HBA-CBW C.S.H.B. 2687 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 2687
By: Junell
Natural Resources
4/10/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Under current law, a petroleum product delivery fee is assessed on bulk
loads of motor fuel.  The revenue from this fee is used to fund the
petroleum storage tank remediation account (account) and is administered by
the Texas Natural Resource Conservation Commission (TNRCC).  The account
serves as a state sponsored insurance fund to reimburse tank owners in the
effort to clean up contaminated and leaking tanks.  In 1995, the fee was
doubled to pay back obligations from the general revenue fund issued when
the account was insolvent. 

As of December 22, 1998, tank owners may no longer rely on the account as
proof of federally mandated insurance.  To meet federal requirements, tank
owners must now acquire cleanup insurance from private insurance providers.
In addition,  there are concerns that the account will no longer accept new
claims for cleanup projects. 

In 1999,  the 76th Legislature passed legislation that limited the
administrative expenses of the account to an amount specifically
appropriated for that purpose, decreased by one-quarter the petroleum
product delivery fee on bulk loads of motor fuel, and provided for the
termination of the account by September 1, 2003.    In addition, the Act
suspended the petroleum product delivery fee (fee) after the account
reached its unobligated balance cap of $100 million in February 2000.  The
fee may be reinstated if the unobligated balance falls to $25 million.  

There are concerns that the remediation projects eligible for reimbursement
for corrective action expenses may not be finished by the 2003 deadline,
the unobligated balance may fall back to $25 million by December 2001, and
the corrective actions may take longer than anticipated. C.S.H.B.  2687
provides for the continuation of the groundwater protection cleanup program
until September 1, 2006, reduces the delivery fees for users of certain
petroleum products and sets forth provisions regarding the application of
such fees. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

C.S.H.B. 2687 amends the Water Code to increase from 6.7 to 11.8 percent
the amount of gross receipts of the petroleum storage tank remediation
account (account) for fiscal year 2002-2003;16.40 percent of the gross
receipts of that account for fiscal year 2004-2005; and 21.01 percent of
the gross receipts of that account for 2006-2007 that the Texas Natural
Resource Conservation Commission (TNRCC) is authorized to spend on expenses
associated with the administration of the account and the groundwater
protection cleanup program (program).  The bill also prohibits the account
from being used to reimburse any person for corrective action performed
after September 1, 2005, or a reimbursement claim filed with TNRCC after
March 1, 2006 (Sec. 26.3573).  The bill decreases, and sets forth
incremental reductions of, the fees imposed on the withdrawal of a
petroleum product from a bulk facility (fee).  The bill deletes  provisions
regarding the imposition of fees based on the balance of the account (Sec.
26.3574).  

The bill requires a person performing corrective action, if the release was
reported to TNRCC on or before December 22, 1998, to meet certain deadlines
and sets forth provisions regarding the failure of the person to comply
with such deadlines and prohibits the use of account funds to reimburse an
owner or operator who misses a deadline (Secs. 26.351 and 26.3571). The
bill prohibits funds from the account from being used  to pay for certain
corrective action expenses for which reimbursement is prohibited (Sec.
26.3512). The bill provides that limitations on the amount of money TNRCC
may recover is not applicable to cost recovery actions initiated by the
executive director of TNRCC (executive director) at sites where the
executive director has determined that the owner or operator has missed a
deadline (Sec. 26.355).   

The bill provides  that the program expires September 1, 2006, rather than
2003. The bill prohibits  the use of account funds for the reimbursement to
any person for corrective performed after September 1, 2005 and prohibits
TNRCC from using money from the account for reimbursements on or after
September 1, 2006, rather than 2003.  The bill deletes and repeals the
provision which prohibits TNRCC from collecting a fee on or after March 1,
2002 (Secs. 26.361, 26.3573 and SECTION 11). 

The bill replaces references to a storage tank storing gasoline or diesel
fuel with references to a storage tank used for storing motor fuels as
defined in TNRCC rule (Sec. 26.346).  The bill also modifies the definition
of  "owner" to include a person who owns an aboveground storage tank (Sec.
26.342). 

EFFECTIVE DATE

September 1, 2001.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 2687 differs from the original bill by setting forth provisions
regarding deadlines for a person performing corrective actions as well as a
prohibition on spending funds from the petroleum storage tank remediation
account (account) on certain expenses (Secs. 26.351, 26.3512, 26.355, and
26.3571).  The substitute increases from 6 to 11.8 percent, rather than
decreases from 6.7 to six percent, the percentage of the account that  the
Texas Natural Resource Conservation Commission (TNRCC) may spend on the
groundwater protection cleanup program and the administration of the
account, and sets forth provisions for incrementally higher percentages in
future years.  The bill prohibits the use of account funds to reimburse an
owner or operator who misses a deadline and prohibits the reimbursement for
any corrective action performed after September 1, 2005 (Secs. 26.3573 and
26.3571).  The substitute reduces the fee imposed on the withdrawal of a
petroleum product from a bulk facility and provides for the  incremental
reduction of the fee.  The substitute also removes provisions from the
original which provide for the cessation of the collection of the fees when
the account exceeds a balance of $96 million (Sec. 26.3574).  The
substitute changes the year in which the reimbursement program will expire
from 2005 to 2006.  The substitute deletes and repeals the provision
prohibiting TNRCC from collecting a fee pursuant to the reimbursement
program on or after March 1, 2002 (Sec. 26.361 and SECTION 11).  The
substitute differs from the original bill by  providing  that the
limitation on cost recovery actions initiated by the executive director of
TNRCC does not apply in instances where the owner or operator is in
violation of certain provisions regarding deadlines (Sec. 26.355).  The
substitute modifies the definition of  "owner" and specifies that these
provisions apply to storage tanks used for storing motor fuels as defined
in commission rule, rather than used for storing gasoline or diesel fuel
(Secs. 26.342 and 26.346).