Print Friendly SENATE BILL NO. 1583 – Petroleum products, transfer fee
SENATE BILL NO. 1583
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S1583......................................................by STATE AFFAIRS
PETROLEUM PRODUCTS - Amends existing law to provide that the manager of the
State Insurance Fund, subject to appropriation, is authorized to utilize
the Idaho Petroleum Clean Water Trust Fund for the purpose of insuring
private and governmental entities that are owners and operators of
petroleum storage tanks; and to provide for reinitiation of the transfer
fee when the unencumbered balance in the fund equals $15,000,000; and to
provide that all moneys which may come into the Idaho Petroleum Clean Water
Trust Fund may be expended by the manager of the State Insurance Fund only
pursuant to legislative appropriation.
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|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE SENATE
SENATE BILL NO. 1583
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO THE IDAHO PETROLEUM CLEAN WATER TRUST FUND; AMENDING SECTION
3 41-4904, IDAHO CODE, TO PROVIDE THAT THE MANAGER OF THE STATE INSURANCE
4 FUND, SUBJECT TO APPROPRIATION, IS AUTHORIZED TO UTILIZE THE IDAHO PETRO-
5 LEUM CLEAN WATER TRUST FUND FOR THE PURPOSE OF INSURING PRIVATE AND GOV-
6 ERNMENTAL ENTITIES THAT ARE OWNERS AND OPERATORS OF PETROLEUM STORAGE
7 TANKS; AMENDING SECTION 41-4914, IDAHO CODE, TO PROVIDE THAT ALL MONEYS
8 WHICH MAY COME INTO THE IDAHO PETROLEUM CLEAN WATER TRUST FUND MAY BE
9 EXPENDED BY THE MANAGER OF THE STATE INSURANCE FUND ONLY PURSUANT TO LEG-
10 ISLATIVE APPROPRIATION; AND PROVIDING AN EFFECTIVE DATE.
11 Be It Enacted by the Legislature of the State of Idaho:
12 SECTION 1. That Section 41-4904, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 41-4904. CREATION, AUTHORIZATION AND MANAGEMENT OF THE IDAHO PETROLEUM
15 CLEAN WATER TRUST FUND. (1) The Idaho petroleum clean water trust fund is
16 hereby created, subject to the direction and supervision of the board, and the
17 manager of the state insurance fund, subject to appropriation, is hereby
18 authorized to utilize this trust fund for the purpose of insuring governmental
19 and private entities who are owners and operators of petroleum storage tanks
20 against the costs of corrective action and compensating third parties that are
21 legally entitled to receive compensation for bodily injury and property damage
22 arising out of accidental releases of petroleum from petroleum storage tanks
23 covered by a contract of insurance between the owner or operator and the trust
24 fund. The manager shall be the trustee of this fund, and shall appoint an
25 administrator of this fund who shall be an employee of the state insurance
27 (2) Nothing in this chapter shall enlarge or otherwise adversely affect
28 the legal liability of any legal entity insured by the trust fund, and any
29 immunity or other bar to a civil lawsuit under Idaho or federal law shall
30 remain in effect. The fact that the trust fund insures the legal liability of
31 any legal entity and thus may relieve the entity or an employee of the entity
32 from the payment of any judgment arising from a civil lawsuit, shall not be
33 communicated to the trier of fact in such a lawsuit.
34 (3) The trust fund shall consist of all application fees and all transfer
35 fees collected pursuant to section 41-4908, Idaho Code, all other moneys
36 received and paid into the trust fund, property and securities acquired by or
37 through the use of money belonging to the trust fund, money loaned to the
38 trust fund under the terms and agreements of a subordinated note of indebted-
39 ness or borrowed surplus as hereinafter defined and authorized, and of inter-
40 est earned on money and securities owned or in the possession of the trust
41 fund under an agreement that such investment earnings can accrue to the bene-
42 fit of the trust fund.
43 (4) The trust fund shall have the powers and privileges of a nonprofit
1 corporate entity and in its name may sue and be sued in any court of competent
2 jurisdiction, and may lease and maintain offices and space for its departmen-
3 tal and operational facilities, subject to the provisions of chapters 6 and 7,
4 title 41, Idaho Code.
5 (5) (a) The personnel costs, operating expenditures and capital outlay
6 budget of the trust fund shall be subject to review and approval in the
7 appropriation of the state insurance fund, and it is the intent of this
8 chapter that the trust fund be a self-supporting insurance fund, so that
9 no appropriations, loans, or other transfers of state funds need to be
10 made to the trust fund except as follows:
11 (i) A temporary line of credit for the initial start-up costs of
12 the trust fund may be obtained as provided in paragraph (b) of this
13 subsection; and
14 (ii) A temporary line of credit to offset any temporary shortages in
15 the operating fund balance of the trust fund may be obtained as pro-
16 vided in paragraph (b) of this subsection.
17 (b) There is hereby established a temporary line of credit to be drawn
18 from the state general account to the trust fund account in the amount of
19 one million dollars ($1,000,000). This amount of money is continuously
20 appropriated for the purposes of this chapter. The temporary line of
21 credit may be drawn upon by the trust fund only during the first eighteen
22 (18) months after the effective date of this chapter and only for the pur-
23 pose of financing the initial start-up costs of the trust fund and any
24 temporary shortages in the operating fund balance of the trust fund. The
25 manager may draw upon all or part of the temporary line of credit, as
26 shall be required. The money advanced from the state general account shall
27 be repaid with interest from surplus moneys in the trust fund to the gen-
28 eral account within one (1) year from the date the trust fund commences to
29 issue contracts of insurance. Interest of ten percent (10%) per annum
30 shall be calculated upon the principal amount outstanding each month until
32 (c) In the event the trust fund is unable to repay the funds drawn from
33 the state general account under the temporary line of credit established
34 under paragraph (b) of this subsection due to the dissolution of the trust
35 fund pursuant to a court order, then an amount necessary to repay the line
36 of credit shall be appropriated by the next regular session of the state
38 (d) Funds obtained from the temporary line of credit shall constitute a
39 subordinated indebtedness subject to the provisions of section 41-4943,
40 Idaho Code.
41 (6) The manager of the state insurance fund, as trustee of the trust
42 fund, shall enter into a management and administrative contract with the state
43 insurance fund to provide the following services to the trust fund:
44 (a) Administrative functions including the hiring of qualified personnel
45 and the payment of salaries and wages earned, plus recordkeeping for the
46 personnel hired to provide services for the trust fund.
47 (b) Accounting and recordkeeping of all receipts and disbursements of the
48 trust fund.
49 (c) Underwriting functions of the trust fund to issue contracts of lia-
50 bility insurance and charge appropriate application fees under section
51 41-4908, Idaho Code, for such contracts and keep accurate statistical
53 (d) Claims handling functions of the trust fund to process and pay appro-
54 priate claims in a prompt, fair and reasonable manner.
55 (e) Auditing functions of the trust fund to maintain accurate records of
1 receipts and disbursements by the trust fund and accurate reporting of
2 statistics by owners or operators of storage tanks covered by a contract
3 of insurance issued by the trust fund.
4 (f) Actuarial functions of the trust fund to maintain credible and viable
5 statistics, sufficient operating fund balances, and appropriate loss
7 (g) Computer and data processing functions to assist the trust fund in
8 maintaining complete and accurate records in a timely manner and issue
9 loss payments and other disbursements, as well as provide individual sta-
10 tistics and records of storage tanks covered by a contract of insurance
11 issued by the trust fund.
12 (h) Computer programming functions to maintain a proficient and current
13 data processing system for the trust fund.
14 (i) Legal services for the trust fund.
15 (j) Any and all other functions the manager of the state insurance fund
16 as trustee deems prudent and reasonable to assure the successful operation
17 of the trust fund.
18 (7) The Idaho petroleum clean water trust fund shall be administered
19 without liability on the part of the state insurance fund or the state of
20 Idaho beyond the amount of said trust fund.
21 (8) The administrator, subject to the approval of the manager of the
22 state insurance fund as trustee, shall have the power to receive and account
23 for all moneys paid into the trust fund, accept and evaluate applications for
24 insurance coverage and issue the contracts of insurance and evaluate, investi-
25 gate and adjust claims made against the trust fund and make agreements for
26 corrective actions or compensation to third parties for bodily injury or prop-
27 erty damage those parties may be legally entitled to receive from the trust
28 fund in accordance with the provisions of this chapter.
29 (9) The administrator, with the approval of the trustee, shall establish
30 underwriting procedures to issue contracts of insurance and claim procedures.
31 The administrator shall be given notice of all applications, hearings and pro-
32 ceedings involving the rights of the trust fund and shall represent the trust
33 fund in all proceedings. The administrator's decisions shall be written, and
34 shall include all reasons for his decisions and shall be subject to judicial
35 review in the district court of Ada county; provided, however, that the admin-
36 istrator and the trust fund shall not be liable for alleged bad faith or other
37 legal theories based on any method or timing of the claims processed on his
39 (10) The manager of the state insurance fund may employ legal counsel or
40 obtain legal counsel through the attorney general concerning all legal matters
41 arising out of the existence and operation of the trust fund, including claims
42 made against the contracts of insurance issued by the administrator of the
43 trust fund.
44 (11) The manager of the state insurance fund may also employ such employ-
45 ees or contract for such services as are necessary to assist in the adminis-
46 tration of the trust fund, and all such administrative expenses incurred by
47 the state insurance fund for the benefit of the trust fund shall be reimbursed
48 by the trust fund.
49 (12) The administrator may, in his official capacity, sue and be sued in
50 all courts of the state, and shall be entitled to a defense by the state of
51 Idaho for any alleged acts of negligence that may arise out of his official
52 duties as administrator and/or as an employee of the state of Idaho.
53 SECTION 2. That Section 41-4914, Idaho Code, be, and the same is hereby
54 amended to read as follows:
1 41-4914. PERPETUAL APPROPRIATION. All moneys which may come into the
2 Idaho petroleum clean water trust fund are hereby perpetually appropriated to
3 may be expended by the manager of the state insurance fund as trustee to be
4 expended by him only pursuant to legislative appropriation for the purposes of
5 this chapter.
6 SECTION 3. This act shall be in full force and effect on and after Janu-
7 ary 1, 2001.
STATEMENT OF PURPOSE
State law provides that the personnel costs, operating expenditures and capital
outlay budget of the Idaho Petroleum Clean Water Trust Fund shall be subject to
review and approval in the appropriation of the state insurance fund and that no
other appropriations need to be made. This is accomplished through a perpetual
appropriation. This legislation removes the perpetual appropriation and requires
that all moneys be appropriated for any purposes.
There is some fiscal impact. The manager of the state insurance fund will be
required to submit an annual budget request, including performance information,
for the Idaho Petroleum Clean Water Trust Fund pursuant to section 67-3502.
The effective date is July 1, 2001, which allows the manager time to submit the
fiscal year 2002 budget request. The budget request must be submitted on a state
fiscal year basis rather than a calendar year basis as is currently used by the Fund.
Furthermore, the budget request would not be limited to personnel costs,
operating expenditures, and capital outlay but would include all estimated needs
for all purposes including claims expenses.
Contact: Senator Evan Frasure 2-1000
STATEMENT OF PURPOSE/FISCAL NOTE S 1583