Proposed Expedited Rules Relating to the Dry Cleaner Environmental Response and Reimbursement Account

Transcription

1 Minnesota Pollution Control Agency Proposed Expedited Rules Relating to the Dry Cleaner Environmental Response and Reimbursement Account Memorandum Regarding Adoption of Chapter 7152 Minn. Stat. 115B.47 to 115B.51 establishes the Dry Cleaner Environmental Response and Reimbursement Account (Dry Cleaner Fund) and provides conditions supporting the application of that account. This expedited rulemaking will adopt into rule certain of the requirements that already exist in the statute establishing the Dry Cleaner Fund and add requirements as directed by the 2016 legislature. The Minnesota Pollution Control Agency (MPCA) Commissioner is directed by the 2016 Legislature in Laws of Minnesota 2016, chapter 123, section 5, to conduct expedited rulemaking to adopt rules addressing reimbursement of eligible response action costs for owners or operators of dry cleaning facilities. Laws of Minnesota 2016, chapter 123, section 5. RULEMAKING; DRY CLEANER RESPONSE AND REIMBURSEMENT ACCOUNT. (a) The commissioner of the Pollution Control Agency shall adopt rules using the expedited rulemaking process under Minnesota Statutes, section , including subdivision 5, to establish, with respect to Minnesota Statutes, section 115B.50, subdivision 2: (1) what environmental response costs are to be considered reasonable costs and what costs are to be considered ineligible for reimbursement; (2) appropriate application requirements for reimbursement; and (3) a process to adjust payment reimbursement rates made for response actions. (b) Rules adopted under this section: (1) must be consistent with Minnesota Statutes, sections 115B.47 to 115B.51; (2) must be structured like rules governing applicable provisions of the petroleum tank response cleanup fund under Minnesota Rules, chapter 2890, as necessary to implement paragraph (a), clauses (1) to (3); and (3) must not reduce reimbursements as contained in Minnesota Rules, part , subpart 1, item C. The 2016 Legislature, in Minn. Stat. 115B.50, subd. 4 also provides the MPCA with the authority to make adjustments to the dollar amounts established in the rules through the expedited rule process. 115B.50, subd. 4. Reimbursement adjustment rulemaking. The commissioner may use the expedited rulemaking process under section to adjust reimbursement dollar amounts contained in the rules established under subdivision 2.

2 1. Compliance with the statutory mandate Laws of Minnesota 2016, chapter 123, section 5, RULEMAKING; DRY CLEANER RESPONSE AND REIMBURSEMENT ACCOUNT. (a) The commissioner of the Pollution Control Agency shall adopt rules using the expedited rulemaking process under Minnesota Statutes, section , including subdivision 5, to establish, with respect to Minnesota Statutes, section 115B.50, subdivision 2: (1) what environmental response costs are to be considered reasonable costs and what costs are to be considered ineligible for reimbursement; (2) appropriate application requirements for reimbursement; and (3) a process to adjust payment reimbursement rates made for response actions. (b) Rules adopted under this section: (1) must be consistent with Minnesota Statutes, sections 115B.47 to 115B.51; (2) must be structured like rules governing applicable provisions of the petroleum tank response cleanup fund under Minnesota Rules, chapter 2890, as necessary to implement paragraph (a), clauses (1) to (3); and (3) must not reduce reimbursements as contained in Minnesota Rules, part , subpart 1, item C. Laws of Minnesota 2016, chapter 123, section 5(a), addressing the Dry Cleaner Fund, directs the MPCA commissioner to adopt expedited rules that: 1) Establish what environmental costs are considered reasonable costs and what costs are considered ineligible for reimbursement. 2) Establish the appropriate requirements to apply for reimbursement. 3) Establish a process to adjust payment reimbursement rates made for responsible actions. The proposed rules meet all of these requirements as follows: 1) Eligible and ineligible costs are identified in proposed parts and ) The procedures to apply for reimbursement are established in proposed part ) The procedure to adjust payment reimbursement rates is established in proposed part Laws of Minnesota 2016, chapter 123, section 5(b) Laws of Minnesota, chapter 123, section 5(b), specifies that the adopted expedited rules must: 1) be consistent with the requirements established in Minn. Stat. 115B.47 to 115B.51; 2) be structured similarly to the rules that govern the Petroleum Tank Release Cleanup Fund (Petrofund); and 3) not include the requirements of the Petrofund rules regarding reduction of reimbursement for non-cooperation. Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 2 of 26

3 1) Consistent with the requirements of Minn. Stat. 115B.47 to 115B.51 Laws of Minnesota 2016, chapter 123, section 5(b)(1), requires the rule to be consistent with the requirements already established in Minn. Stat. 115B.47 to 115B.51. The sections are as follows: 115B.47 CITATION. This section is not applicable to the proposed rules. 115B.48 DEFINITIONS. Certain terms used in the rules are already defined in Minn. Stat. 115B.48. The other terms defined in Minn. Stat. 115B.48 are not used in the proposed rules and therefore, inapplicable. 115B.49 DRY CLEANER ENVIRONMENTAL RESPONSE AND REIMBURSEMENT ACCOUNT. This section is not applicable to the proposed rules. 115B.491 DRY CLEANING FACILITY USE FEE; FACILITIES TO FILE RETURN. This section is not applicable to the proposed rules. 115B.492 ALLOCATION OF PAYMENT. This section is not applicable to the proposed rules. 115B.50 RESPONSE ACTIONS. The requirements in this section relating to response actions are applicable to the proposed rules as follows: 115B.50 Subdivision 1. Response actions by commissioner. This section is not applicable to the proposed rules. 115B.50 Subdivision 2, (a) At the request of the owner or operator of a dry cleaning facility who takes response actions at the facility in accordance with a response action plan approved by the commissioner, the commissioner shall reimburse the owner or operator for all but $10,000 of the environmental response costs incurred by the owner or operator if the commissioner determines that the costs are reasonable and were actually incurred. If a request for reimbursement is denied, the owner or operator may appeal the decision as a contested case under chapter 14. The proposed rules address the statutory requirements in item (a) of subdivision 2 as follows: The commissioner must reimburse the owner or operator for all but $10,000 of the environmental response costs The proposed rule part , subp. 2, item Z mirrors this concept by addressing the first $10,000 of aggregate response costs, according to Minnesota Statutes, section 115B.50, subd. 2, paragraph (a). The commissioner must reimburse the owner or operator for all but $10,000 of the environmental response costs if: The costs are reasonable The proposed rule parts , subpart 2 and , subpart 1, item B, address that costs are not eligible for reimbursement if they are not reasonable. The costs were actually incurred The proposed rule part , subpart 1, item A addresses that eligible costs must be incurred by the applicant. If a request for reimbursement is denied, the owner or operator may appeal the decision as a contested case under chapter 14 See the proposed rule part , subpart B.50 Subdivision 2, (b) If the commissioner reimburses an owner or operator for environmental response costs under this subdivision for which the owner or operator has insurance coverage, the commissioner is subrogated to the rights of the owner or operator with respect to that insurance coverage to the extent of the reimbursement. Acceptance of reimbursement under this subdivision Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 3 of 26

4 constitutes an assignment by the owner or operator with respect to any insurance coverage applicable to the costs that are reimbursed. The proposed rule addresses the statutory requirement of item (b) of subdivision 2 as follows: Insured costs are not eligible for reimbursement under proposed rule part , subpart 2, item U. 115B.50 Subdivision 3. Limitation on amount that may be spent. The commissioner may not, in a single fiscal year, make expenditures from the account related to a single dry cleaning facility that exceed $100,000. The commissioner may not reimburse more than $100,000 per year to a single facility. The legislative directive did not require the MPCA to address this aspect of the administration of the Dry Cleaner Fund in the proposed rules. However, the MPCA made this change because the previous maximum reimbursement amount of 20% of the Dry Cleaner Fund s balance at the beginning of each fiscal year meant that a significant balance needed to be maintained in order to reimburse large requests later in the fiscal year. This resulted in delayed reimbursements to applicants. 115B.51 ILLEGAL ACTIONS. The commissioner may recover under section 115B.17, subdivision 6, that portion of the environmental response costs at a dry cleaning facility that is attributable to a person who otherwise would be responsible for the release or threatened release under section 115B.03, and whose actions related to the release or threatened release were in violation of federal or state hazardous waste management laws in effect at the time of those actions. The proposed rule part , subpart 2, item X lists as an ineligible cost those costs resulting from illegal actions as provided in section 115B.51. 2) Structure similar to Minn. R. ch The structure of the proposed rules is modeled on the applicable elements of Minn. R. ch. 2890, the rules governing the Petrofund, administered by the Petroleum Tank Release Compensation Board. Minn. R. ch is structured as follows (paraphrased): Applicability and definitions Structure, operation and conduct of Board meetings Reimbursement of costs Reductions of reimbursement amounts Eligible and ineligible costs Proposal requirements Maximum costs and conditions addressing reasonableness, emergencies, and use of alternative technologies Conditions relating to groundwater and soil investigation and installation of wells Administrative functions such as applications, appeals and adjustment of rates. The proposed rules correspond to the structure of Minn. R. ch by establishing the conditions for reimbursement, eligible and ineligible costs, maximum costs, the process for applying for reimbursement, and the process for adjusting the established rates. The proposed rules also correspond to the structure of Minn. R. ch by incorporating specific requirements of that chapter. Many of the definitions in the proposed rules are the same as those terms defined in Minn. R. ch The proposed eligible and ineligible costs correspond to specific requirements of Minn. R. ch and the proposed process for adjusting the established rates is Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 4 of 26

5 directly tied to the process established in Minn. R. ch for modifying the rates administered by the Petroleum Tank Release Compensation Board. However, there are also unavoidable differences between certain of the elements addressed in the proposed rules and those in Minn. R. ch The most significant differences reflect the complexity of responding to hazardous substance releases in dry cleaner response actions. Also, there are significant differences in the administrative processes. The Dry Cleaner Fund is not administered by a Board, as is the Petrofund; therefore, there is no need for the proposed rules to reflect the parts of Minn. R. ch that relate to administration. Additional differences are identified in the point-by-point discussion of each part of Minn. R. ch provided below. Where it is reasonable, the proposed rules use the same language as the corresponding requirements in Minn. R. ch However, in many cases, minor changes were made to either clarify the requirement, conform to the specific needs of the Dry Cleaner Fund or to comply with current drafting guidance of the Office of the Revisor of Statutes (Revisor). Those specific differences are discussed as each proposed rule is discussed. A comparison of the structure of Minn. R. ch and the proposed rules and an explanation of the differences is provided below. a APPLICABILITY. This section is not relevant to dry cleaner releases. b DEFINITIONS. This section is similar to proposed rule section c BOARD MEETINGS; TIME, PLACE, NOTICE. VICE-CHAIR. CONDUCT OF MEETINGS. CONFLICT OF INTEREST. This section is not relevant to dry cleaner releases. d REDUCTION OF REIMBURSEMENT AMOUNT. As directed by statute, the proposed rules do not include any conditions for the reduction of reimbursement amounts. The types of activities that are subject to reductions under Minn. R. pt , subpart 1, items A and B, such as tank design and construction and providing notice of releases, are not relevant to the types of response actions undertaken at dry cleaner response actions. Minn. R. pt , subpart 1, item C allows for a reduction in reimbursement for failing to cooperate fully with the MPCA. As discussed below, the proposed rules do not allow this sort of reduction because it is specifically prohibited by Minnesota 2016 Session Laws, Chapter 123, Section 5 (b)(3). e ELIGIBLE COSTS. This section is similar to proposed rule section f INELIGIBLE COSTS. This section is similar to proposed rule section g WRITTEN PROPOSAL AND COST SUMMARY REQUIREMENTS FOR CONSULTANT SERVICES. This section is not relevant to dry cleaner releases. h REASONABLENESS OF WORK PERFORMED FOR EACH STEP OF SERVICES. This section is not relevant to dry cleaner releases. i MAXIMUM COSTS FOR CONSULTANT SERVICES. This section is similar to proposed rule section j MAXIMUM PRELIMINARY LABOR CHARGES. This section is not relevant to dry cleaner releases. k ALTERNATIVE TECHNOLOGIES. This section is not relevant to dry cleaner releases. Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 5 of 26

6 l MAXIMUM HOURLY RATES. This section is similar to proposed rule section m MAXIMUM TRAVEL AND PER DIEM CHARGES. This section is similar to proposed rule section n MAXIMUM EQUIPMENT AND FIELD SUPPLY CHARGES. This section is not relevant to dry cleaner releases. o MAXIMUM LABOR CHARGES FOR WORK PERFORMED DURING ACTIVE REMEDIATION STEPS OF SERVICE. This section is not relevant to dry cleaner releases. p EMERGENCY RESPONSE COSTS. This section is not relevant to dry cleaner releases. q COSTS FOR REQUIRED PERMITS. This section is not relevant to dry cleaner releases. r ADJUSTMENT OF DOLLAR AMOUNTS. This section is similar to proposed rule section s COMPETITIVE BIDDING REQUIREMENTS FOR CONSULTANT SERVICES PROPOSALS. This section is not relevant to dry cleaner releases. t DEVIATIONS FROM PROPOSED TASKS OR MAXIMUM COSTS FOR CONSULTANT SERVICES. This section is not relevant to dry cleaner releases. u ACTUAL CONSULTANT SERVICES COSTS. This section is similar to proposed rule section v MAXIMUM COSTS FOR CONTRACTOR SERVICES. This section is similar to proposed rule section w MAXIMUM COSTS IN MEANS BOOK. This section is not relevant to dry cleaner releases. x MAXIMUM COSTS FOR SYSTEM INSTALLATION. This section is not relevant to dry cleaner releases. y MAXIMUM COSTS FOR MOBILIZATION/DEMOBILIZATION (HEAVY EQUIPMENT), SAW-CUTTING, SOIL DISPOSAL, SURFACE REMOVAL, AND SURFACE REPLACEMENT. This section is not relevant to dry cleaner releases. z MAXIMUM ANALYTICAL CHARGES. This section is not relevant to dry cleaner releases. aa. bb. cc AIR SAMPLE ANALYSIS. This section is not relevant to dry cleaner releases GROUNDWATER SAMPLE ANALYSIS. This section is not relevant to dry cleaner releases SOIL SAMPLE ANALYSIS. MAXIMUM DRILLING CHARGES, DIRECT PUSH TECHNOLOGY. MAXIMUM DRILLING CHARGES, OTHER TECHNOLOGIES. SOIL BORING ADVANCEMENT. ABOVEGROUND WELL INSTALLATION. AT-GRADE WELL INSTALLATION. SOIL BORING AND MONITORING WELL SEALING. DRILLING MOBILIZATION/DEMOBILIZATION AND DRILL CREW PER DIEM FOR TECHNOLOGIES OTHER THAN DIRECT PUSH. This section is not relevant to dry cleaner releases. Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 6 of 26

7 dd. ee. ff. gg. hh. ii MAXIMUM COSTS FOR OTHER CONTRACTOR SERVICES. This section is not relevant to dry cleaner releases ADJUSTMENT OF DOLLAR AMOUNTS. This section is similar to proposed rule section COMPETITIVE BIDDING REQUIREMENTS FOR CONTRACTOR SERVICES. This section is not relevant to dry cleaner releases DEVIATIONS FROM MAXIMUM COSTS FOR CONTRACTOR SERVICES. This section is not relevant to dry cleaner releases ACTUAL CONTRACTOR SERVICES COSTS. This section is similar to proposed rule section WRITTEN INVOICE REQUIREMENTS FOR CONTRACTOR SERVICES. This section is not relevant to dry cleaner releases. jj APPLICATION PROCESS. This section is similar to proposed rule section kk REVIEW AND DETERMINATION. This section is not relevant to dry cleaner releases. ll RIGHT TO APPEAL. This section is similar to proposed rule section mm FUNDING OF MPCA ACTIONS. The Petrofund and Dry Cleaner Environmental Response and Reimbursement Fund function in different manners. There is no intended limitation on the Agency using the Dry Cleaner Environmental Response and Reimbursement Fund for response actions. nn ACTION ON NOTICE OF LIEN FILING. This section is not relevant to dry cleaner releases. 3) Not include a reduction in reimbursement Laws of Minnesota 2016, chapter 123, section 5(b)(3) prohibits the MPCA from adopting rules that allow reductions in reimbursements for not cooperating fully with the MPCA. Minn. R. pt , subp. 1, item C, states the Board must reduce the amount of reimbursement to be made to an applicant as follows. For failure to cooperate fully with the agency in responding to the release, the board must reduce the amount of reimbursement by up to 50%. The proposed rules do not include any condition similar to this requirement of Minn. R. pt , subp. 1, item C. 2. Discussion of Proposed Rules A DEFINITIONS. Many of the proposed definitions are the same terms used in the rules governing the Petrofund. Those definitions are repeated in the proposed rules, either verbatim or with slight modifications to accommodate updated conventions of the Revisor or the specific needs of the Dry Cleaner Fund. Subpart 1. Scope. In some cases, the terms used in the rules are defined in statute and the proposed rule directs the reader to the applicable statutes where existing definitions may be found. Subpart 2. Agency. The proposed definition of agency is the same as the definition of agency in the Petrofund rules, Minn. R. pt , subp. 3 and the definition provided in Minn. Stat. 115B.02, subd.3. Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 7 of 26

8 Subpart 3. Applicant. The proposed definition of applicant refers to the definition of owner or operator provided in Minn. Stat. 115B.48, subd. 10. The MPCA and stakeholders intend to reimburse only those applicants that are current or former owners or operators of dry cleaning facilities, or property owners that leased to drycleaners during the time the dry cleaning facility operated. The intent is to exclude third parties such as developers and banks from eligibility for reimbursement from the Dry Cleaner Fund. Subpart 4. Commissioner. The proposed definition of commissioner is the same as the definition of commissioner in the Petrofund rules, Minn. R. pt , subp. 18 and the definition provided in Minn. Stat. 115B.02, subd. 4, (the statutory definition is slightly different by including a reference to the commissioner of the Department of Agriculture in addition to the commissioner of the Pollution Control Agency.) Subpart 5. Consultant services. The proposed definition of consultant services is the same as the definition of consultant services in the Petrofund rules, Minn. R. pt , subp. 26. Subpart 6. Contractor services. The proposed definition of contractor or contractor services is similar to the definition of contractor services in the Petrofund rules, Minn. R. pt , subp , subp. 28. Contractor services. "Contractor services" means products and services within a scope of work that can be defined by typical written plans and specifications including, but not limited to, excavation, treatment of contaminated soil and groundwater, soil borings and well installations, laboratory analysis, surveying, electrical work, plumbing, carpentry, and equipment. The Revisor suggested three modifications to how contractor services are defined in the proposed rules. First, the undefined phrase scope of work is deleted and replaced with a more specific phrase describing the products and services a contractor provides (i.e., products and services that are related to response actions ). Second, the phrase typical written plans is revised to remove the use of the discretionary term typical and to more accurately identify agreements and plans and specifications as the documents being defined. Third, the phrase examples are is replaced with the phrase, such as, to limit the agency s discretion about the application of the definition. Subpart 7. Draftsperson. The proposed definition of draftsperson is the same as the definition of draftsperson in the Petrofund rules, Minn. R. pt , subp. 32. Subpart 8. Entry-level professional. The proposed definition of entry-level professional is the same as the definition of entry-level professional in the Petrofund rules, Minn. R. pt , subp. 41, with two exceptions , subp. 41. Entry level professional. "Entry level professional" means a person with: A. a college degree in agricultural engineering, chemical engineering, civil engineering, environmental engineering, geological engineering, geotechnical engineering, soil science, geology, hydrogeology, or a related science; or B. at least five years of experience in performing a majority of the following activities: Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 8 of 26

9 (1) report preparation; (2) field work preparation and planning; (3) supervision of site assessment activities; (4) system installation oversight; (5) limited data review and analysis; and (6) monitoring activities. First, the Revisor pointed out that the definition in Minn. R. pt , subp. 41, item B, subitem 3 used the undefined term site assessment activities. The MPCA has defined the experience requirements to be more applicable to the needs of dry cleaner response actions. The proposed rules eliminate the reference to experience with supervision of site assessment activities and instead provide the option of having experience in supervision of field work. The MPCA is proposing a new definition of field work in subpart 11 to include activities considered in the scope of the experience expected of an entry level professional. Second, the Revisor pointed out that the term system installation was undefined. The MPCA has defined the experience requirements to be more applicable to the needs of dry cleaner response actions. The proposed rules eliminate the reference to experience with oversight of system installation and instead provide the option of having experience in oversight of remediation system installation. The MPCA is proposing a definition of remediation system in subpart 16. Subpart 9. Equipment and field supplies. The proposed definition of equipment and field supplies is similar to the first part of the definition of equipment and field supplies in the Petrofund rules, Minn. R. pt , subp. 42. The remaining part of the definition in the Petrofund rules is specific to the equipment and field supplies associated with petroleum tank releases and is unnecessary to the application of the term for dry cleaner releases. The Revisor suggested a modification to the definition to eliminate defining a noun by the use of a verb phrase (equipment and field supplies means the purchase of ). The difference is grammatical and does not alter the meaning of the phrase , subp. 42. Equipment and field supplies. "Equipment and field supplies" means the purchase or rental of equipment and supplies necessary to perform consultant services including, but not limited to, AccuVac ampoules, carbon dioxide meters, color charts, colorimetric ampoules, coolers, coring devices, decontamination fluids, direct reading probes, dissolved iron field analysis kits, electronic water level indicators, explosimeters, filtration devices, flame ionization detectors, flow cells, ice, membrane electrode probes, oil water interface indicators, oxide semiconductor total hydrocarbon detectors, personal protective gear, ph meters, photoionization detectors, polyethylene bags, pumps, rope, sample containers, sample labels, sampling bailers, sampling gloves, steel tape, temperature probes, tubing, and water-finding paste. Subpart 10. Field technician. The proposed definition of field technician is the same as the definition of field technician in the Petrofund rules, Minn. R. pt , subp. 47 with one exception. The definition is slightly modified to remove the qualifier that the field work must be environmental field work. The Revisor pointed out that the two terms, environmental field work and field work lacked definitions. For purposes of this rule, there is no difference between environmental field work and field work and that defining a single term field work is a way to characterize the nature of the duties associated with that position. A definition of field work is provided in subpart , subp. 47. Field technician. "Field technician" means a person who performs environmental field work. Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 9 of 26

10 Subpart 11. Field work. The proposed definition of field work is necessary to support the definition of entry-level professional in subpart 8. The definition describes the activities that occur at a response action site that would be a responsibility of an entry-level professional. Subpart 12. Midlevel professional. The proposed definition of midlevel professional is the same as the definition of midlevel professional in the Petrofund rules, Minn. R. pt , subp. 74 with two exceptions. The Revisor identified two terms in the definition that were undefined. Minn. R. pt , subp. 74, item B, subitem 1 refers to project management. The same concern was identified for the term off-site access in Minn. R. pt , subp. 74, item B, subitem 8. Rather than adding new definitions for project management and off-site access, it is more practical to modify this list of qualifying experience options to be more specific to the subject of the proposed rule. The MPCA adds a new experience option for a mid-level professional to include management of investigation and response activities. The term off-site access is relevant to petroleum release activities, but not specifically applicable to dry cleaner releases so is deleted from the experience options for a midlevel professional , subp. 74. Midlevel professional. "Midlevel professional" means a person with: A. a college degree in agricultural engineering, chemical engineering, civil engineering, environmental engineering, geological engineering, geotechnical engineering, soil science, geology, hydrogeology, or a related science; and at least four years of experience in performing one or more of the activities listed in this subpart; or B. a graduate degree in the environmental sciences and at least three years of experience in performing one or more of the following activities: (1) project management; (2) engineering/equipment design; (3) report preparation; (4) data review and analysis; (5) field work planning; (6) work plan preparation; (7) site inspection; and (8) off-site access. Subpart 13. Per diem. The proposed definition of per diem is similar to the definition of per diem in the Petrofund rules, Minn. R. pt , subp. 88 with two exceptions. Minn. R. pt , subp. 88 refers to overnight lodging near the leak site and the proposed rules refer instead to overnight lodging near the response-action site. The term response-action site is more appropriate to the types of activities addressed by the proposed rules, which may or may not be in response to a leak. The definition is also slightly modified, on the advice of the Revisor, to more grammatically refer to the daily charges for costs of meals and lodging instead of the costs for meals and lodging , subp. 88. Per diem. "Per diem" means costs for meals and lodging when the distance to the leak site makes it more cost-effective to lodge overnight near the leak site Subpart 14. Person. The proposed definition of person is the same as the definition of person in the Petrofund rules, Minn. R. pt , subp. 89. Subpart 15. Prima facie unreasonable. The proposed definition of prima facie unreasonable is the same as the definition of prima facie unreasonable in the Petrofund rules, Minn. R. pt , subp. 91. Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 10 of 26

11 Subpart 16. Remediation system. The proposed definition of remediation system was needed to support the definition of entry-level professional, which allows for experience in oversight of remediation system installation. The MPCA believes the definition of remediation addresses the type of systems used as part of a dry cleaner response action. Subpart 17. Response action. The proposed definition of response action refers to, and is consistent with, the statutory definition of respond in Minn. Stat. 115B.02, subd. 18. Subpart 18. Response action plan. The proposed definition clarifies that wherever response action plan is referred to in the rules, it means only those activities that are approved by the commissioner. Subpart 19. Senior-level professional. The proposed definition of senior-level professional is the same as the definition of senior-level professional in the Petrofund rules, Minn. R. pt , subp. 98. Subpart 20. Site inspection. The Revisor recommended that site inspection be defined to clarify the application of the term as it is used in subpart 12, the definition of midlevel professional. The proposed definition describes the activities associated with site inspection in relation to dry cleaner response actions. Subp.21. Travel time. The proposed definition of travel time is the same as the definition of travel time in the Petrofund rules, Minn. R. pt , subp. 120 with the exception that the phrase response-action site is used in lieu of the phrase leak site. The term response-action site is more appropriate to the types of activities addressed by the proposed rules, which may or may not be in response to a leak , subp Travel time. "Travel time" means the time required to mobilize equipment and to travel to and from the leak site or other location necessary to provide consultant services. Subp. 22. Vehicle mileage. The proposed definition of vehicle mileage is the same as the definition of vehicle mileage in the Petrofund rules, Minn. R. pt , subp. 125 with the exception that the phrase response action site is used in lieu of the phrase leak site. The term response action site is more appropriate to the types of activities addressed by the proposed rules, which may or may not be in response to a leak. Subp. 23. Word processing. The proposed definition of word processing is the same as the definition of word processing in the Petrofund rules, Minn. R. pt , subp Subp. 24. Word processor. The proposed definition of word processor is the same as the definition of word processor in the Petrofund rules, Minn. R. pt , subp B REIMBURSEMENT OF COSTS. Subpart 1 establishes the applicability of this chapter. Two conditions control the applicability; the requirements establishing eligible costs in proposed part and also the requirements of Minn. Stat. 115B.50, subd. 2, which addresses the limitations of reimbursement and conditions relative to insured costs. Subpart 2 requires that in order to be reimbursed under this rule, the costs must be reasonable and necessary to protect the public health, welfare or the environment. This condition is based on Minn. Stat. 115B.50 subd. 1, which requires the commissioner to take all response actions at or related to a dry cleaning facility that the commissioner determines are reasonable and necessary to protect the public health or welfare or the environment under the standards required in sections 115B.01 to 115B.20. This statutory language, although relating to the commissioner s actions in a response action, Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 11 of 26

12 is also used to establish the boundaries of what can be considered to be reasonable costs. The proposed rules establish that reasonable costs are those that are: 1. necessary to protect the public health or welfare or the environment; and 2. In accordance with the standards established in Minn. Stat. 115B.01 to 115B.20. The MPCA s discussion of how the proposed rules relate to the standards in those sections is discussed in Part 1 of this document (Compliance with the Statutory Mandate). C ELIGIBLE COSTS. Subpart 1 specifies that eligible costs must meet the requirement of being reasonable and necessary to protect the public health or welfare or the environment as established in part , subpart 2. The costs identified in items A to E in subpart 1 correspond very closely to similar eligible costs in the Petrofund rules. Each item of the proposed rules differs from the Petrofund rules by not including the qualifying phrase costs may include but are not limited to. The Revisor identifies that phrase as overly vague, which may grant the MPCA too much discretion. The Revisor s preferred rule drafting convention is to use the phrase such as to provide clarifying detail about a requirement. Proposed item A corresponds to Minn. R. pt , subp. 1, item A , subp. 1, item A. Emergency response and initial site hazard mitigation. Costs may include, but are not limited to, those necessary to abate acute risks to human health, safety, and the environment. Proposed item A identifies reasonable and expected activities associated with the early phase of a response action. The activities in item A are different than the activities identified in item B by focusing on the emergency aspect of the response action. Although in most cases, the response action for a dry cleaner release is not an emergency, item A allows the reimbursement of activities necessary to abate acute risks under emergency conditions. Proposed item B corresponds to Minn. R. pt , subp.1 item B , subp. 1, item B. Temporary site hazard control measures. Costs may include, but are not limited to, temporary provision of drinking water and housing, initial abatement of vapors, and removal of free product. Proposed item B identifies reasonable and expected activities associated with temporarily controlling access to the site and limiting public exposure to the release. The proposed rule differs slightly from the corresponding Petrofund rule by: adding more detail regarding the type of hazard control that is eligible; and adding a general category of other temporary measures. Adding additional examples of the type of measures to limit access provides clarity. The phrase other temporary measures to limit the public s exposure provides limits about the application of this item and flexibility to allow reimbursement for reasonable activities that are not specified. Proposed item C. corresponds to Minn. R. pt , subp.1 item C , subp. 1, item C. Investigation and source identification including, but not limited to, collecting and analyzing soil samples, testing the groundwater, testing adjacent drinking water supplies, tank integrity testing, and engineering and geoscientific services. Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 12 of 26

13 Proposed item C. differs from the Petrofund rule by: rephrasing the nature of collection and sampling activities; and more broadly characterizing the types of activities covered. Although this item is based on the corresponding Petrofund rule, it has been restructured and rephrased to more clearly identify the type of source investigation and identification activities associated with dry cleaning response actions that are eligible for reimbursement. The response actions identified are standard activities used at both Petrofund and Dry Cleaner Fund sites. Proposed item D corresponds to Minn. R. pt , subp.1 item D , subp. 1, item D. Development of a corrective action plan in accordance with the commissioner's requirements. Proposed item D. differs from the Petrofund rule only by referring to a response action plan instead of a corrective action plan. The difference is a reflection of the different terms used in each program. Item E corresponds to Minn. R. pt , subp.1 item E , subp. 1, item E. Cleanup of releases including, but not limited to, removal, treatment, or disposal of surface and subsurface contamination and provision of a permanent alternative water supply. Cleanup must be performed in accordance with a corrective action plan approved by the commissioner. Proposed item E. differs from the Petrofund rule by: adding detail to the type of contamination addressed (soil, soil vapor, or groundwater); including activities relating to venting and vapor mitigation; reference to a response action plan instead of corrective action plan; and addition of a phrase that allows reimbursement for other actions that remove or remedy a release. The activities in item E. all relate to the phase of the response action that deals with the cleanup and removal of the contaminant. The activities identified are common actions necessary to respond to a dry cleaning release and are reimbursed. Subpart 2 requires that an applicant retain the records necessary to document the costs for which reimbursement is being sought. This requirement corresponds to Minn. R. pt , subp , subp. 3. Documentation of eligible costs. The applicant must get and keep records necessary to document incurred costs submitted in an application for reimbursement for seven years from the date the application is submitted to the board. Among the records required are all invoices, time records, equipment records, receipts, proposals, and bids. The proposed rules differ in regard to the types of documents that must be retained because of the differences between dry cleaning response actions and petroleum tank release corrective actions (the Petrofund rules require retention of proposal and bids, which are not required in the proposed rules). D INELIGIBLE COSTS. This part identifies the costs that are not eligible for reimbursement from the Dry Cleaner Fund. Most of the specific ineligible items are based either on corresponding requirements in the Petrofund rule or on specific exclusions in the legislation relating to the Dry Cleaning Fund. In this part, the MPCA will only Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 13 of 26

14 discuss those aspects of the proposed rules that differ from either the statute or the corresponding exclusions in the Petrofund rules. Subpart 1 identifies general costs that are ineligible for reimbursement. Items A and B exclude costs that were not incurred by the applicant and costs that are not reasonable. These exclusions correspond to the Petrofund rule Minn. R. pt , subp. 1, item B (not incurred) and Minn. R. pt , subp. 1, item C (not reasonable). Identifying these costs as ineligible fulfills the statutory requirement of Minn. Stat. 115B.50, subd. 2, (a), which states: At the request of the owner or operator of a dry cleaning facility who takes response actions at the facility in accordance with a response action plan approved by the commissioner, the commissioner shall reimburse the owner or operator for all but $10,000 of the environmental response costs incurred by the owner or operator if the commissioner determines that the costs are reasonable and were actually incurred. (emphasis added) Subpart 2 identifies specific costs that are ineligible for reimbursement. Many of the costs and activities identified as ineligible correspond to ineligible costs and activities identified in the Petrofund rules (Minn. R. ch. 2890). The table below identifies the costs that are identified as ineligible in the proposed rules and compares them to the corresponding ineligible costs in Minn. R. pt Where the proposed rule is similar to the same exclusion in the Petrofund rule, or only slightly modified, the MPCA has fulfilled the legislative requirement. In the right column, the MPCA provides an explanation of the difference from and reasonableness of those ineligible costs that do not closely correspond to an exclusion in the Petrofund rule; therefore, the MPCA has fulfilled the legislative requirement. Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 14 of 26

15 SPECIFIC COSTS THAT ARE INELIGIBLE FOR REIMBURSEMENT Petroleum Tank Release Rules Proposed Rules Explanation of differences subp. 2 B. loss of income, including the applicant's purported loss of income from land used for the treatment or disposal of contaminated soil generated from the applicant's leak site; subp. 2, item A. loss of income. Petroleum tank releases are allowed to be treated/disposed by spreading on land. Land treatment/disposal is not allowed for dry cleaner releases so the reference to the loss of income from land used for treatment/disposal is not relevant subp. 2 C. attorney fees or other fees charged by an attorney or by another person for providing legal or quasi-legal advice, filing appeals, or providing legal testimony; subp. 2 item B. the applicant s attorney fees or other fees charged by an attorney or by another person for providing legal or quasi-legal advice, filing appeals, or providing legal testimony; Same subp. 2 D. costs for permanent relocation of residents; subp. 2, item C. costs for permanent relocation of residents; Same subp. 2 E. decreased property values for the applicant's property; subp. 2, item D. decreased property values for the applicant s property; Same subp. 2 F. costs for the applicant's own time spent in planning, performing, or administering a corrective action, when the applicant is an individual; subp. 2, item E. costs for the applicant s own time spent in planning, performing, or administering a response action; Minor difference to refer to response action instead of corrective action, which reflects the differences in the two programs. Also, the reference to when the applicant is an individual is not relevant to the process for reimbursing from the Dry Cleaner Fund. Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 15 of 26

16 Petroleum Tank Release Rules Proposed Rules Explanation of differences subp. 2 G. costs for aesthetic or site improvements; subp. 2, item F. costs for aesthetic or site improvements not deemed reasonable and necessary by the commissioner to protect the public health or welfare or the environment under the standards required in sections 115B.01 to 115B.20 This part is modified to provide additional clarification about the nature of reimbursement for aesthetic or site improvements. The commissioner will only provide reimbursement to the extent the improvements are necessary to protect public health and welfare as established by statute. Item F limits those activities to only those activities the commissioner determines are reasonable and necessary to protect the public health or welfare or the environment as that term is applied in Minnesota s Environmental Response and Liability Act (Act). The proposed rule cites to Minn. Stat. 115B.01 to 115B.20 to provide the standard for how the commissioner will make the determination of what is not reasonable and necessary to protect public health or welfare or the environment, and therefore not reimbursable. By citing to the standards required by the Act, the proposed rule provide a general framework for what constitutes protecting public health, welfare or the environment. The term protect public health or welfare or the environment is used in a number of places in the Act. These uses will inform the commissioner s decision in the application of the proposed rules. Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 16 of 26

17 Petroleum Tank Release Rules Proposed Rules Explanation of differences subp. 2 H. costs for work performed that is not in compliance with safety codes including, but not limited to, Occupational Safety and Health Administration requirements, well codes, and fire codes; subp. 2, item G. costs for work performed that is not in compliance with applicable codes; Revised to more broadly apply to all applicable codes and not only the codes that are expected to apply to petroleum tank releases subp. 2 I. per diem charges for sites less than 60 miles from an office of the person providing consultant services or contractor services; subp. 2, item H. per diem charges for sites less than 60 miles from an office of the person providing consultant services or contractor services same subp. 2 J. costs for repair or restoration of structures, surfaces, or land damaged by equipment used in the corrective action, unless the damage was unavoidable to implement corrective action; subp. 2, item I. costs for repair or restoration of structures, surfaces, or land damaged by equipment used in the response action, unless the damage was unavoidable to implement the response action; Minor difference to refer to response action instead of corrective action. This reflects the differences in the terminology in the statutory programs and the reimbursable activities conducted under the different programs subp. 2 N. administrative costs incurred in obtaining reimbursement from the board, including, but not limited to, compiling materials for and preparing applications to the board for reimbursement, responding to inquiries from the board or its staff, or appearing before the board; subp. 2, item J. administrative costs incurred by the applicant, such as: (1) costs for preparing applications; (2) costs for responding to inquiries from agency staff regarding applications; and (3) other administrative costs; Minor difference to reflect differences between the function of the Petroleum Tank Release Compensation Board and the reimbursement process for the Dry Cleaner Fund. The proposed language clarifies that the MPCA does not intend to reimburse applicants for the costs of preparing any applications subp. 2 P. costs for priority turnaround of laboratory analysis, unless requested by the agency; subp. 2, item K. costs for priority turnaround of laboratory analysis, unless requested by the commissioner in writing; Minor difference to clarify that reimbursement will be provided for priority turnaround only when the commissioner requested priority turnaround in writing subp. 2. Q. late payment fees; subp. 2, item L. late payment fees; Same Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 17 of 26

18 Petroleum Tank Release Rules Proposed Rules Explanation of differences subp. 2 R. fees charged by property owners for access to their property, unless charged to preserve public safety; subp. 2 S. interest costs other than those eligible for reimbursement under Minnesota Statutes, ch. 115C; subp. 2, item M. fees charged by property owners for access to private property; subp. 2, item N. interest costs; The Agency has a statutory obligation to protect public health, welfare, and the environment and does not pay for access nor reimburse fees levied for access. Minor differences to reflect the difference between the programs. Minn. Stat. ch. 115C is only applicable to petroleum releases subp. 2 U. costs for work done solely to facilitate a property transfer; subp. 2, item O. costs for work done solely to facilitate a property transfer or refinance; A bank may require environmental investigation as a condition of a loan. However, the costs associated with an environmental investigation performed solely for property transfer or refinance purposes is not a basis for reimbursement from the Dry Cleaner Fund subp. 2 V. costs for property acquisition; subp. 2, item P. purchasing price of property being acquired; Minor difference to more clearly identify the ineligible cost subp. 2 W. administrative costs associated with acquiring business, preparing or responding to a request for proposal, or preparing invoices for services provided or performed; subp. 2, item Q. administrative costs associated with acquiring business, preparing or responding to a request for proposal, or preparing invoices for services; Minor difference to eliminate unnecessary language regarding the nature of invoices for services subp. 2 X. costs for reports not submitted to the agency or not required by the agency; subp. 2, item R. costs for reports not submitted to the commissioner or not required by the commissioner; Minor modification to identify the proper party for submissions and requirements subp. 2 Y. costs for work that the agency has determined was incompetently performed; subp. 2, item S. costs for work that must be redone due to workmanship that fails to meet industry standards; Minor differences to address the concern about the quality of work being reimbursed. This ineligible cost relates to the quality of work performed in a response action and not to effectiveness of the cleanup itself or how the source of risk was addressed. Dry Cleaner Fund Rule Memorandum September 18, 2017 Page 18 of 26