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H0132..............................................................by BUSINESS
PETROLEUM CLEAN WATER TRUST FUND - Amends, adds to and repeals existing law to
provide that the manager of the State Insurance Fund shall be the Idaho
Petroleum Clean Water Trust Fund trustee; to provide for appointment of an
administrator for the Idaho Petroleum Clean Water Trust Fund; to provide a
board of trustees of the Idaho Petroleum Clean Water Trust Fund; and to
provide for membership and duties of the board of trustees.
01/30 House intro - 1st rdg - to printing
01/31 Rpt prt - to Bus
02/04 Rpt out - rec d/p - to 2nd rdg
02/05 2nd rdg - to 3rd rdg
02/06 3rd rdg - PASSED - 67-0-3
AYES -- Andersen, Barraclough, Barrett, Bauer, Bedke, Bell, Bieter,
Black, Block, Boe, Bolz, Campbell, Cannon, Clark, Collins, Crow, Cuddy,
Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth, Eskridge, Field(18),
Field(23), Gagner, Garrett, Harwood, Henbest, Jaquet, Jones, Kellogg,
Kulczyk, Lake, Langford, Langhorst, Martinez, McGeachin, McKague, Meyer,
Miller, Mitchell, Moyle, Naccarato, Nielsen, Raybould, Ridinger, Ring,
Ringo, Robison, Rydalch, Sali, Sayler, Schaefer(Schaefer), Shepherd,
Shirley, Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson,
Tilman, Trail, Wills, Wood
NAYS -- None
Absent and excused -- Bradford, Roberts, Mr. Speaker
Floor Sponsor - Deal
Title apvd - to Senate
02/07 Senate intro - 1st rdg - to Com/HuRes
03/05 Rpt out - rec d/p - to 2nd rdg
03/06 2nd rdg - to 3rd rdg
03/11 3rd rdg - PASSED - 34-0-1
AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett, Burtenshaw,
Calabretta, Cameron, Compton, Darrington, Davis, Gannon, Geddes, Goedde,
Hill, Ingram, Kennedy, Keough, Little, Lodge, Marley, McKenzie,
McWilliams, Noble, Noh, Pearce, Richardson, Schroeder, Sorensen,
Stegner, Stennett, Sweet, Werk, Williams
NAYS -- None
Absent and excused -- Malepeai
Floor Sponsor - Cameron
Title apvd - to House
03/12 To enrol
03/13 Rpt enrol - Sp signed
03/14 Pres signed
03/17 To Governor
Governor signed
Session Law Chapter 96
Effective: 07/01/03
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-seventh Legislature First Regular Session - 2003
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 132
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO THE IDAHO PETROLEUM CLEAN WATER TRUST FUND ACT; AMENDING SECTION
3 9-340F, IDAHO CODE, TO PROVIDE CORRECT CODE CITATIONS; AMENDING SECTION
4 41-4903, IDAHO CODE, TO REVISE DEFINITIONS, TO REMOVE THE DEFINITION FOR
5 "MANAGER" AND TO PROVIDE A CORRECT CODE CITATION; AMENDING SECTION
6 41-4904, IDAHO CODE, TO REDESIGNATE THE SECTION, TO PROVIDE CORRECT TERMI-
7 NOLOGY, TO REMOVE LANGUAGE PROVIDING THAT THE MANAGER SHALL BE THE FUND
8 TRUSTEE AND SHALL APPOINT AN ADMINISTRATOR, TO REMOVE LANGUAGE REQUIRING
9 THE REVIEW AND APPROVAL OF CERTAIN APPROPRIATIONS BY THE STATE INSURANCE
10 FUND, TO REMOVE LANGUAGE PROVIDING FOR A LINE OF CREDIT, APPROPRIATIONS
11 AND SUBORDINATED INDEBTEDNESS, TO REMOVE LANGUAGE REQUIRING THE APPROVAL
12 OF THE MANAGER OR TRUSTEE FOR CERTAIN ACTIONS, TO REMOVE LANGUAGE PROVID-
13 ING FOR ADMINISTRATOR LIABILITY AND TO PROVIDE CORRECT CODE CITATIONS;
14 AMENDING CHAPTER 49, TITLE 41, IDAHO CODE, BY THE ADDITION OF A NEW SEC-
15 TION 41-4904, IDAHO CODE, TO PROVIDE FOR THE APPOINTMENT OF A BOARD OF
16 TRUSTEES OF THE FUND AND THE DESIGNATION OF THE STATE INSURANCE FUND AS
17 THE ADMINISTRATOR TO SERVE AT THE PLEASURE OF THE BOARD AND UNLESS
18 REPLACED BY THE BOARD, TO AUTHORIZE THE BOARD TO APPOINT AND EMPLOY PER-
19 SONS AS REQUIRED AND TO REQUIRE THE BOARD TO DIRECT THE POLICIES AND OPER-
20 ATION OF THE FUND FOR SPECIFIED PURPOSES; AMENDING SECTION 41-4905, IDAHO
21 CODE, TO REDESIGNATE THE SECTION AND TO MAKE A TECHNICAL CORRECTION;
22 AMENDING SECTIONS 41-4906 AND 41-4907, IDAHO CODE, TO REDESIGNATE THE SEC-
23 TIONS; AMENDING SECTION 41-4908, IDAHO CODE, TO REDESIGNATE THE SECTION
24 AND TO PROVIDE CORRECT TERMINOLOGY; AMENDING SECTIONS 41-4909, 41-4909A
25 AND 41-4910, IDAHO CODE, TO REDESIGNATE THE SECTIONS AND TO PROVIDE COR-
26 RECT CODE CITATIONS; AMENDING SECTION 41-4910A, IDAHO CODE, TO REDESIGNATE
27 THE SECTION; AMENDING SECTIONS 41-4911 AND 41-4911A, IDAHO CODE, TO REDES-
28 IGNATE THE SECTIONS AND TO PROVIDE CORRECT CODE CITATIONS; AMENDING SEC-
29 TIONS 41-4912 AND 41-4913, IDAHO CODE, TO REDESIGNATE THE SECTIONS; AMEND-
30 ING SECTION 41-4914, IDAHO CODE, TO REDESIGNATE THE SECTION AND TO PROVIDE
31 FOR PERPETUAL APPROPRIATION TO THE TRUST FUND; AMENDING SECTION 41-4915,
32 IDAHO CODE, TO REDESIGNATE THE SECTION; AMENDING SECTION 41-4916, IDAHO
33 CODE, TO REDESIGNATE THE SECTION, TO PROVIDE CORRECT CODE CITATIONS AND TO
34 MAKE A TECHNICAL CORRECTION; AMENDING SECTION 41-4917, IDAHO CODE, TO
35 REDESIGNATE THE SECTION; AMENDING SECTION 41-4918, IDAHO CODE, TO REDESIG-
36 NATE THE SECTION AND TO MAKE A TECHNICAL CORRECTION; AMENDING SECTION
37 41-4919, IDAHO CODE, TO REDESIGNATE THE SECTION, TO PROVIDE CORRECT TERMI-
38 NOLOGY AND TO REMOVE OBSOLETE LANGUAGE; AMENDING SECTIONS 41-4920, 41-4921
39 AND 41-4922, IDAHO CODE, TO REDESIGNATE THE SECTIONS; AMENDING SECTION
40 41-4923, IDAHO CODE, TO REDESIGNATE THE SECTION AND TO REMOVE LANGUAGE
41 REFERENCING A TRUSTEE OF THE TRUST FUND; AMENDING SECTION 41-4924, IDAHO
42 CODE, TO REDESIGNATE THE SECTION, TO PROVIDE CORRECT TERMINOLOGY AND TO
43 PROVIDE A CORRECT CODE CITATION; AMENDING SECTION 41-4924A, IDAHO CODE, TO
44 REDESIGNATE THE SECTION AND TO PROVIDE A CORRECT CODE CITATION; REPEALING
45 SECTION 41-4926, IDAHO CODE, RELATING TO THE FILING OF DOCUMENT OF ORGANI-
46 ZATION; AMENDING SECTION 41-4925, IDAHO CODE, TO REDESIGNATE THE SECTION
2
1 AND TO PROVIDE A CORRECT CODE CITATION; AMENDING SECTION 41-4930, IDAHO
2 CODE, TO REDESIGNATE THE SECTION, TO PROVIDE CORRECT TERMINOLOGY AND TO
3 REMOVE LANGUAGE REFERRING TO THE MANAGER OF THE STATE INSURANCE FUND AS
4 TRUSTEE UNDER CONTRACT TO ADMINISTER FUND OPERATIONS; AMENDING SECTION
5 41-4931, IDAHO CODE, TO REDESIGNATE THE SECTION AND TO PROVIDE CORRECT
6 TERMINOLOGY; AMENDING SECTION 41-4932, IDAHO CODE, TO REDESIGNATE THE SEC-
7 TION, TO REMOVE A REFERENCE TO EXCLUSIVE MANAGEMENT CONTRACT AND TO PRO-
8 VIDE CORRECT TERMINOLOGY; AMENDING SECTION 41-4933, IDAHO CODE, TO REDES-
9 IGNATE THE SECTION, TO PROVIDE CORRECT TERMINOLOGY AND TO PROVIDE A COR-
10 RECT CODE CITATION; AMENDING SECTION 41-4934, IDAHO CODE, TO REDESIGNATE
11 THE SECTION; AMENDING SECTION 41-4935, IDAHO CODE, TO REDESIGNATE THE SEC-
12 TION AND TO PROVIDE CORRECT TERMINOLOGY; AMENDING SECTION 41-4936, IDAHO
13 CODE, TO REDESIGNATE THE SECTION, TO PROVIDE CORRECT TERMINOLOGY AND TO
14 MAKE A TECHNICAL CORRECTION; AMENDING SECTIONS 41-4937, 41-4938 AND
15 41-4939, IDAHO CODE, TO REDESIGNATE THE SECTIONS AND TO PROVIDE CORRECT
16 TERMINOLOGY; AMENDING SECTION 41-4940, IDAHO CODE, TO REDESIGNATE THE SEC-
17 TION AND TO PROVIDE A CORRECT CODE CITATION; AMENDING SECTION 41-4941,
18 IDAHO CODE, TO REDESIGNATE THE SECTION, TO PROVIDE CORRECT TERMINOLOGY AND
19 TO PROVIDE A CORRECT CODE CITATION; AMENDING SECTION 41-4942, IDAHO CODE,
20 TO REDESIGNATE THE SECTION AND TO REMOVE LANGUAGE REFERENCING MANAGER
21 OVERSIGHT; AMENDING SECTION 41-4943, IDAHO CODE, TO REDESIGNATE THE SEC-
22 TION; AMENDING SECTION 41-4944, IDAHO CODE, TO REDESIGNATE THE SECTION AND
23 TO MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 41-4945, IDAHO CODE, TO
24 REDESIGNATE THE SECTION, TO PROVIDE CORRECT TERMINOLOGY AND TO MAKE TECH-
25 NICAL CORRECTIONS; AMENDING SECTION 41-4946, IDAHO CODE, TO REDESIGNATE
26 THE SECTION AND TO PROVIDE CORRECT TERMINOLOGY; AMENDING SECTION 41-4947,
27 IDAHO CODE, TO REDESIGNATE THE SECTION; REPEALING SECTION 41-4948, IDAHO
28 CODE, RELATING TO LEGISLATIVE REVIEW OF THE FUND PROGRAM; AMENDING CHAPTER
29 49, TITLE 41, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 41-4945, IDAHO
30 CODE, TO PROVIDE FOR IMMUNITY FROM PERSONAL LIABILITY; AMENDING CHAPTER
31 49, TITLE 41, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 41-4946, IDAHO
32 CODE, TO PROVIDE THAT ACTIONS AGAINST THE FUND, ITS EMPLOYEES AND THE
33 ADMINISTRATOR ARE SUBJECT TO THE IDAHO TORT CLAIMS ACT; AND AMENDING SEC-
34 TIONS 63-2427A AND 63-2427B, IDAHO CODE, TO PROVIDE CORRECT CODE CITA-
35 TIONS.
36 Be It Enacted by the Legislature of the State of Idaho:
37 SECTION 1. That Section 9-340F, Idaho Code, be, and the same is hereby
38 amended to read as follows:
39 9-340F. RECORDS EXEMPT FROM DISCLOSURE -- DRAFT LEGISLATION AND SUPPORT-
40 ING MATERIALS, TAX COMMISSION, PETROLEUM CLEAN WATER TRUST FUND. The following
41 records are exempt from disclosure:
42 (1) Records consisting of draft legislation and documents specifically
43 related to such draft legislation or research requests submitted to the legis-
44 lative services office by a member of the Idaho legislature for the purpose of
45 placing such draft legislation into a form suitable for introduction as offi-
46 cial proposed legislation of the legislature of the state of Idaho, unless the
47 individual legislator having submitted or requested such records or research
48 agrees to waive the provisions of confidentiality provided by this subsection.
49 (2) All papers, physical and electronic records and correspondence or
50 other supporting materials comprising the work papers in the possession of the
51 legislative services office or the director of legislative performance evalua-
52 tions prior to release of the related final audit and all other records or
3
1 materials in the possession of the legislative services office or the director
2 of legislative performance evaluations that would otherwise be confidential
3 or exempt from disclosure.
4 (3) Records consisting of draft congressional and legislative redistrict-
5 ing plans and documents specifically related to such draft redistricting plans
6 or research requests submitted to the commission staff by a member of the com-
7 mission for reapportionment for the purpose of placing such draft redistrict-
8 ing plan into form suitable for presentation to the full membership of the
9 commission, unless the individual commission member having submitted or
10 requested such plans or research agrees to waive the provisions of confidenti-
11 ality provided by this subsection.
12 (4) Records that identify the method by which the Idaho state tax com-
13 mission selects tax returns for audit review.
14 (5) Underwriting and claims records of the Idaho petroleum clean water
15 trust fund obtained pursuant to section 41-49045, 41-49089, 41-49101A,
16 41-49112 or 41-49112A, Idaho Code. Provided however, that this subsection
17 shall not prevent the Idaho petroleum clean water trust fund's submittal to
18 the Idaho department of environmental quality, or other regulatory agencies of
19 information necessary to satisfy an insured's corrective action requirement
20 under applicable federal or state standards in the event of a release into the
21 environment from a petroleum storage tank; and provided further that nothing
22 in this subsection shall prevent the Idaho petroleum clean water trust fund
23 from providing auditing, reporting, or actuarial information as otherwise
24 required of it pursuant to section 41-49189, 41-49245A, 41-493128, 41-49330,
25 41-49352, 41-494037 or 41-494138, Idaho Code.
26 SECTION 2. That Section 41-4903, Idaho Code, be, and the same is hereby
27 amended to read as follows:
28 41-4903. DEFINITIONS. For the purposes of this chapter:
29 (1) "Aboveground storage tank" means any one (1) or a combination of
30 tanks, including pipes connected thereto, that is used to contain an accumula-
31 tion of petroleum or petroleum products, and the volume of which, including
32 the volume of pipes connected thereto, is less than ten percent (10%) beneath
33 the surface of the ground. This term does not include a heating tank, farm
34 tank or residential tank or any tank with a capacity of one hundred ten (110)
35 gallons or less.
36 (2) "Accidental release" means any sudden or nonsudden release of petro-
37 leum from a storage tank that results in a need for corrective action or com-
38 pensation for bodily injury or property damage neither expected nor intended
39 by the tank owner or operator.
40 (3) "Administrator" means a person, other than the trustee the state
41 insurance fund or any person employed by the board of trustees to replace the
42 state insurance fund, employed by the trustee board to administer the Idaho
43 petroleum clean water trust fund.
44 (4) "Application fee" means the amount paid or payable by an owner or
45 operator applying for a contract of insurance with the trust fund to offset
46 the costs of issuing contracts of insurance and other costs of administering
47 this fund.
48 (5) "Board" means the board of directors of the state insurance fund as
49 established by section 72-901, Idaho Code trustees appointed by the governor.
50 (6) "Bodily injury" means any bodily injury, sickness, disease or death
51 sustained by any person and caused by an occurrence defined in subsection (19)
52 of this section.
53 (7) "Contamination" means the presence of petroleum or petroleum products
4
1 in surface or subsurface soil, surface water, or ground water.
2 (8) "Commission" means the state tax commission of the state of Idaho.
3 (9) "Corrective action" means those actions as are reasonably necessary
4 to satisfy applicable federal and state standards in the event of a release
5 into the environment from a petroleum storage tank. Corrective action includes
6 initial corrective action response or actions consistent with a remedial
7 action to clean up contaminated soil and ground water or address residual
8 effects after initial corrective action is taken, as well as actions necessary
9 to monitor, assess and evaluate a release. Corrective action also includes the
10 cost of removing a tank which is releasing or has been releasing petroleum
11 products and the release cannot be corrected without removing the tank; but
12 corrective action does not include the cost of replacing this tank with
13 another tank.
14 (10) "Department" means the department of insurance of the state of Idaho.
15 (11) "Director" means the director of the department of insurance.
16 (12) "Farm tank" means any tank with a capacity of more than one hundred
17 ten (110) gallons but less than one thousand one hundred (1,100) gallons situ-
18 ated above ground or underground which is used for storing motor fuel for
19 noncommercial purposes and which is located on a tract of land devoted to the
20 production of crops or raising animals, including fish, and associated resi-
21 dences and improvements. A farm tank must be located on the farm property.
22 "Farm" includes fish hatcheries, rangeland and nurseries with growing opera-
23 tions.
24 (13) "Free product" means petroleum or petroleum products in the
25 nonaqueous phase, (e.g., liquid not dissolved in water).
26 (14) "Fund" or "trust fund" means the Idaho petroleum clean water trust
27 fund.
28 (15) "Heating tank" means any tank with a capacity of more than one hun-
29 dred ten (110) gallons situated above ground or underground which is used for
30 storing heating oil for consumptive use on the premises where stored.
31 (16) "Legal defense costs" means any expense that an owner or operator or
32 the trust fund incurs in defending against claims or actions brought by the
33 federal environmental protection agency or a state agency to require correc-
34 tive action or to recover the costs of corrective action; or by or on behalf
35 of a third party for bodily injury or property damage caused by a release.
36 (17) "Licensed distributor" means any distributor who has obtained a
37 license under the provisions of section 63-2427A, Idaho Code. If a person sub-
38 ject to the fee imposed by section 41-49089(67), Idaho Code, is not required
39 to obtain a distributor's license under the provisions of chapter 24, title
40 63, Idaho Code, such person shall apply to the commission for a limited
41 license for the purpose of complying with the requirements of this chapter.
42 Such a limited license shall not be valid for any other purpose. No bond shall
43 be required for a limited license. A holder of a limited license is a
44 "licensed distributor" for the purposes of filing reports, paying fees and
45 other actions necessary to the proper administration and enforcement of this
46 chapter.
47 (18) "Manager" means the duly appointed manager of the state insurance
48 fund of the state of Idaho.
49 (19) "Noncommercial purposes" means not for resale, with respect to motor
50 fuels.
51 (2019) "Occurrence" means an accident, including continuous or repeated
52 exposure to conditions, which resulted in a release into the environment of
53 petroleum products from a petroleum storage tank.
54 (210) "Operator" means any person in control, or having responsibility
55 for, the daily operations of a petroleum storage tank.
5
1 (221) "Owner" means the owner of a petroleum storage tank, except that
2 "owner" does not include any person who, without participation in the manage-
3 ment of a petroleum storage tank, holds indicia of ownership primarily to pro-
4 tect the owner's security interest in the tank.
5 (232) "Person" means any corporation, association, partnership, one (1) or
6 more individuals, or any governmental unit, or agency thereof, other than fed-
7 eral or state agencies.
8 (243) "Petroleum" and/or "petroleum products" mean crude oil, or any frac-
9 tion thereof, which is liquid at standard conditions of temperature and pres-
10 sure (i.e., at sixty (60) degrees fahrenheit and fourteen and seven-tenths
11 (14.7) pounds per square inch absolute). The term includes motor gasoline,
12 gasohol, other alcohol blended fuels, diesel fuel, heating oil and aviation
13 fuel.
14 (254) "Property damage" means injury or destruction to tangible property
15 caused by an occurrence.
16 (265) "Release" means any spilling, leaking, emitting, discharging, escap-
17 ing, leaching, or disposing from a petroleum storage tank into ground water,
18 surface water, or surface or subsurface soils.
19 (276) "Residential tank" means any tank with a capacity of more than one
20 hundred ten (110) gallons but less than one thousand one hundred (1,100) gal-
21 lons situated above ground or underground which is used for storing motor fuel
22 for noncommercial purposes and which is located on property used primarily for
23 dwelling purposes.
24 (287) "Site" means a single parcel of property where petroleum or petro-
25 leum products are stored in a petroleum storage tank and includes all contigu-
26 ous land, structures, other appurtenances, surface water, ground water, sur-
27 face and subsurface soil, and subsurface strata within and beneath the prop-
28 erty boundary.
29 (298) "State" means the state of Idaho or any office, department, agency,
30 authority, commission, board, institution, hospital, college, university or
31 other instrumentality thereof.
32 (3029) "Tank" means a stationary device designed to contain an accumula-
33 tion of petroleum or petroleum products and constructed of nonearthen mate-
34 rials (e.g., concrete, steel, plastic) that provide structural support.
35 (310) "Trustees" means the trustees of the Idaho petroleum clean water
36 trust fund, who for the purposes of are appointed by the governor pursuant to
37 this chapter. shall be the manager of the state insurance fund of the state of
38 Idaho.
39 (321) "Underground storage tank" means any one (1) or combination of
40 tanks, including underground pipes connected thereto, that is used to contain
41 an accumulation of petroleum or petroleum products, and the volume of which,
42 including the volume of underground pipes connected thereto, is ten percent
43 (10%) or more beneath the surface of the ground. This term does not include
44 any:
45 (a) Farm or residential tank of one thousand one hundred (1,100) gallons
46 or less capacity used for storing motor fuel for noncommercial purposes;
47 (b) Tank used solely for storing heating oil for consumptive use on the
48 premises where stored;
49 (c) Septic tank;
50 (d) Pipeline facility including gathering lines regulated under:
51 (i) The natural gas pipeline safety act of 1968 (49 U.S.C. app.
52 1671, et seq.); or
53 (ii) The hazardous liquid pipeline safety act of 1979 (49 U.S.C.
54 app. 2001, et seq.); or
55 (iii) State laws comparable to the provisions of the law referred to
6
1 in paragraph (d)(i) or (d)(ii) of this subsection as an intrastate
2 pipeline facility;
3 (e) Surface impoundment, pit, pond or lagoon;
4 (f) Storm water or wastewater collection system;
5 (g) Flow-through process tank;
6 (h) Liquid trap or associated gathering lines directly related to oil or
7 gas production and gathering operations;
8 (i) Storage tank situated in an underground area (such as a basement,
9 cellar, mineworking, drift, shaft, or tunnel) if the storage tank is situ-
10 ated upon or above the surface of the floor;
11 (j) Tanks with a capacity of one hundred ten (110) gallons or less.
12 The term "underground storage tank" does not include any pipes connected to
13 any tank which is described in paragraphs (a) through (i) of this definition.
14 (332) "Underground storage tank regulations" means regulations for petro-
15 leum storage tanks promulgated by the United States environmental protection
16 agency (EPA) pursuant to subtitle I of the solid waste disposal act, as
17 amended by the resource conservation and recovery act, regulations promul-
18 gated by the state of Idaho as part of a state program for underground storage
19 tank regulation under subtitle I, or other regulations affecting underground
20 storage tank operations and management, including the international fire code
21 adopted by the state of Idaho.
22 SECTION 3. That Section 41-4904, Idaho Code, be, and the same is hereby
23 amended to read as follows:
24 41-49045. CREATION, AUTHORIZATION AND MANAGEMENT OF THE IDAHO PETROLEUM
25 CLEAN WATER TRUST FUND. (1) The Idaho petroleum clean water trust fund is
26 hereby created, subject to the direction and supervision of the board, and the
27 manager of the state insurance fund administrator is hereby authorized to uti-
28 lize this trust fund for the purpose of insuring governmental and private
29 entities who are owners and operators of petroleum storage tanks against the
30 costs of corrective action and compensating third parties that are legally
31 entitled to receive compensation for bodily injury and property damage arising
32 out of accidental releases of petroleum from petroleum storage tanks covered
33 by a contract of insurance between the owner or operator and the trust fund.
34 The manager shall be the trustee of this fund, and shall appoint an adminis-
35 trator of this fund who shall be an employee of the state insurance fund.
36 (2) Nothing in this chapter shall enlarge or otherwise adversely affect
37 the legal liability of any legal entity insured by the trust fund, and any
38 immunity or other bar to a civil lawsuit under Idaho or federal law shall
39 remain in effect. The fact that the trust fund insures the legal liability of
40 any legal entity and thus may relieve the entity or an employee of the entity
41 from the payment of any judgment arising from a civil lawsuit, shall not be
42 communicated to the trier of fact in such a lawsuit.
43 (3) The trust fund shall consist of all application fees and all transfer
44 fees collected pursuant to section 41-49089, Idaho Code, all other moneys
45 received and paid into the trust fund, property and securities acquired by or
46 through the use of money belonging to the trust fund, money loaned to the
47 trust fund under the terms and agreements of a subordinated note of indebted-
48 ness or borrowed surplus as hereinafter defined and authorized, and of inter-
49 est earned on money and securities owned or in the possession of the trust
50 fund under an agreement that such investment earnings can accrue to the bene-
51 fit of the trust fund.
52 (4) The trust fund shall have the powers and privileges of a nonprofit
53 corporate entity and in its name may sue and be sued in any court of competent
7
1 jurisdiction, and may lease and maintain offices and space for its departmen-
2 tal and operational facilities, subject to the provisions of chapters 6 and 7,
3 title 41, Idaho Code.
4 (5) (a) The personnel costs, operating expenditures and capital outlay
5 budget of the trust fund shall be subject to review and approval in the
6 appropriation of the state insurance fund, and it is the intent of this
7 chapter that the trust fund be a self-supporting insurance fund, so that
8 no appropriations, loans, or other transfers of state funds need to be
9 made to the trust fund except as follows:
10 (i) A temporary line of credit for the initial start-up costs of
11 the trust fund may be obtained as provided in paragraph (b) of this
12 subsection; and
13 (ii) A temporary line of credit to offset any temporary shortages in
14 the operating fund balance of the trust fund may be obtained as pro-
15 vided in paragraph (b) of this subsection.
16 (b) There is hereby established a temporary line of credit to be drawn
17 from the state general account to the trust fund account in the amount of
18 one million dollars ($1,000,000). This amount of money is continuously
19 appropriated for the purposes of this chapter. The temporary line of
20 credit may be drawn upon by the trust fund only during the first eighteen
21 (18) months after the effective date of this chapter and only for the pur-
22 pose of financing the initial start-up costs of the trust fund and any
23 temporary shortages in the operating fund balance of the trust fund. The
24 manager may draw upon all or part of the temporary line of credit, as
25 shall be required. The money advanced from the state general account shall
26 be repaid with interest from surplus moneys in the trust fund to the gen-
27 eral account within one (1) year from the date the trust fund commences to
28 issue contracts of insurance. Interest of ten percent (10%) per annum
29 shall be calculated upon the principal amount outstanding each month until
30 repaid.
31 (c) In the event the trust fund is unable to repay the funds drawn from
32 the state general account under the temporary line of credit established
33 under paragraph (b) of this subsection due to the dissolution of the trust
34 fund pursuant to a court order, then an amount necessary to repay the line
35 of credit shall be appropriated by the next regular session of the state
36 legislature.
37 (d) Funds obtained from the temporary line of credit shall constitute a
38 subordinated indebtedness subject to the provisions of section 41-4943,
39 Idaho Code.
40 (6) The manager of the state insurance fund, as trustee of the trust
41 fund, administrator shall enter into a management and administrative contract
42 with the state insurance trust fund to provide the following services: to the
43 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 41-49089, Idaho Code, for such contracts and keep accurate statistical
52 records.
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
8
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
6 reserves.
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 administrator deems prudent and reasonable to assure the suc-
17 cessful operation of the trust fund.
18 (76) 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 (87) 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 (98) 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
38 decision.
39 (109) The manager of the state insurance fund administrator may employ
40 legal counsel or obtain legal counsel through the attorney general concerning
41 all legal matters arising out of the existence and operation of the trust
42 fund, including claims made against the contracts of insurance issued by the
43 administrator of the trust fund.
44 (110) The manager of the state insurance fund administrator may also
45 employ such employees or contract for such services as are necessary to assist
46 in the administration of the trust fund, and all such administrative expenses
47 incurred by the state insurance fund for the benefit of the trust fund shall
48 be reimbursed 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 4. That Chapter 49, Title 41, Idaho Code, be, and the same is
54 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
9
1 ignated as Section 41-4904, Idaho Code, and to read as follows:
2 41-4904. BOARD OF TRUSTEES OF THE FUND. (1) The governor shall appoint
3 seven (7) persons to be the board of trustees of the Idaho petroleum clean
4 water trust fund. One (1) member shall be a member of the state senate, one
5 (1) member shall be a member of the state house of representatives, one (1)
6 member shall be a representative of the financial community with expertise in
7 the area of insurance, accounting or finance, one (1) member shall be an engi-
8 neer, geologist or similarly trained scientist with experience in environmen-
9 tal remediation, one (1) member shall be a wholesale distributor of petroleum
10 products who participates in the trust fund and has less than five million
11 (5,000,000) gallons in annual sales, one (1) member shall be a wholesale dis-
12 tributor of petroleum products who participates in the trust fund and has from
13 five million (5,000,000) to ten million (10,000,000) gallons in annual sales,
14 and one (1) member shall be a retailer of petroleum products who participates
15 in the trust fund and has more than ten million (10,000,000) gallons in annual
16 sales. The governor shall appoint a chairman from the seven (7) members. The
17 members shall be appointed for terms of four (4) years, except that all vacan-
18 cies shall be filled for the unexpired term, provided that the first two (2)
19 appointments the governor makes after the effective date of this act shall
20 serve a term of two (2) years and the other five (5) members shall serve a
21 term of four (4) years. Thereafter, a member shall serve a term of four (4)
22 years. A certificate of appointment shall be filed in the office of the secre-
23 tary of state. A majority of the members shall constitute a quorum for the
24 transaction of business or the exercise of any power or function of the Idaho
25 petroleum clean water trust fund and a majority vote of the members shall be
26 necessary for any action taken by the board of trustees. Members of the board
27 of trustees shall receive a compensation for service as prescribed in section
28 59-509(h), Idaho Code.
29 (2) The administrator of the fund shall be the state insurance fund
30 unless replaced by the board of trustees with another person. The administra-
31 tor shall serve at the pleasure of the board of trustees. The board of
32 trustees may appoint and employ such other persons as may be required by the
33 board and shall prescribe the duties and compensation of each such person.
34 (3) It shall be the duty of the board of trustees to direct the policies
35 and operation of the fund to assure that it is run as an efficient insurance
36 company, remains actuarially sound and maintains the public purposes for which
37 the Idaho petroleum clean water trust fund was created.
38 SECTION 5. That Section 41-4905, Idaho Code, be, and the same is hereby
39 amended to read as follows:
40 41-49056. LIMITS OF LIABILITY FOR CONTRACTS OF INSURANCE ISSUED BY THE
41 ADMINISTRATOR. (1) Contracts of insurance issued by the administrator shall
42 contain the following per occurrence and annual aggregate limits of liability
43 for paying the costs of corrective action and compensating third parties who
44 are legally entitled to receive compensation for bodily injury and property
45 damage arising out of accidental releases from covered petroleum storage
46 tanks:
47 (a) For owners or operators of heating tanks, farm tanks or residential
48 tanks, no more than one hundred thousand dollars ($100,000) per occurrence
49 and no more than one hundred thousand dollars ($100,000) annual aggregate;
50 (b) For nonmarketers of petroleum products who are owners or operators of
51 above ground and underground storage tanks and who consume ten thousand
52 (10,000) gallons or less of petroleum products each month, no more than
10
1 five hundred thousand dollars ($500,000) per occurrence and no more than
2 one million dollars ($1,000,000) annual aggregate;
3 (c) For owners or operators of one (1) to one hundred (100) covered
4 underground petroleum storage tanks, no more than one million dollars
5 ($1,000,000) per occurrence and no more than one million dollars
6 ($1,000,000) annual aggregate;
7 (d) For owners or operators of one hundred and one (101) or more covered
8 underground petroleum storage tanks, no more than one million dollars
9 ($1,000,000) per occurrence and no more than two million dollars
10 ($2,000,000) annual aggregate; and
11 (e) For owners or operators of covered above ground petroleum storage
12 tanks, no more than one million dollars ($1,000,000) per occurrence and no
13 more than one million dollars ($1,000,000) annual aggregate.
14 (2) Legal defense costs shall be disregarded for purposes of determining
15 whether the limits specified in subsection (1) of this section have been
16 reached.
17 (3) Benefits provided by the trust fund shall be primary and shall not be
18 construed to be excess over and above any other valid and collectible insur-
19 ance.
20 (4) If an owner or operator owns or operates more than one (1) of the
21 types of petroleum storage tanks listed in subsection (1) of this section,
22 then the limit of liability applicable to the type of petroleum storage tank
23 from which the accidental release occurred shall apply. In no event shall any
24 of the limits of liability in subsection (1) of this section be combined to
25 exceed the highest per occurrence and annual aggregate limits of liability for
26 any single category in subsections (1)(a) through (1)(e) of this section
27 applicable to an insured owner or operator.
28 SECTION 6. That Section 41-4906, Idaho Code, be, and the same is hereby
29 amended to read as follows:
30 41-49067. OWNER OR OPERATOR FINANCIAL RESPONSIBILITY. (1) The owner or
31 operator shall reimburse the trust fund for all dollars expended, excluding
32 legal defense costs, up to but not exceeding the following amounts:
33 (a) With respect to a heating tank - one hundred dollars ($100) per
34 annum;
35 (b) With respect to a farm tank or residential tank - two thousand dol-
36 lars ($2,000) per annum;
37 (c) With respect to an above ground storage tank or underground storage
38 tank, as defined in section 41-4903, Idaho Code - ten thousand dollars
39 ($10,000) per annum.
40 (2) Payments by the trust fund shall not be made contingent on prior pay-
41 ment of the reimbursement herein required.
42 SECTION 7. That Section 41-4907, Idaho Code, be, and the same is hereby
43 amended to read as follows:
44 41-49078. EXCLUSIVENESS OF REMEDY. If compensation is made from the trust
45 fund to a third party for property damage or personal injury, then that third
46 party shall not recover again for the damage actually compensated by the trust
47 fund pursuant to the collateral source doctrine or any other rule of law per-
48 mitting duplicate recovery.
49 SECTION 8. That Section 41-4908, Idaho Code, be, and the same is hereby
50 amended to read as follows:
11
1 41-49089. SOURCE OF TRUST FUND -- APPLICATION FEES -- APPLICATION FOR
2 ENROLLMENT -- TRANSFER FEES. (1) Every owner or operator of an underground
3 storage tank may, if he desires to apply to the trust fund to insure the
4 underground tank, make application for and pay into the trust fund an initial
5 application fee set by the administrator, but not to exceed twenty-five dol-
6 lars ($25.00) for each tank for which application for coverage is made.
7 (2) Every owner or operator of an aboveground storage tank may, if he
8 desires to apply to the trust fund to insure the aboveground tank, make appli-
9 cation for and pay into the trust fund an initial application fee set by the
10 administrator, but not to exceed twenty-five dollars ($25.00) for each tank
11 for which application for coverage is made.
12 (3) Every owner or operator of a farm tank or residential tank may, if he
13 desires to apply to the trust fund to insure the tank, make application for
14 and pay into the trust fund an initial application fee set by the administra-
15 tor, but not to exceed twenty-five dollars ($25.00) for each tank for which
16 application for coverage is made.
17 (4) Every owner or operator of a heating tank may, if he desires to apply
18 to the trust fund to insure the tank, make application for and pay into the
19 trust fund an initial application fee set by the administrator, but not to
20 exceed five dollars ($5.00) for each tank for which application for coverage
21 is made.
22 (5) The application for insurance shall be made to the administrator on
23 forms furnished and prescribed by him the administrator for the purpose of
24 eliciting reasonably available information as to the type and use of the stor-
25 age tank, the type of business enterprise of the tank owner or operator, the
26 age of the storage tank, the materials used in the construction of the tank
27 and the inside and outside protective coatings and other corrosion protective
28 measures, leak detection methods, spill and overfill prevention methods of the
29 tank, the location of the tank and its proximity to roads and buildings, the
30 foundation and type of material used as a bedding and fill for the tank, any
31 available inspection records of the tank including the gallons of petroleum
32 products entered into the tank and the gallon dispersements from the tank, and
33 other information that is reasonably prudent in order to obtain a sufficient
34 body of statistical data to determine the relative hazards of various catego-
35 ries of tanks, the potential that future leaks or discharges may occur, and
36 the conditions under which cleanup costs and personal injury and property dam-
37 age costs may occur and vary in the severity of the release and the resultant
38 costs to the trust fund.
39 (6) The administrator shall act upon the application for insurance with
40 all reasonable promptness, and he the administrator shall make such investiga-
41 tions of the applicant as he the administrator deems advisable to determine if
42 the information contained in the application for insurance is accurate and
43 complete. The administrator shall determine if the applicant's storage tanks
44 meet all the eligibility requirements and promptly notify the applicant of the
45 acceptance or nonacceptance of the application for insurance. The absence of
46 unknown data requested on the application shall not preclude an applicant's
47 acceptance for coverage by the trust fund, if the applicant is otherwise eli-
48 gible for insurance under this chapter.
49 (7) In addition to the application fees received by the trust fund pursu-
50 ant to this section, the trust fund shall receive the revenue produced by the
51 imposition of a "transfer fee" of one cent (1) per gallon on the delivery or
52 storage of all petroleum products as defined in subsection (24) of section
53 41-4903, Idaho Code, delivered or stored within the state of Idaho. This
54 transfer fee is hereby imposed upon the first licensed distributor who
55 receives, as receipt is determined in section 63-2403, Idaho Code, a petroleum
12
1 product within this state for the privilege of engaging in the delivery or
2 storage of petroleum products whose delivery or storage may present the danger
3 of a discharge into the environment and thus create the liability to be
4 funded. The fee imposed by this subsection shall not apply to: (a) petroleum
5 or petroleum products which are first delivered or stored in this state in a
6 container of fifty-five (55) gallons or less if such container is intended to
7 be transferred to the ultimate consumer of the petroleum or petroleum prod-
8 ucts; or (b) petroleum or petroleum products delivered or stored in this state
9 for the purpose of packaging or repackaging into containers of fifty-five (55)
10 gallons or less if such container is intended to be transferred to the ulti-
11 mate consumer of the petroleum or petroleum products.
12 (8) The transfer fee shall be collected by the commission on all petro-
13 leum products delivered or stored within this state after April 1, 1990. This
14 transfer fee shall be in addition to any excise tax imposed on motor fuel or
15 other petroleum products and shall be remitted to the commission with the
16 distributor's monthly report as required in section 63-2406, Idaho Code. The
17 distributor may deduct from his monthly report those gallons of petroleum
18 products returned to a licensed distributor's refinery or pipeline terminal
19 storage or exported from the state when supported by proper documents approved
20 by the commission. For the purpose of carrying out its duties under the provi-
21 sions of this chapter, the commission shall have the powers and duties pro-
22 vided in sections 63-3038, 63-3039, 63-3042 through 63-3066, 63-3068, 63-3071,
23 and 63-3074 through 63-3078, Idaho Code, which sections are incorporated by
24 reference herein as though set out verbatim.
25 (9) No person shall be excused from liability for any duty or fee imposed
26 in this chapter for failure to obtain a distributor's license.
27 (10) The director shall certify to the commission when the unencumbered
28 balance in the trust fund equals twenty-five million dollars ($25,000,000).
29 Effective the first day of the second month following the date of such certi-
30 fication, the imposition of the transfer fee shall be suspended. Thereafter,
31 the director shall certify to the commission when the unencumbered balance in
32 the trust fund equals fifteen million dollars ($15,000,000). Effective the
33 first day of the second month following the date of such certification, the
34 imposition of the transfer fee shall be reinitiated.
35 SECTION 9. That Section 41-4909, Idaho Code, be, and the same is hereby
36 amended to read as follows:
37 41-490910. DISTRIBUTION OF APPLICATION FEES AND TRANSFER FEES. (1) The
38 application fees and the transfer fees collected as provided in this chapter
39 shall be promptly remitted to the state treasurer for deposit in the Idaho
40 petroleum clean water trust fund. The transfer fees and accumulated interest
41 which accrued to the fund prior to August 3, 1995, shall remain in the fund.
42 The transfer fees and accumulated interest, which have been held in a separate
43 suspense account since August 3, 1995, shall be distributed as provided in
44 subsection (4) of this section. The transfer fees and accumulated interest
45 which accrue to the Idaho petroleum clean water trust fund subsequent to April
46 1, 1997, shall be distributed monthly thereafter as provided in subsection (5)
47 of this section.
48 (2) An amount of money equal to the actual cost of collecting, adminis-
49 tering and enforcing the transfer fee by the commission, as determined by it,
50 shall be retained by the commission. The amount retained by the commission
51 shall not exceed the amount authorized to be expended by appropriation by the
52 legislature. Any unencumbered balance in excess of the actual cost of collec-
53 tion, administering and enforcing the transfer fee requirements by the commis-
13
1 sion at the end of each fiscal year shall be remitted to the state treasurer
2 for deposit into the Idaho petroleum clean water trust fund.
3 (3) From the receipts of the transfer fee, an amount of money shall be
4 distributed to the state refund account established under section 63-3067,
5 Idaho Code, sufficient to reimburse that account for all current refund claims
6 under this chapter paid from that account. Any refunds due and owing from the
7 commission under this chapter shall be paid from the state refund account and
8 those moneys are hereby continuously appropriated for that purpose.
9 (4) For the distribution on April 1, 1997, the balance of the transfer
10 fees and accumulated interest accruing to the separate suspense account estab-
11 lished for such fees on August 3, 1995, which remain after distributing the
12 amounts specified in subsections (2) and (3) of this section, shall be dis-
13 tributed as follows:
14 (a) Twenty percent (20%) to the Idaho petroleum clean water trust fund
15 established in section 41-49045, Idaho Code;
16 (b) Three percent (3%) to the Idaho department of parks and recreation in
17 accordance with subparagraphs 1., 2., and 3. of paragraph (e), subsection
18 (1) of section 63-2412, Idaho Code; and
19 (c) The remainder shall be distributed:
20 (i) Six million dollars ($6,000,000) to the state highway account
21 for administration by the Idaho transportation department as provided
22 in section 41-490910A, Idaho Code; and
23 (ii) The balance remaining to the highway distribution account
24 established in section 40-701, Idaho Code.
25 (5) For the distribution at the end of fiscal year 1997 and monthly
26 thereafter, the balance of the transfer fees and accumulated interest accruing
27 to the Idaho petroleum clean water trust fund which remain after distributing
28 the amounts specified in subsections (2) and (3) of this section, shall be
29 distributed as follows:
30 (a) Seventy-seven percent (77%) to the highway distribution account
31 established in section 40-701, Idaho Code; and
32 (b) Three percent (3%) to the Idaho department of parks and recreation in
33 accordance with subparagraphs 1., 2., and 3. of paragraph (e), subsection
34 (1) of section 63-2412, Idaho Code.
35 SECTION 10. That Section 41-4909A, Idaho Code, be, and the same is hereby
36 amended to read as follows:
37 41-490910A. APPORTIONMENT OF MONEYS TRANSFERRED TO THE STATE HIGHWAY
38 ACCOUNT FROM THE IDAHO PETROLEUM CLEAN WATER TRUST FUND SUSPENSE ACCOUNT ON
39 APRIL 1, 1997. Of the moneys transferred to the state highway account pursuant
40 to the distribution in section 41-490910(4)(c)(i), Idaho Code, an amount not
41 to exceed six million dollars ($6,000,000) shall be administered by the Idaho
42 transportation department for use as the state and local match for federal
43 highway administration (FHWA) and federal emergency management agency (FEMA)
44 road and bridge projects. Such moneys shall be used exclusively for repair and
45 restoration of local and state roads and bridges damaged by the 1996, 1997 and
46 1998 natural disasters in the counties of Adams, Benewah, Bingham, Boise, Bon-
47 ner, Bonneville, Boundary, Butte, Clearwater, Custer, Elmore, Fremont, Gem,
48 Idaho, Jefferson, Kootenai, Latah, Lemhi, Lewis, Madison, Nez Perce, Owyhee,
49 Payette, Shoshone, Valley and Washington. When apportionment of moneys under
50 this section is sufficient to meet the purposes for which the moneys are des-
51 ignated, but not to exceed six million dollars ($6,000,000), any remaining
52 amounts shall be returned to the highway distribution account established in
53 section 40-701, Idaho Code.
14
1 SECTION 11. That Section 41-4910, Idaho Code, be, and the same is hereby
2 amended to read as follows:
3 41-49101. ISSUANCE OF CONTRACTS OF INSURANCE BY THE ADMINISTRATOR OF THE
4 IDAHO PETROLEUM CLEAN WATER TRUST FUND -- DEFERRAL. (1) The administrator may
5 issue a contract of insurance to an owner or operator of a petroleum storage
6 tank that, based upon a consideration of the owner or operator's application
7 for insurance and appropriate investigation by the administrator, meets the
8 eligibility provisions of this chapter and the underwriting requirements
9 established by the administrator.
10 (2) The administrator may defer issuing contracts of insurance to certain
11 categories of petroleum storage tank owners or operators if necessary for the
12 sound operation of the trust fund.
13 (3) The administrator shall consider the following factors in determining
14 whether to defer the issuance of contracts of insurance to any category of
15 petroleum storage tank owners or operators:
16 (a) The underwriting capacity of the trust fund;
17 (b) Any requirement of federal or state law or regulation imposed on any
18 category of petroleum storage tank owners or operators to demonstrate
19 financial responsibility for corrective action and compensation to third
20 parties for bodily injury and property damage arising from accidental
21 releases from petroleum storage tanks;
22 (c) The ability of the administrator to process insurance applications
23 from different categories of petroleum storage tank owners or operators.
24 (4) Any decision by the administrator to defer issuing contracts of
25 insurance to any category of petroleum storage tank owners or operators shall
26 be documented in the plan of operation, or an amendment thereto, submitted to
27 the director of the department of insurance pursuant to sections 41-49245 or
28 41-49245A, Idaho Code, and subject to the director's approval.
29 (5) The administrator may issue contracts of insurance to deferred cate-
30 gories of petroleum storage tank owners or operators when the need for defer-
31 ral documented in subsection (4) of this section no longer exists, as demon-
32 strated by an amendment to the plan of operation submitted to and approved by
33 the director of the department of insurance pursuant to section 41-49245A,
34 Idaho Code.
35 SECTION 12. That Section 41-4910A, Idaho Code, be, and the same is hereby
36 amended to read as follows:
37 41-49101A. PROVISIONS OF CONTRACTS OF INSURANCE -- RENEWAL. (1) The con-
38 tracts of insurance issued by the administrator shall meet the requirements of
39 this chapter. To the extent consistent with this chapter, the contracts of
40 insurance shall also satisfy the provisions of any requirement imposed by fed-
41 eral or state law or regulation on any category of petroleum storage tank
42 owners or operators to demonstrate financial responsibility for corrective
43 action and compensation to third parties for bodily injury and property damage
44 arising from accidental releases from petroleum storage tanks.
45 (2) Upon receipt of an annual application fee not exceeding twenty-five
46 dollars ($25.00) for each aboveground tank, underground tank, farm tank or
47 residential tank, or not to exceed five dollars ($5.00) for each heating tank
48 covered by a contract of insurance, and upon receipt of evidence that the
49 petroleum storage tanks continue to meet the eligibility provisions of this
50 chapter and the underwriting requirements established by the administrator,
51 the administrator shall issue an annual renewal of the contract of insurance
52 to the owner or operator of said petroleum storage tanks.
15
1 SECTION 13. That Section 41-4911, Idaho Code, be, and the same is hereby
2 amended to read as follows:
3 41-49112. STORAGE TANKS ELIGIBLE FOR INSURANCE. (1) Eligible storage
4 tanks are those tanks that meet all of the following criteria:
5 (a) Appropriate fees required in section 41-49089, Idaho Code, or section
6 41-49101A, Idaho Code, have been paid;
7 (b) The tank, if an underground storage tank, is in compliance with
8 applicable federal and state underground storage tank rules and regula-
9 tions;
10 (c) The tank is used only for storage of petroleum products;
11 (d) The tank, if an underground storage tank, passes a tank tightness
12 test;
13 (e) The tank, if an aboveground storage tank, is in compliance with state
14 and federal rules and regulations including the international fire code.
15 If an aboveground tank is exempt from state or federal rules and regula-
16 tions and/or the international fire code by virtue of its being installed
17 prior to the effective date of such rules and regulations or the interna-
18 tional fire code, such tank is not eligible unless it passes a tank tight-
19 ness test;
20 (f) The tank, if a farm tank or residential tank, is in compliance with
21 any applicable state or federal rules and regulations;
22 (g) Any contamination caused by or released by or from the tank has been
23 cleaned up, or a plan for cleanup or removal approved by the Idaho depart-
24 ment of environmental quality, is being implemented; provided, however,
25 that the trust fund shall not pay for any costs associated with prior con-
26 tamination.
27 (2) Any tank which is a part of a refiner's terminal or a tank directly
28 supplied by a pipeline shall not be eligible.
29 SECTION 14. That Section 41-4911A, Idaho Code, be, and the same is hereby
30 amended to read as follows:
31 41-49112A. STORAGE TANKS LOCATED ON SITES WHERE CONTAMINATION IS PRESENT.
32 (1) Notwithstanding the provisions of section 41-49112(1)(g), Idaho Code, an
33 owner or operator of a petroleum storage tank or tanks located on a site where
34 contamination is present may be eligible for insurance covering the petroleum
35 storage tanks located on that site if the contamination does not pose a threat
36 to public health, safety or the environment, or was not caused by or released
37 by or from the tank, or if multiple tanks are present on the site, any one (1)
38 of the tanks, for which insurance coverage is sought; provided, however, that
39 the trust fund shall not pay for any corrective action costs or compensation
40 to third parties for bodily injury or property damage arising from the prior
41 contamination present at the site.
42 (2) Any contamination caused by or released by or from the tank or tanks
43 which may migrate off-site; contaminate ground water; exceed federal or state
44 standards, guidelines, criteria or contaminant levels for ground water or
45 drinking water; or pose a fire, explosion or safety hazard may be deemed by
46 the administrator to present a threat to public health, safety or the environ-
47 ment. An owner or operator of such petroleum storage tank or tanks will not be
48 eligible for insurance covering the petroleum storage tanks located on that
49 site unless the contamination has been cleaned up or a plan for cleanup or
50 removal approved pursuant to section 41-49112(1)(g), Idaho Code, is being
51 implemented.
52 (3) Contracts of insurance issued to an owner or operator of a petroleum
16
1 storage tank located on a site where contamination is present and where the
2 administrator has determined that the contamination does not pose a threat to
3 public health, safety or the environment, or was not caused by or released by
4 or from the tank or tanks shall exclude from coverage corrective action costs
5 and compensation to third parties for bodily injury or property damage arising
6 out of the prior contamination present at the site.
7 SECTION 15. That Section 41-4912, Idaho Code, be, and the same is hereby
8 amended to read as follows:
9 41-49123. STATE TREASURER CUSTODIAN OF TRUST FUND -- DUTIES. The state
10 treasurer shall be the custodian of the trust fund balance.
11 SECTION 16. That Section 41-4913, Idaho Code, be, and the same is hereby
12 amended to read as follows:
13 41-49134. DEPOSIT AND INVESTMENT OF FUNDS -- INTEREST. The state trea-
14 surer shall deposit or, on order of the administrator of the trust fund,
15 invest any portion of the Idaho petroleum clean water trust fund not needed
16 for immediate or currently anticipated use, in the manner provided by law.
17 Interest earned by such invested portion of the trust fund shall be collected
18 by the state treasurer and placed to the credit of the trust fund.
19 SECTION 17. That Section 41-4914, Idaho Code, be, and the same is hereby
20 amended to read as follows:
21 41-49145. PERPETUAL APPROPRIATION. All moneys which may come into the
22 Idaho petroleum clean water trust fund are hereby perpetually appropriated to
23 the manager of the state insurance trust fund as trustee to be expended by him
24 for the purposes of this chapter.
25 SECTION 18. That Section 41-4915, Idaho Code, be, and the same is hereby
26 amended to read as follows:
27 41-49156. ENROLLED SUBSCRIBERS' LIABILITY ON JUDGMENT. (1) No action
28 shall lie against any owner or operator of a tank insured by the Idaho petro-
29 leum clean water trust fund upon any obligation claimed against this trust
30 fund until a final judgment has been obtained against this trust fund and
31 remains unsatisfied for thirty (30) days.
32 (2) Any such judgment shall be binding upon each owner or operator only
33 in such proportion as his interests may appear and in an amount not exceeding
34 his contingent liability, if any, in excess of the amount of insurance pro-
35 vided by the trust fund.
36 SECTION 19. That Section 41-4916, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 41-49167. ACTIONS FOR COLLECTION IN CASE OF DEFAULT -- PENALTY -- CANCEL-
39 LATION OF INSURANCE CONTRACT. (1) If an insured owner or operator of a storage
40 tank shall default in any reimbursement required to be made by the insured to
41 the trust fund under section 41-49067, Idaho Code, the amount due from the
42 insured may be collected by civil action against him in the name of the admin-
43 istrator, and the same, when collected by the administrator shall be paid into
44 the trust fund, and such insured's compliance with the provisions of this
45 chapter requiring payment to be made to the trust fund shall date from the
17
1 time the money is collected by the administrator.
2 (2) The contract of insurance held by an insured owner or operator of a
3 storage tank which fails to comply with section 41-49112, Idaho Code, or who
4 is in default in his enrollment fees for more than thirty (30) days may be
5 cancelled canceled at the discretion of the administrator.
6 SECTION 20. That Section 41-4917, Idaho Code, be, and the same is hereby
7 amended to read as follows:
8 41-49178. CANCELLATION OF INSURANCE. Any insured owner or operator of a
9 storage tank may cancel his insurance by returning his insurance contract to
10 the administrator for cancellation. There shall be no refund of any applica-
11 tion fees paid to the trust fund as all such fees shall be deemed fully earned
12 when an insurance contract is issued or renewed.
13 SECTION 21. That Section 41-4918, Idaho Code, be, and the same is hereby
14 amended to read as follows:
15 41-49189. REINSURANCE. (1) The administrator of the trust fund may rein-
16 sure any risk, or any part thereof, and may enter into agreements of reinsur-
17 ance in the same way and to the same extent as other insurance carriers, the
18 cost of which shall be paid out of the trust fund balance.
19 (2) Such reinsurance contracts may be on a specific excess basis for each
20 liability loss sustained, or on a quota share basis of each liability loss
21 sustained, or on a treaty basis wherein a line of credit is available to pay
22 losses in excess of a given amount with the money obtained from such a loan
23 arrangement to be paid back only from expendable surplus funds, or on a facul-
24 tative basis with one (1) or more reinsurers whereby successive portions of
25 the loss are paid on a given share basis, and/or on a net annual aggregate
26 stop loss basis whereby the reinsurer must contribute to all losses when such
27 losses exceed a given amount in any policy year, or any other reinsurance
28 agreement found to be necessary, prudent and reasonable by competent actuar-
29 ies.
30 SECTION 22. That Section 41-4919, Idaho Code, be, and the same is hereby
31 amended to read as follows:
32 41-491920. PAYMENTS FROM THE TRUST FUND BY STATE TREASURER. The manager
33 of the state insurance fund as trustee administrator of the trust fund shall,
34 in the management contract with the state insurance fund, require the state
35 insurance fund to submit each month to the state board of examiners an esti-
36 mate of the amount necessary to meet the current disbursements for liability
37 insurance losses to be paid in behalf of insured owners or operators of the
38 trust fund during each succeeding calendar month, and when such estimate shall
39 be approved by the state board of examiners, the state treasurer is authorized
40 to pay the same out of the fund upon sight drafts drawn by the administrator.
41 At the end of each calendar month the administrator shall account to the state
42 board of examiners and the trustee board for all money so received, furnishing
43 proper vouchers therefor.
44 SECTION 23. That Section 41-4920, Idaho Code, be, and the same is hereby
45 amended to read as follows:
46 41-49201. RESERVE FUNDS. The Idaho petroleum clean water trust fund shall
47 establish and maintain the following reserves or financial resources, which
18
1 shall constitute liabilities in any determination of the financial condition
2 of the trust fund:
3 (1) An amount sufficient for the payment of all claims made against the
4 trust fund, which shall include reasonable estimates for claim adjustment
5 expense, legal fees and other claim settlement costs, and including claims
6 reported and not yet paid and claims incurred but not reported to the trust
7 fund but only to the extent that a reasonable estimate can be made based on
8 prior statistical evidence and the condition of storage tanks insured by the
9 trust fund.
10 (2) An amount adequate under reasonable estimates for the payment of any
11 unpaid contractual obligations, taxes and any other services and expenses
12 incurred but not paid.
13 SECTION 24. That Section 41-4921, Idaho Code, be, and the same is hereby
14 amended to read as follows:
15 41-49212. PLAN OF OPERATION. The administrator shall establish a plan of
16 operation to be approved by the director of the department of insurance for
17 the state of Idaho.
18 SECTION 25. That Section 41-4922, Idaho Code, be, and the same is hereby
19 amended to read as follows:
20 41-49223. REGISTRATION OF THE TRUST FUND. The trust fund established pur-
21 suant to the provisions of this chapter shall be registered with the director
22 as set out in this chapter.
23 SECTION 26. That Section 41-4923, Idaho Code, be, and the same is hereby
24 amended to read as follows:
25 41-49234. QUALIFICATIONS FOR REGISTRATION. The director shall not regis-
26 ter the trust fund if it is not qualified therefor. To be qualified, the trust
27 fund:
28 (1) Shall require all application fees to be paid in advance and to be
29 deposited in and disbursed from the trust fund duly created under this chap-
30 ter.
31 (2) Shall have, or provide for, a trustworthy and responsible administra-
32 tor for competent administration of the trust fund and plan.
33 (3) Shall provide that the administrator or trustee on behalf of the
34 trust fund, as the case may be, furnish to each insured owner or operator a
35 contract of insurance adequately and clearly stating all rights and obliga-
36 tions of the insured owner or operator, together with all applicable restric-
37 tions, limitations and exclusions, and the procedure for filing a claim.
38 (4) Shall be actuarially sound; that is, assets, income and other finan-
39 cial resources of the trust fund must be adequate under reasonable estimates
40 for payment of all claims, claims adjustment expenses, taxes, expenses and
41 other obligations.
42 (5) Shall otherwise be in compliance with the provisions of this chapter.
43 SECTION 27. That Section 41-4924, Idaho Code, be, and the same is hereby
44 amended to read as follows:
45 41-49245. APPLICATION FOR REGISTRATION -- FEE. (1) Application for regis-
46 tration of the trust fund shall be made to the director, on forms furnished
47 and designed by him for the purpose of eliciting information as to whether the
19
1 trust fund is qualified for registration. The application shall be signed and
2 verified by the trustee board.
3 (2) The application shall be accompanied by:
4 (a) A copy of the bylaws of the trust fund referred to in section
5 41-493027, Idaho Code;
6 (b) A copy of the proposed contract of insurance;
7 (c) A written plan of operation that outlines the reasonably projected
8 income and disbursements of the trust fund for the twelve (12) month
9 period commencing with date of application and showing also the amount
10 reserved and financial resources available as of the end of such period
11 for claims incurred and not paid or incurred and not reported;
12 (d) A current certified audited financial statement;
13 (e) Such other relevant documentation and information as the director may
14 reasonably require.
15 (3) A nonrefundable filing fee of twenty-five dollars ($25.00) shall be
16 paid to the director at the time the application is filed.
17 SECTION 28. That Section 41-4924A, Idaho Code, be, and the same is hereby
18 amended to read as follows:
19 41-49245A. AMENDMENTS TO PLAN OF OPERATION. (1) Any amendment to the plan
20 of operation prepared by the administrator for the purpose of deferring the
21 issuance of contracts of insurance to any category of petroleum storage tank
22 owners or operators or for issuing contracts of insurance to any deferred cat-
23 egory of petroleum storage tank owners or operators shall be submitted to the
24 director of the department of insurance.
25 (2) The director shall review the amendment and shall, with all reason-
26 able promptness, approve, approve as modified, or disapprove of the amendment
27 to the plan of operation. If the amendment is approved, the administrator may
28 issue contracts of insurance and otherwise operate the trust fund in a manner
29 consistent with the amended plan of operation. If the amendment is disap-
30 proved, the administrator must operate the trust fund in a manner consistent
31 with the provisions of the plan of operation as submitted to the director in
32 the trust fund's application for registration under section 41-49245, Idaho
33 Code.
34 (3) The director may request such relevant documentation and information,
35 including an actuarial analysis of the underwriting capacity of the trust
36 fund, as is reasonably necessary to evaluate the proposed amendment to the
37 plan of operation.
38 (4) All procedures and policies concerning the approval, modification or
39 disapproval of any amendment to the plan of operation are subject to the pro-
40 visions of chapter 52, title 67, Idaho Code, as well as the rules of practice
41 and procedure of the department of insurance.
42 SECTION 29. That Section 41-4926, Idaho Code, be, and the same is hereby
43 repealed.
44 SECTION 30. That Section 41-4925, Idaho Code, be, and the same is hereby
45 amended to read as follows:
46 41-49256. GRANT OR DENIAL OF REGISTRATION. (1) The director shall act
47 upon an application for registration of the trust fund with all reasonable
48 promptness. He may make such investigation of the proposal as he deems advis-
49 able. If the director finds that the application is complete and that the plan
50 meets the qualifications stated in section 41-49234, Idaho Code, he shall
20
1 issue and deliver a certificate of registration in appropriate form to the
2 applicant; otherwise, the director shall refuse to register the plan and shall
3 give written notice of such refusal to the applicant, stating the reasons
4 therefor.
5 (2) All procedures and policies concerning the grant or denial of regis-
6 tration of the trust fund are subject to the provisions of chapter 52, title
7 67, Idaho Code, as well as the rules of practice and procedure of the depart-
8 ment of insurance.
9 SECTION 31. That Section 41-4930, Idaho Code, be, and the same is hereby
10 amended to read as follows:
11 41-493027. BYLAWS OF THE FUND. The manager of the state insurance fund,
12 as trustee of the trust fund, board shall adopt original bylaws subject to the
13 approval of the director, who shall grant his approval only after his determi-
14 nation that the provisions in the bylaws are not inconsistent nor contrary to
15 the applicable provisions of title 41, Idaho Code, as amended in this chapter.
16 These bylaws shall outline the organizational structure of the trust fund, its
17 operational methods of complying with the provisions of this chapter, includ-
18 ing the deposit, custody, disbursement and accounting for the moneys in the
19 trust fund, fidelity bonds, if any, required of the administrator, and the
20 manager of the state insurance fund as trustee of the trust fund who is also
21 under contract to administer the operations of the trust fund, the essential
22 elements of the managerial contract with the state insurance fund administra-
23 tor, the powers and duties of the administrator of the trust fund, the rights,
24 privileges and responsibilities of insured owners or operators of storage
25 tanks, the manner in which annual and special meetings of the trustee board
26 shall be conducted, and such other matters as may be customary, necessary or
27 convenient for the management and operation of the trust fund.
28 SECTION 32. That Section 41-4931, Idaho Code, be, and the same is hereby
29 amended to read as follows:
30 41-493128. RECORDS AND ACCOUNTS -- ANNUAL STATEMENT. (1) The manager of
31 the state insurance fund, as trustee of the Idaho petroleum clean water trust
32 fund, administrator shall cause full and accurate records and accounts to be
33 entered and maintained covering all financial transactions and affairs of the
34 trust fund.
35 (2) Within sixty (60) days after the close of each calendar year, the
36 manager of the state insurance fund, as trustee, administrator shall make an
37 annual statement in writing summarizing the financial transactions of the
38 trust fund for such prior calendar year and its financial condition at the end
39 of such year in accordance with this chapter and generally accepted and appli-
40 cable accounting principles. The statement shall otherwise be in the form pre-
41 scribed and shall provide the information required by the director of the
42 department of insurance of the state of Idaho, and the financial information
43 contained therein shall be certified by the accountant by whom such informa-
44 tion was prepared and audited.
45 (3) On or before the expiration of such sixty (60) day period the manager
46 of the state insurance fund, as trustee, administrator shall cause an original
47 of the annual statement to be filed with the director, and shall pay any fil-
48 ing fee required by the director or any other state agency having jurisdic-
49 tion. At an appropriate time, consistent with the usual practices of the
50 director, the director shall declare the annual statement to be open to the
51 scrutiny of all interested parties and the public in general.
21
1 SECTION 33. That Section 41-4932, Idaho Code, be, and the same is hereby
2 amended to read as follows:
3 41-493229. EXCLUSIVE MANAGEMENT CONTRACT WITH THE MANAGER OF THE STATE
4 INSURANCE FUND ADMINISTRATOR -- MANDATORY PROVISIONS. (1) The management con-
5 tract entered into between the manager of the state insurance fund as trustee
6 of the trust fund administrator and the state insurance fund, board as
7 required in this chapter, shall not become effective unless the contract is
8 filed with and approved by the director. The contract shall be deemed approved
9 unless disapproved by the director within twenty (20) days after date of fil-
10 ing, subject to such reasonable extension of time as the director may require
11 by notice given within the twenty (20) day period. Any disapproval shall be
12 delivered to the trustee administrator in writing, stating the grounds there-
13 for.
14 (2) Any such contract, or contract holder, shall provide that the manager
15 of the state insurance fund, as trustee administrator shall, within ninety
16 (90) days after expiration of each calendar year, furnish the director a writ-
17 ten statement of amounts received under or on account of the contract and
18 amounts expended thereunder during such calendar year, including the emolu-
19 ments received therefrom by the principal management personnel of the state
20 insurance fund administrator involved with the affairs of the trust fund, and
21 with such classification of items and further detail as the director may rea-
22 sonably require.
23 (3) The director shall disapprove any such contract if he finds that it:
24 (a) Subjects the trust fund to unreasonable or excessive charges; or
25 (b) Does not contain fair and adequate standards of performance; or
26 (c) Contains other inequitable provisions which impair the proper inter-
27 ests of the owners or operators insured by the trust fund.
28 (4) The director may, after a hearing held thereon, withdraw his approval
29 of any such contract theretofore approved by him, if he finds that the basis
30 of his original approval no longer exists, or that the contract has, in actual
31 operation, shown itself to be subject to disapproval on any of the grounds
32 referred to in subsection (3) of this section.
33 SECTION 34. That Section 41-4933, Idaho Code, be, and the same is hereby
34 amended to read as follows:
35 41-49330. EXISTING INSURANCE LAWS TO APPLY TO THE TRUST FUND WITH CERTAIN
36 EXCEPTIONS. The trust fund shall comply with all of the applicable provisions
37 of title 41, Idaho Code, with certain exceptions as follows:
38 (1) The creation of the trust fund by act of the legislature shall not be
39 deemed to be an ownership, control or operation of an insurer by a governmen-
40 tal entity, as referred to in section 41-309, Idaho Code, and the surplus
41 funds of the trust fund shall be considered to be dedicated and held in
42 reserve for the purpose of providing funds for the payment of claims arising
43 out of the discharge of petroleum products from tanks covered by a contract of
44 insurance issued to the tank owner or operator by the trust fund as provided
45 for in section 41-49056, Idaho Code. The absolute control of the trust fund
46 shall be vested in the manager of the state insurance fund as trustee board.
47 (2) The provisions of this chapter shall be construed to be contained in
48 the document of organization and bylaws of the trust fund for purposes of sec-
49 tions 41-319, 41-320 and 41-322, Idaho Code, and the director shall issue a
50 certificate of registration to and in the name of the trust fund upon his
51 finding that it has met all other appropriate provisions of the Idaho Code,
52 including sections 41-313, 41-316 and 41-316A, Idaho Code.
22
1 (3) Section 41-337, Idaho Code, shall not apply to contracts of insurance
2 issued by the trust fund.
3 (4) Sections 41-1004 and 41-1022, Idaho Code, shall not apply to employ-
4 ees of the state insurance fund or the trust fund.
5 (5) Section 41-1103, Idaho Code, shall not apply to employees of the
6 state insurance fund or the trust fund, provided the employees restrict their
7 claims adjusting and investigation operations only to those contracts issued
8 by the trust fund.
9 (6) Except as otherwise provided in this chapter, chapter 28, title 41,
10 Idaho Code, and chapter 14, title 30, Idaho Code, shall not apply to the trust
11 fund nor shall this trust fund be construed to be a domestic mutual insurer,
12 nor a reciprocal insurer, nor any other type of insurer currently regulated by
13 title 41, Idaho Code, and the only organizational requirements of this trust
14 fund shall be those enumerated in this chapter.
15 SECTION 35. That Section 41-4934, Idaho Code, be, and the same is hereby
16 amended to read as follows:
17 41-49341. TAXES. (1) The trust fund shall not be subject to chapter 4,
18 title 41, Idaho Code, as it pertains to premium tax.
19 (2) The state of Idaho hereby preempts the field of imposing excise,
20 privilege, franchise, income, license and similar taxes, licenses and fees
21 upon the trust fund; and no county, city, municipality, district, school dis-
22 trict, or other political subdivision or agency of Idaho shall levy upon this
23 trust fund any such tax, license or fee.
24 SECTION 36. That Section 41-4935, Idaho Code, be, and the same is hereby
25 amended to read as follows:
26 41-49352. EXAMINATION OF BOOKS, RECORDS AND ACCOUNTS. (1) The books,
27 records, accounts and affairs of the trust fund shall be subject to examina-
28 tion by the director by competent examiners duly authorized by him in writing,
29 at such times or intervals as the director deems advisable. The purposes of
30 the examination shall be to determine compliance of the trust fund with appli-
31 cable laws, the financial condition and actuarial adequacy of the trust fund,
32 and other factors materially related to the trust fund's management and opera-
33 tion.
34 (2) The manager, as trustee, administrator shall make the books, records
35 and accounts of the trust fund available to the examiner and otherwise facili-
36 tate the examination.
37 (3) The examiner shall conduct the examination expeditiously, make his
38 report of the examination in writing, and deliver a copy thereof to the
39 trustee administrator and the director. The manager, as trustee, administrator
40 shall have two (2) weeks after receipt of the report within which to recommend
41 to the director such corrections or changes therein as the manager, as
42 trustee, administrator may deem appropriate. After making such corrections or
43 changes, if any, as he deems proper, the director shall file the report in his
44 office as a document open to public inspection, and deliver to the manager, as
45 trustee, administrator a copy of the report as so corrected or changed.
46 (4) At the direction of the director, the costs of the examination shall
47 be borne by the trust fund in accordance with section 41-228, Idaho Code.
48 SECTION 37. That Section 41-4936, Idaho Code, be, and the same is hereby
49 amended to read as follows:
23
1 41-49363. TRUSTEE -- ADMINISTRATOR -- FIDELITY BONDS. The manager of the
2 state insurance fund as trustee administrator shall cause all individuals
3 handling receipts and disbursements for the trust fund to be bonded at all
4 times under a fidelity bond issued by a surety insurer authorized to transact
5 such insurance in this state. The bond shall be in favor of the trust fund and
6 for such aggregate penalty amount, not less than twenty-five thousand dollars
7 ($25,000), as the director may deem reasonably advisable in relation to the
8 amount of funds to be so handled. The bond shall be noncancellable noncancel-
9 able except upon not less than thirty (30) days advance notice in writing to
10 the manager, as trustee, administrator and the director. The cost of the bond
11 shall be borne by the trust fund.
12 SECTION 38. That Section 41-4937, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 41-49374. PROHIBITED PECUNIARY INTERESTS IN PLAN MANAGEMENT. (1) Neither
15 the manager, as trustee, nor the administrator, nor any other person having
16 responsibility for the management of the trust fund or the investment or other
17 handling of the trust fund moneys or assets shall:
18 (a) Receive directly or indirectly or be pecuniarily interested in any
19 fee, commission, compensation or emolument, other than salary or other
20 similar compensation regularly fixed and allowed for services regularly
21 rendered to the trust fund, arising out of any transaction to which the
22 trust fund is or is to be a party;
23 (b) Receive compensation as a consultant to the trust fund while also
24 acting as a trustee or administrator, or as an employee of either;
25 (c) Have any direct or indirect material pecuniary interest in any loan
26 or investment of the trust fund.
27 (2) The director may, after reasonable notice and a hearing, prohibit the
28 manager as the trustee administrator from employing or retaining or continuing
29 to employ or retain any person in the administration of the trust fund upon
30 finding that such employment or retention involves a conflict of interest not
31 in the best interests of the trust fund or adversely affecting the interests
32 of the owners or operators insured by the trust fund.
33 SECTION 39. That Section 41-4938, Idaho Code, be, and the same is hereby
34 amended to read as follows:
35 41-49385. POLITICAL CONTRIBUTIONS PROHIBITED. The manager, as trustee,
36 administrator shall not make or knowingly permit the making, directly or indi-
37 rectly, of any political contribution by or from the trust fund.
38 SECTION 40. That Section 41-4939, Idaho Code, be, and the same is hereby
39 amended to read as follows:
40 41-49396. RECOVERY OF DEPLETED FUNDS. If after notice and hearing, the
41 director finds that the trust fund has been depleted by reason of any wrongful
42 or negligent act or omission of the trustee board or any other person, he
43 shall transmit a copy of his findings to the attorney general of this state,
44 who may bring an action in the name of the people of this state, or intervene
45 in any action brought by or on behalf of an insured owner or operator for the
46 recovery of the amount of such depletion, for the benefit of the trust fund.
47 SECTION 41. That Section 41-4940, Idaho Code, be, and the same is hereby
48 amended to read as follows:
24
1 41-494037. IMPAIRED TRUST FUND. (1) If the assets of the trust fund are
2 at any time insufficient to discharge its liabilities, and to maintain the
3 required surplus, the administrator shall forthwith request authority from the
4 director to make up the deficiency by borrowed surplus or other subordinated
5 indebtedness.
6 (2) If the director finds that future estimated revenues from the trans-
7 fer fees imposed under section 41-49089, Idaho Code, are not sufficient to
8 justify any borrowed surplus funds or other subordinated indebtedness, then
9 the director shall request the administrator to submit a plan of action
10 whereby priority is given to the payment of cleanup costs of petroleum dis-
11 charges that constitute a clear and present danger to persons or property,
12 including discharges into underground or surface water that may seriously con-
13 taminate the water used for domestic and commercial use, agricultural prod-
14 ucts, livestock, fish, game and other wildlife. Consideration shall be given
15 in this plan of action to establishing a claim payment priority based on the
16 severity of the contamination, the possible endangerment of life and health
17 including, but not limited to, possible toxic fumes, fire and explosion haz-
18 ards, economic impact, population density, and the need for immediate cleanup
19 action versus action that can be delayed with only minimal adverse effects.
20 This plan of action shall also establish similar criteria for the
21 prioritization of the payment of bodily injury and property damage claims.
22 (3) Upon receiving this plan of action, the director shall promptly hold
23 a public hearing with appropriate notice to determine any possible adverse
24 effects of the plan of action on the owners or operators of insured tanks, the
25 claimants and potential claimants, and the environment. After giving due con-
26 sideration to the testimony of those parties affected by the proposed plan of
27 action, the director shall either approve or disapprove the plan in writing,
28 stating the reasons therefor, so that a plan of action that does meet with the
29 director's approval can be placed into effect with due diligence and dispatch.
30 (4) Upon receiving the director's approval of the plan of action, the
31 administrator shall promptly commence the prioritization of claims and pay
32 such valid and compensable claims according to this priority as funds become
33 available from collection of the transfer fees.
34 SECTION 42. That Section 41-4941, Idaho Code, be, and the same is hereby
35 amended to read as follows:
36 41-494138. LIQUIDATION OF TRUST FUND. (1) The annual tank application
37 fees and transfer fees are perpetually appropriated as dedicated funds for the
38 purposes of this chapter, and the trust fund shall remain in existence as long
39 as the need exists for the trust fund to insure the costs of corrective
40 actions and the need exists for the trust fund to insure the legal liability
41 of petroleum tank owners and operators as provided in this chapter.
42 (2) In the event other more appropriate means come into existence to pro-
43 vide the insurance provided by the trust fund, then the trust fund shall be
44 liquidated according to the provisions of this section.
45 (3) Liquidation shall be conducted by the trustee board under a written
46 plan of liquidation filed with and approved by the director. If the director
47 finds the plan to be fair and equitable to all persons having a pecuniary
48 interest in the trust fund, he shall approve it. Any balance remaining after
49 payment or adequate provision for payment of all claims and charges against
50 the trust fund has been made shall be disposed of in the manner provided for
51 in the plan of liquidation. Unless under the plan of liquidation the liability
52 for all unpaid claims and obligations of the trust fund has been assumed by
53 another financially responsible person or persons, the existence of surplus
25
1 funds for such disposition shall not be determined prior to the expiration of
2 two (2) years after termination of the certificate of registration issued to
3 the trust fund as provided in section 41-49330(2), Idaho Code.
4 (4) After its approval by the director, the plan of liquidation for the
5 trust fund shall be binding upon all persons pecuniarily interested in the
6 trust fund. Pending the effectuation of the plan of liquidation the director
7 may impose such prohibitions or restrictions upon disbursement or use of trust
8 fund moneys as the director deems advisable for the protection of all inter-
9 ested persons.
10 (5) If the trust fund is then insolvent and a plan of liquidation thereof
11 satisfactory to the director as being fair and equitable is not filed within
12 sixty (60) days after the effective date of termination of the plan's regis-
13 tration, or if liquidation of a solvent trust fund is not being carried out in
14 accordance with the plan of liquidation theretofore approved by the director,
15 the director shall liquidate the trust fund under the applicable provisions of
16 chapter 33, title 41, Idaho Code, and for this purpose the trust fund shall be
17 deemed to be an insolvent domestic insurer.
18 (6) If after all indebtedness and other obligations of the trust fund are
19 discharged to the satisfaction of the director and the trust fund is dis-
20 solved, its remaining assets, if any, shall inure to the benefit of the state.
21 SECTION 43. That Section 41-4942, Idaho Code, be, and the same is hereby
22 amended to read as follows:
23 41-494239. VOUCHERS FOR EXPENDITURES. (1) The administrator of the trust
24 fund, under the direction of the manager, shall not make any disbursement of
25 twenty-five dollars ($25.00) or more, unless evidenced by a voucher or other
26 document correctly describing the consideration for the payment and supported
27 by a check or receipt endorsed or signed by or on behalf of the person receiv-
28 ing the money.
29 (2) If the disbursement is for services and reimbursement, the voucher or
30 other document, or some other writing referred to therein, shall describe the
31 services and itemize the expenditures.
32 (3) If the disbursement is in connection with any matter pending before
33 any legislature or public body or before any public official, the voucher or
34 other document shall also correctly describe the nature of the matter and of
35 the trust fund's interest therein.
36 SECTION 44. That Section 41-4943, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 41-49430. BORROWED SURPLUS AND SUBORDINATED INDEBTEDNESS. (1) The trust
39 fund may borrow money to defray the expenses of its organization, provide it
40 with surplus funds, or for any purpose of its business, upon a written agree-
41 ment that such money is required to be repaid only out of the trust fund's
42 surplus in excess of the amount stipulated in such agreement. The agreement
43 may provide for interest, which interest shall or shall not constitute a lia-
44 bility of the insurer as to its funds other than such excess or surplus, as
45 stipulated in the agreement. No commission or promotion expense shall be paid
46 in connection with any such loan.
47 (2) Money so borrowed, together with the interest thereon, if so stipu-
48 lated in the agreement, shall not form a part of the fund's legal liabilities
49 except as to its surplus in excess of the amount thereof stipulated in the
50 agreement, or be the basis of any setoff, but until repaid, financial state-
51 ments filed or published by the insurer shall show as a footnote thereto the
26
1 amount thereof then unpaid together with any interest thereon accrued but
2 unpaid.
3 (3) Any such loan shall be subject to the approval of the director. The
4 trust fund shall, in advance of the loan, file with the director a statement
5 of the purpose of the loan and a copy of the proposed loan agreement. The loan
6 and agreement shall be deemed approved unless within fifteen (15) days after
7 the date of such filing, the trust fund is notified of the director's disap-
8 proval and the reasons therefor. The director shall disapprove any proposed
9 loan or agreement if he finds the loan is unnecessary or excessive for the
10 purpose intended, or that the terms of the loan agreement are not fair and
11 equitable to the parties, and to other similar lenders, if any, to the trust
12 fund, or that the information so filed by the trust fund is inadequate.
13 (4) Any such loan to the trust fund or substantial portion thereof shall
14 be repaid by the trust fund when no longer reasonably necessary for the pur-
15 pose originally intended. No repayment of such a loan shall be made by the
16 fund unless approved in advance by the director.
17 (5) In the event of liquidation, repayment of the balance of the borrowed
18 funds and any accrued interest then due and owing shall be paid only out of
19 assets remaining after the payment of all obligations and claims of owners or
20 operators of petroleum tanks insured by the trust fund and general creditors.
21 (6) The provisions of this section shall not apply to loans obtained by
22 the trust fund in ordinary course of business from banks and other financial
23 institutions, nor to loans secured by pledge or mortgage of assets.
24 SECTION 45. That Section 41-4944, Idaho Code, be, and the same is hereby
25 amended to read as follows:
26 41-49441. PENALTIES. (1) Any person who willfully violates or causes or
27 induces a violation of any provision of this chapter or any lawful rule or
28 regulation of the director issued thereunder, shall be subject to penalty as
29 provided in subsection (4) of this section.
30 (2) Any person who makes a false statement or representation of a mate-
31 rial fact, knowing it to be false, or who knowingly fails to disclose a mate-
32 rial fact in any application, examination, or statement required under this
33 act or by lawful rule or regulation of the director thereunder, shall be sub-
34 ject to penalty as provided in subsection (4) of this section.
35 (3) Any person who makes a false entry in any book, record, statement, or
36 report required in this chapter or lawful rule or regulation of the director
37 thereunder to be kept by him, with intent to injure or defraud the trust fund
38 or any member thereof, or to deceive any one anyone authorized or entitled to
39 examine the affairs of the trust fund, shall be subject to penalty as provided
40 in subsection (4) of this section.
41 (4) For each such violation, act or omission referred to in this section,
42 unless greater penalty is provided therefor under any other applicable law,
43 the offender shall upon conviction thereof be subject to a fine of not more
44 than one thousand dollars ($1,000) and to imprisonment for not more than one
45 (1) year, or to both such fine and imprisonment.
46 SECTION 46. That Section 41-4945, Idaho Code, be, and the same is hereby
47 amended to read as follows:
48 41-49452. RULES AND REGULATIONS -- DIRECTOR -- DEPARTMENT OF INSURANCE.
49 (1) The director may make reasonable rules and regulations necessary as an aid
50 to the effectuation of any provision of this chapter. No such rule or regula-
51 tion shall extend, modify or conflict with any provision of this chapter and
27
1 the reasonable implications thereof.
2 (2) Such rules, and regulations, or any amendment thereof, shall be made
3 by the director only after a public hearing thereon of which the director has
4 given written notice not less than thirty (30) days in advance to the trustee
5 board of the trust fund then registered with him. If reasonably possible the
6 director shall include with the notice a copy of the proposed rules and regu-
7 lations or amendment, or a condensed summary of material proposed provisions.
8 (3) All procedures and policies concerning the promulgation of such
9 rules, and regulations, or any amendment thereof, are subject to the provi-
10 sions of chapter 52, title 67, Idaho Code, and the rules of practice and pro-
11 cedure of the department of insurance.
12 SECTION 47. That Section 41-4946, Idaho Code, be, and the same is hereby
13 amended to read as follows:
14 41-49463. APPLICATION OF CHAPTER. All of the provisions of this chapter
15 shall apply to and confer all rights, privileges, exemptions and immunities
16 upon the trust fund established for the purposes contemplated in this chapter,
17 and the manager as trustee administrator, insured owners or operators of
18 petroleum tanks, beneficiaries, and participants thereof. The provisions of
19 this chapter shall not apply to any railroad, railroad corporation, or any
20 employee thereof when such employee is acting in the course of his employment
21 for any such railroad or railroad corporation.
22 SECTION 48. That Section 41-4947, Idaho Code, be, and the same is hereby
23 amended to read as follows:
24 41-49474. INSURANCE. The coverage provided by the trust fund established
25 pursuant to this chapter shall be deemed insurance for the purposes of any
26 requirements of the Idaho department of environmental quality concerning the
27 financial responsibility of owners or operators of petroleum storage tanks.
28 SECTION 49. That Section 41-4948, Idaho Code, be, and the same is hereby
29 repealed.
30 SECTION 50. That Chapter 49, Title 41, Idaho Code, be, and the same is
31 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
32 ignated as Section 41-4945, Idaho Code, and to read as follows:
33 41-4945. PERSONAL LIABILITY. The administrator shall not, nor shall any
34 person employed by him, be personally liable in his private capacity for or on
35 account of any act performed or contract entered into in good faith and with-
36 out the intent to defraud, in connection with the administration of the fund
37 or affairs relating thereto.
38 SECTION 51. That Chapter 49, Title 41, Idaho Code, be, and the same is
39 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
40 ignated as Section 41-4946, Idaho Code, and to read as follows:
41 41-4946. ACTIONS AGAINST THE FUND, ITS EMPLOYEES, AND ADMINISTRATOR SUB-
42 JECT TO THE IDAHO TORT CLAIMS ACT. Any action against the fund, its employees,
43 and the administrator shall be subject in full to the Idaho tort claims act
44 under chapter 9, title 6, Idaho Code.
45 SECTION 52. That Section 63-2427A, Idaho Code, be, and the same is hereby
28
1 amended to read as follows:
2 63-2427A. DISTRIBUTOR'S LICENSE. (1) It is unlawful for a person to act
3 as a distributor without a license unless the person only purchases fuel which
4 is either or both:
5 (a) Motor fuel on which any tax due under this chapter has previously
6 been imposed upon a licensed distributor; or
7 (b) Dyed fuel upon which the transfer fee imposed in section 41-49089,
8 Idaho Code, has been imposed upon a licensed distributor.
9 (2) Application for a license shall be made upon forms furnished and in a
10 manner prescribed by the commission and shall contain information as it deems
11 necessary, and be accompanied by a bond in the amount required in section
12 63-2428, Idaho Code.
13 (3) Upon receipt of the application and bond in proper form the commis-
14 sion shall issue the applicant a license to act as a distributor unless the
15 applicant:
16 (a) Is a person who formerly held a license under the provisions of this
17 chapter, any predecessor statute, under the laws of any other jurisdic-
18 tion, or under the laws of the United States which license, prior to the
19 time of filing this application, had been revoked for cause within five
20 (5) years from the date of such application; or
21 (b) Is a person who has outstanding fuel tax liabilities to this state,
22 any other jurisdiction or the United States government; or
23 (c) Is a person who has been convicted, under the laws of the United
24 States or any state or jurisdiction or subdivision thereof, of fraud, tax
25 evasion, or a violation of the laws governing the reporting and payment of
26 fees or taxes for petroleum products within five (5) years from the date
27 of making such application; or
28 (d) Is a person who has been convicted of a felony or been granted a
29 withheld judgment following an adjudication of guilt of a felony within
30 five (5) years from the date of such application; or
31 (e) Who is not the real party in interest and the real party in interest
32 is a person described in subsection (3)(a), (3)(b), (3)(c) or (3)(d) of
33 this section.
34 (4) Upon approval of the application the distributor's license shall be
35 valid until it is suspended or revoked for cause, for failure to maintain the
36 bond required in section 63-2428, Idaho Code, for failure to file returns
37 required in this chapter, for failure to pay all taxes and fees due with a
38 return required in this chapter, or is otherwise canceled.
39 (5) No distributor's license shall be transferable.
40 (6) The commission shall furnish each licensed distributor with a list of
41 all distributors licensed pursuant to this section. The list shall be supple-
42 mented by the commission from time to time to reflect additions and deletions.
43 SECTION 53. That Section 63-2427B, Idaho Code, be, and the same is hereby
44 amended to read as follows:
45 63-2427B. LICENSED GASEOUS FUELS DISTRIBUTORS -- REPORTS. (1) In lieu of
46 the distributor's license required by section 63-2427A, Idaho Code, the com-
47 mission may issue a gaseous fuels distributor's license to a distributor who
48 applies for the license and who does not deal in fuel, other than gaseous
49 fuels, except fuel which is either:
50 (a) Motor fuel on which any tax due under this chapter has previously
51 been imposed upon a licensed distributor; or
52 (b) Dyed fuel upon which the transfer fee imposed in section 41-49089,
29
1 Idaho Code, has been imposed upon a licensed distributor.
2 (2) Licensed gaseous fuels distributors shall, not later than the last
3 day of each calendar month or for such other reporting period as the commis-
4 sion may authorize, render to the commission an accurate report of all gaseous
5 fuels that are subject to tax under this chapter during the preceding report-
6 ing period. The report shall be made in the manner and on forms required by
7 the commission and shall include such other information as the commission may
8 require for the proper administration of this chapter.
STATEMENT OF PURPOSE
RS 12440
The purpose of this legislation is to amend Title 41, Chapter 49 of
the Idaho Code, the Petroleum Clean Water Trust Fund Act, to
provide for an independent board of individuals knowledgeable and
experienced in the industry, and to update outdated language.
RS12440 creates a seven-member board of trustees including
legislators, industry representatives who participate in the trust
fund, and insurance and environmental remediation specialists.
Trustees are appointed by the governor.
The duty of the board is to "direct policies and operation of the
fund to assure that it is run as an efficient insurance company,
remains actuarially sound, and maintains the public purposes for
which the Idaho petroleum clean water trust fund was created."
RS12440 also updates Chapter 49 to remove language related to the
start-up of the trust fund.
FISCAL IMPACT
There is no fiscal impact to the General Fund or other state funds.
Contact: Suzanne Budge Schaefer
Idaho Petroleum Marketers & Convenience Store Association
345-6632
STATEMENT OF PURPOSE/FISCAL NOTE H 13