommendations to the full senate and house.

146-G:11 Rulemaking. The commissioner shall adopt rules, pursuant to RSA 541-A, relative to the allocation of funds from the gasoline remediation and elimination of ethers fund authorized under this chapter. Construction costs due to contamination from gasoline ethers incurred by operators of public water supplies between May 4, 2000 and the effective date of department rules may be considered for compensation on a case-by-case basis subject to approval of the waste management council.

294:1 Funds Transferred to Oil Pollution Control Fund. The oil discharge and disposal cleanup fund established in RSA 146-D:3, I shall lapse on [~~January 1, 2005~~] July 1, 2010. Any moneys remaining in the fund at that time shall be transferred to the oil pollution control fund established in RSA 146-A:11-a.

6 Effective Date of Repeal Changed. Amend 1988, 271:11, I as amended by 1993, 294:14 and 1995, 247:10 to read as follows:

I. Paragraphs VIII and IX of section 9 of this act shall take effect [~~January 1, 2005~~] July 1, 2010.

I. RSA 146-G, excluding RSA 146-G:9, relative to the gasoline remediation and elimination of ethers fund, is repealed.

II. RSA 146-G:9, relative to reporting on the gasoline remediation and elimination of ethers fund, is repealed.

8 Funds Transferred to Oil Pollution Control Fund. The gasoline remediation and elimination of ethers fund established in RSA 146-G:4, I shall lapse on July 1, 2010. Any moneys remaining in the fund at that time shall be transferred to the oil pollution control fund established in RSA 146-A:11-a.

The Department of Environmental Services states this bill would create the gasoline remediation and elimination of ethers fund for the investigation, sampling, and remediation of groundwater and surface water contaminated by the gasoline additive methyl tertiary butyl ether (MtBE). The fund would permit the Department to install treatment systems for public and private drinking waters supplies contaminated with MtBE. In some instances, where public water supplies were nearby, the fund would provide funds to extend those water supplies to the affected properties. Revenue to the newly established fund would be generated by a fee on gasoline sold in the State of $.0025 per gallon. The fund would have a cap of $2,000,000 and the fee would be discontinued once this cap is reached, and reinstated when the balance in the fund dropped below 20% of the cap amount (below $1,600,000). The Department estimates gasoline consumption in the State at 720 million gallons per year, resulting in fund revenues of $1,800,000 in FY 2002 and each year thereafter (720 million gallons X $.0025).

The Department states annual expenditures from the fund would be limited to revenue collected, plus any carryover from previous years. Oil Pollution Control Fund investigation and cleanup costs for homes whose drinking water is affected by MtBE would be removed from that program and placed under the newly established fund. Costs to the Department would include staff time in both the Waste Management Division and Water Division to investigate complaints of MtBE contamination in both private and public water supplies, installation and operations and maintenance of point-of-entry treatment systems for private water supplies, contracts with engineering consultants for the investigation of large-scale contamination and remediation of groundwater contamination, cost sharing with public water suppliers for the extension of public water supplies to homes with contaminated water supplies, and construction of water treatment systems for public water supplies where the MtBE concentration exceeds the state drinking water standard. Expenditures for these activities would total $900,000 in FY 2002, $1,000,000 in FY 2003, $1,100,000 in FY 2004, and $1,200,000 in FY 2005. Accordingly, Oil Pollution Control Fund expenditures would see a reduction.

The Department states expenditures are projected to exceed revenues by $600,000, therefor, generating insufficient revenues to support projected future expenditures to address the statewide MtBE problem. The new fund balance is expected to accumulate and reach its cap in four years or less. Without sufficient revenues from this fund or from some other source, State aid to parties affected by MtBE would be reduced.

The Department further states there would be cost savings to a municipality when the fund is used to partially offset the cost of extending a municipality's water distribution system to an area where MtBE contamination is present. The Department does not anticipate any fiscal impact on county revenue or expenditures.

The Department of Safety states they are unable to determine the fiscal impact of this bill. The Department estimates this bill would increase state revenue by approximately $1,650,000, assuming all gasoline imported into the state contains ethers in excess of .1 percent by volume, the fee will be based on $.0025 per gallon, and an the estimated 660 million gallons annually. However, the Department has no data on the number of gallons of gasoline ethers that are imported into the state to be mixed with gasoline prior to sale to the public. Also, this legislation is unclear as to which fee rate applies, or who chooses the rate method. The Department cannot determine the additional administrative costs that might be incurred as a result of this added responsibility.