Senate File 2414 - Reprinted SENATE FILE 2414 BY COMMITTEE ON APPROPRIATIONS (SUCCESSOR TO SF 2327) (SUCCESSOR TO SSB 3177) (As Amended and Passed by the Senate April 3, 2024 ) A BILL FOR An Act relating to underground storage tanks, including 1 repealing the Iowa comprehensive petroleum underground 2 storage tank fund and eliminating the Iowa comprehensive 3 petroleum underground storage tank fund board, making 4 appropriations, and including effective date and transition 5 provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 SF 2414 (5) 90 lh/js/mb

S.F. 2414 DIVISION I 1 STORAGE TANK MANAGEMENT ACCOUNT 2 Section 1. Section 455B.471, subsections 1 and 3, Code 2024, 3 are amended by striking the subsections. 4 Sec. 2. Section 455B.471, Code 2024, is amended by adding 5 the following new subsections: 6 NEW SUBSECTION . 1A. “Account” means the storage tank 7 management account created in the groundwater protection fund 8 created in section 455E.11. 9 NEW SUBSECTION . 1B. “Claimant” means an owner or operator 10 who has filed a claim for assistance under the account, and 11 that claim has been approved by the department, or the Iowa 12 comprehensive petroleum underground storage tank fund created 13 in section 455G.3, Code 2024. 14 NEW SUBSECTION . 1C. “Community remediation” means a 15 curriculum of coordinated testing, planning, or remediation 16 involving two or more tank sites potentially connected with a 17 continuous contaminated area, pursuant to rules adopted by the 18 commission under section 455B.474. A community remediation 19 does not expand the scope of coverage otherwise available or 20 relieve liability otherwise imposed under state or federal law. 21 NEW SUBSECTION . 2A. “Costs” means all costs, charges, 22 expenses, or other indebtedness incurred by a claimant that 23 are determined by the department to be reasonable for carrying 24 out all works and undertakings necessary or incidental to the 25 accomplishment of any project. “Costs” includes reasonable 26 attorney fees and costs of litigation for which moneys are 27 expended from the account in connection with a release. 28 NEW SUBSECTION . 3A. “Insurance” means any form of financial 29 assistance or showing of financial responsibility sufficient 30 to comply with the federal Resource Conservation and Recovery 31 Act, 42 U.S.C. §6901 et seq., or the department’s underground 32 storage tank financial responsibility rules. 33 NEW SUBSECTION . 7A. “Potentially responsible party” means a 34 person who may be responsible or liable for a release for which 35 -1- SF 2414 (5) 90 lh/js/mb 1/ 13

S.F. 2414 payments from the account were made for corrective action or 1 third-party liability. 2 NEW SUBSECTION . 7B. “Program” means the storage tank 3 management account financing program created pursuant to 4 section 455B.472A. 5 NEW SUBSECTION . 10A. “Third-party liability” means any of 6 the following: 7 a. Property damage including physical injury to tangible 8 property, but not including loss of use. Property damage does 9 not include costs to remediate. 10 b. Bodily injury including sickness, physical injury, or 11 death. 12 Sec. 3. NEW SECTION . 455B.472A Storage tank management 13 account financing program. 14 1. The department shall establish and administer a storage 15 tank management account financing program for the purpose of 16 reimbursing eligible claimants for all or part of the costs of 17 corrective action for petroleum releases previously eligible 18 for payment from the Iowa comprehensive petroleum underground 19 storage tank fund pursuant to chapter 455G, Code 2024. 20 2. The department may enter into any agreements and provide 21 any documents, instruments, certificates, data, or information 22 necessary in connection with the operation, administration, 23 and financing of the program consistent with this part 8 of 24 subchapter IV, the federal Resource Conservation and Recovery 25 Act, 42 U.S.C. §6901 et seq., the rules of the commission, and 26 other applicable federal and state law. 27 3. The department may act to conform the program to the 28 applicable guidance and regulations adopted by the United 29 States environmental protection agency. 30 4. The department shall administer the moneys in the account 31 transferred pursuant to this Act to carry out the purposes 32 of the program and shall manage the revenue, administration, 33 restrictions, and disposition of the moneys in the account 34 transferred pursuant to this Act. 35 -2- SF 2414 (5) 90 lh/js/mb 2/ 13

S.F. 2414 5. Moneys in the account transferred pursuant to this Act 1 are appropriated to the department for the purposes set forth 2 in section 455E.11, subsection 2, paragraph “d” , subparagraph 3 (1A). 4 6. Payments for reimbursement or other costs relating to any 5 claim or cause of action in connection with a tank not owned or 6 operated by the state or an agency of the state shall be made 7 solely from the moneys in the account transferred pursuant to 8 this Act and no liability is otherwise imposed upon the state. 9 Moneys from the account transferred pursuant to this Act are 10 limited to the extent of coverage provided by the provisions 11 set forth in section 455E.11, subsection 2, paragraph “d” , 12 subparagraph (1A). A court, an administrative law judge, the 13 department, or the commission shall not order or approve a 14 remedy that would require the account to exceed the account’s 15 then current funding limitations to satisfy an award or that 16 would restrict the availability of moneys for higher priority 17 purposes described in section 455E.11, subsection 2, paragraph 18 “d” , subparagraph (1A), subparagraph division (c). The state 19 is not otherwise liable for a claim related to the account 20 and moneys from the general fund shall not be used to pay for 21 reimbursement or other costs relating to any claim or cause of 22 action in connection with a tank not owned or operated by the 23 state or an agency of the state. 24 Sec. 4. NEW SECTION . 455B.472B Cost recovery enforcement. 25 1. Full recovery sought by department. The department 26 may seek full recovery from an owner, operator, or other 27 potentially responsible party liable for a release that is 28 the subject of a corrective action for which moneys from 29 the account are expended, or for which moneys from the Iowa 30 comprehensive petroleum underground storage tank fund created 31 in section 455G.3, Code 2024, were expended, including for 32 third-party liability and for all other costs. If federal 33 cleanup moneys are recovered, the federal cleanup moneys shall 34 be used solely for the purpose of future cleanup activities. 35 -3- SF 2414 (5) 90 lh/js/mb 3/ 13

S.F. 2414 2. Limitation of liability of owner or operator. Except 1 as provided in subsection 3, the department shall not seek 2 recovery for expenses in connection with corrective action for 3 a release from an owner or operator eligible for assistance 4 under the program, except for any unpaid portion of the 5 deductible or copayment. This subsection does not affect any 6 authorization of the department to impose or collect civil or 7 administrative fines, penalties, or fees. Moneys from the 8 account shall not be used to pay for any third-party liability. 9 3. Owner or operator not in compliance. Notwithstanding 10 subsection 2, the liability of an owner or operator shall be 11 the full and total costs of corrective action and bodily injury 12 or property damage to third parties, as specified in subsection 13 1, if the owner or operator has not complied with the financial 14 responsibility or other underground storage tank rules of 15 the department or with this part 8 of subchapter IV or rules 16 adopted under this part. 17 4. Lien on tank site. Any amount for which an owner or 18 operator is required to pay to the account by statute, rule, 19 contract, or determination of liability by the department after 20 hearing, if not paid when due, shall constitute a lien upon the 21 real property where the tank that was the subject of corrective 22 action is located, and the payment shall be collected in the 23 same manner as the environmental protection charge pursuant to 24 section 424.11, Code 2016. 25 5. Joinder of parties. The department has standing in 26 any case or contested action related to the account or a tank 27 to assert any claim that the department may have regarding 28 the tank at issue in the case or contested action. Upon 29 motion and sufficient showing by a party to a cost recovery or 30 subrogation action provided for under this section, the court 31 or the administrative law judge shall join to the action any 32 potentially responsible party who may be liable for costs and 33 expenditures of the type recoverable pursuant to this section. 34 6. Third-party contracts. An insurance, indemnification, 35 -4- SF 2414 (5) 90 lh/js/mb 4/ 13

S.F. 2414 hold-harmless, conveyance, or similar risk-sharing or 1 risk-shifting agreement shall not be effective to transfer 2 any liability for costs recoverable under this section. The 3 department may proceed directly against the owner, operator, 4 or other potentially responsible party. This subsection does 5 not bar any agreement to insure, hold harmless, or indemnify 6 a party to the agreement for any costs or expenditures under 7 this part 8 of subchapter IV, and does not modify rights 8 between the parties to an agreement, except to the extent the 9 agreement shifts liability to an owner or operator eligible 10 for assistance under the program for any damages or other 11 costs in connection with a corrective action for which another 12 potentially responsible party is or may be liable. Any such 13 provision is void and of no further force and effect. 14 7. Later proceedings permitted against other parties. The 15 entry of judgment against a party to the action does not bar 16 a future action by the department against another person who 17 is later alleged to be or discovered to be liable for costs 18 and expenditures paid from the account. Notwithstanding 19 section 668.5, a potentially responsible party shall not seek 20 contribution or any other recovery from an owner or operator 21 eligible for assistance under the program for damages or other 22 costs in connection with corrective action for a release for 23 which the potentially responsible party is or may be liable. 24 Subsequent successful proceedings against another party shall 25 not modify or reduce the liability of a party against whom 26 judgment has been previously entered. 27 8. Claims against potentially responsible parties. 28 a. Upon payment from the account for corrective action or 29 third-party liability pursuant to this part 8 of subchapter 30 IV, the rights of the claimant to recover payment from any 31 potentially responsible party are assumed by the department to 32 the extent paid from the account. A claimant shall not receive 33 double compensation for the same injury. 34 b. In an action brought pursuant to this part 8 of 35 -5- SF 2414 (5) 90 lh/js/mb 5/ 13

S.F. 2414 subchapter IV seeking damages for corrective action or 1 third-party liability, the court shall allow evidence and 2 argument as to the replacement or indemnification of actual 3 economic losses incurred or to be incurred in the future by the 4 claimant by reason of insurance benefits, governmental benefits 5 or programs, or other sources. 6 c. A claimant may elect to authorize the department 7 to pursue the claimant’s cause of action for any injury 8 not compensated from the fund against any potentially 9 responsible party, provided the attorney general determines 10 such representation would not be a conflict of interest. If 11 a claimant so elects, the department’s litigation expenses 12 shall be shared on a pro rata basis with the claimant, but the 13 claimant’s share of litigation expenses is payable exclusively 14 from any share of the settlement or judgment payable to the 15 claimant. 16 9. Exclusion of punitive damages. Moneys from the account 17 shall not be used to pay punitive damages. 18 Sec. 5. NEW SECTION . 455B.472C Discretionary rulemaking. 19 1. The commission may adopt rules pursuant to chapter 17A 20 conditioning receipt of moneys from the account transferred 21 pursuant to this Act to those petroleum-contaminated properties 22 that present a higher degree of risk to the public health and 23 safety or the environment and providing for denial of moneys 24 from the account transferred pursuant to this Act to a person 25 who did not make a good-faith attempt to comply with this part 26 8 of subchapter IV. This subsection does not confer a legal 27 right to an owner of a petroleum-contaminated property, or an 28 owner or operator of an underground storage tank located on the 29 property, for receipt of moneys under this part 8 of subchapter 30 IV. 31 2. The commission may adopt rules pursuant to chapter 32 17A providing for the transfer of all or a portion of the 33 liabilities relating to the account. Notwithstanding any other 34 provision to the contrary, the department, upon such transfer, 35 -6- SF 2414 (5) 90 lh/js/mb 6/ 13

S.F. 2414 shall not maintain any duty to reimburse claimants for those 1 liabilities transferred. 2 Sec. 6. Section 455B.474, subsection 1, paragraph a, 3 subparagraph (6), subparagraph divisions (g), (i), and (j), 4 Code 2024, are amended to read as follows: 5 (g) An owner or operator may elect to proceed with 6 additional corrective action on the site. However, any 7 action taken in addition to that required pursuant to this 8 subparagraph (6) , shall be solely at the expense of the owner 9 or operator and shall not be considered corrective action 10 for purposes of section 455G.9 455B.472A , unless otherwise 11 previously agreed to by the board department and the owner or 12 operator pursuant to section 455G.9, subsection 7 455B.472A . 13 Corrective action taken by an owner or operator due to the 14 department’s failure to meet the time requirements provided in 15 subparagraph division (e) shall be considered corrective action 16 for purposes of section 455G.9 455B.472A . 17 (i) Replacement or upgrade of a tank on a site classified 18 as a high or low risk site shall be equipped with a secondary 19 containment system with monitoring of the space between the 20 primary and secondary containment structures or other board 21 approved tank system or methodology approved by the department . 22 (j) The commission and the board department shall cooperate 23 to ensure that remedial measures required by the corrective 24 action rules adopted pursuant to this subparagraph (6) are 25 reasonably cost-effective and shall, to the fullest extent 26 possible, avoid duplicating and conflicting requirements. 27 Sec. 7. Section 455B.474, subsection 9, paragraph d, Code 28 2024, is amended to read as follows: 29 d. The certification of groundwater professionals shall 30 not impose liability on the board, the department , or the 31 fund account for any claim or cause of action of any nature, 32 based on the action or inaction of a groundwater professional 33 certified pursuant to this subsection . 34 Sec. 8. Section 455B.474, Code 2024, is amended by adding 35 -7- SF 2414 (5) 90 lh/js/mb 7/ 13

S.F. 2414 the following new subsection: 1 NEW SUBSECTION . 11. Department practices and procedures 2 for implementing and administering the storage tank management 3 account financing program. The rules shall include but 4 are not limited to requirements for program eligibility, 5 investigating and settling claims made against the account, 6 appeal procedures, community remediation, prioritization of 7 account moneys, funding for tank operator training, additional 8 assessment and corrective action arising out of releases at 9 sites for which a certificate of no further action has been 10 issued, and reimbursement for the permanent closure of an 11 underground storage tank system. 12 Sec. 9. Section 455B.477, subsection 7, Code 2024, is 13 amended to read as follows: 14 7. The civil penalties or other damages or moneys recovered 15 by the state or the petroleum underground storage tank fund in 16 connection with a petroleum underground storage tank under this 17 part 8 of subchapter IV or chapter 455G shall be credited to 18 the fund created in section 455G.3 and allocated between fund 19 accounts according to the fund budget. Any federal moneys, 20 including but not limited to federal underground storage tank 21 trust fund moneys, received by the state or the department of 22 natural resources in connection with a release occurring on 23 or after May 5, 1989, or received generally for underground 24 storage tank programs on or after May 5, 1989, shall be 25 credited to the fund account created in section 455G.3 and 26 allocated between fund accounts according to the fund budget 27 455E.11, subsection 2, paragraph “d” , unless such use would 28 be contrary to federal law. The department shall cooperate 29 with the board of the Iowa comprehensive petroleum underground 30 storage tank fund to maximize the state’s eligibility for and 31 receipt of federal funds for underground storage tank related 32 purposes. 33 Sec. 10. Section 455E.11, subsection 2, paragraph d, 34 unnumbered paragraph 1, Code 2024, is amended to read as 35 -8- SF 2414 (5) 90 lh/js/mb 8/ 13

S.F. 2414 follows: 1 A storage tank management account. All The account shall 2 consist of moneys appropriated to, transferred to, or deposited 3 in the account, including fees collected pursuant to section 4 455B.473, subsection 5 , section 455B.477, subsection 7, and 5 section 455B.479 , shall be deposited in the storage tank 6 management account . Moneys deposited in the account shall be 7 expended for all of the following purposes: 8 Sec. 11. Section 455E.11, subsection 2, paragraph d, Code 9 2024, is amended by adding the following new subparagraph: 10 NEW SUBPARAGRAPH . (1A) Moneys transferred under this Act to 11 the account are appropriated for the following purposes until 12 such moneys are fully expended: 13 (a) For reimbursement to tank owners or operators for all 14 or part of the costs of a corrective action for a petroleum 15 release. 16 (b) For the annual appropriation to the department 17 of agriculture and land stewardship in the amount of two 18 hundred fifty thousand dollars for the purpose of inspecting 19 fuel quality at pipeline terminals and renewable fuel 20 production facilities, including associated salaries, support, 21 maintenance, and miscellaneous purposes. 22 (c) For permanent closure of an underground storage tank 23 system under a remedial program pursuant to chapter 455B, 24 subchapter IV, part 8, for additional assessment and corrective 25 action arising out of releases at sites for which a certificate 26 of no further action has been issued, and for tank operator 27 training. At least three million dollars of the total moneys 28 expended pursuant to this subparagraph shall be expended for 29 the purposes described in this subparagraph division, but not 30 more than fifty thousand dollars shall be utilized for operator 31 training each fiscal year. 32 Sec. 12. Section 455E.11, subsection 2, paragraph d, 33 subparagraph (2), Code 2024, is amended to read as follows: 34 (2) The moneys remaining in the account after the 35 -9- SF 2414 (5) 90 lh/js/mb 9/ 13

S.F. 2414 appropriation appropriations in subparagraph subparagraphs (1) 1 and (1A) are appropriated from the storage tank management 2 account to the department of natural resources for the 3 administration of a state storage tank program pursuant to 4 chapter 455B, subchapter IV, part 8 , and for programs which 5 that reduce the potential for harm to the environment and the 6 public health from storage tanks. 7 Sec. 13. REPEAL. Sections 455G.1, 455G.2, 455G.2A, 455G.3, 8 455G.4, 455G.5, 455G.6, 455G.7, 455G.8, 455G.9, 455G.12, 9 455G.12A, 455G.13, 455G.14, 455G.15, 455G.16, 455G.20, and 10 455G.21, Code 2024, are repealed. 11 DIVISION II 12 CONFORMING CHANGES 13 Sec. 14. Section 68B.35, subsection 2, paragraph e, Code 14 2024, is amended to read as follows: 15 e. Members of the state banking council, the Iowa ethics and 16 campaign disclosure board, the credit union review board, the 17 economic development authority, the employment appeal board, 18 the environmental protection commission, the health facilities 19 council, the Iowa finance authority, the Iowa public employees’ 20 retirement system investment board, the Iowa lottery board 21 created in section 99G.8 , the natural resource commission, 22 the board of parole, the petroleum underground storage tank 23 fund board, the public employment relations board, the state 24 racing and gaming commission, the state board of regents, the 25 transportation commission, the office of consumer advocate, the 26 utilities board, the Iowa telecommunications and technology 27 commission, and any full-time members of other boards and 28 commissions as defined under section 7E.4 who receive an annual 29 salary for their service on the board or commission. The Iowa 30 ethics and campaign disclosure board shall conduct an annual 31 review to determine if members of any other board, commission, 32 or authority should file a statement and shall require the 33 filing of a statement pursuant to rules adopted pursuant to 34 chapter 17A . 35 -10- SF 2414 (5) 90 lh/js/mb 10/ 13

S.F. 2414 Sec. 15. Section 323.1, subsection 16, Code 2024, is amended 1 to read as follows: 2 16. “Storage tank” means a motor fuel storage tank as 3 defined in section 214.1 , including an underground storage 4 tank subject to regulation under chapter 455G 455B, subchapter 5 IV, part 8, section 455E.11, subsection 2, paragraph “d” , 6 subparagraph (1A), or section 455G.31 . 7 Sec. 16. Section 422.7, subsection 2, paragraph u, Code 8 2024, is amended by striking the paragraph. 9 Sec. 17. Section 455B.174, subsection 4, paragraph d, Code 10 2024, is amended to read as follows: 11 d. If a public water supply has a groundwater source 12 that contains petroleum, a fraction of crude oil, or their 13 degradation products, or is located in an area deemed by the 14 department as likely to be contaminated by such materials, and 15 after consultation with the public water supply system and 16 consideration of all applicable rules relating to remediation, 17 the department may require the public water supply system to 18 replace that groundwater source in order to receive a permit 19 to operate. The requirement to replace the source shall only 20 be made by the department if the public water supply system 21 is fully compensated for any additional design, construction, 22 operation, and monitoring costs from the Iowa comprehensive 23 petroleum underground storage tank fund created by chapter 24 455G or from any other funds that do not impose a financial 25 obligation on the part of the public water supply system. 26 Funds available to or provided by the public water supply 27 system may be used for system improvements made in conjunction 28 with replacement of the source. The department cannot require 29 a public water supply system to replace its water source with a 30 less reliable water source or with a source that does not meet 31 federal primary, secondary, or other health-based standards 32 unless treatment is provided to ensure that the drinking water 33 meets these standards. Nothing in this paragraph shall affect 34 the public water supply system’s right to pursue recovery from 35 -11- SF 2414 (5) 90 lh/js/mb 11/ 13

S.F. 2414 a responsible party. 1 Sec. 18. Section 455E.11, subsection 2, paragraph d, 2 subparagraph (3), Code 2024, is amended by striking the 3 subparagraph. 4 Sec. 19. Section 455I.2, subsection 5, paragraph a, Code 5 2024, is amended to read as follows: 6 a. A federal or state program that is subject to the 7 jurisdiction of an agency, including but not limited to 8 programs established by chapters 455B and 455G 455E , corrective 9 or response actions pursuant to 42 U.S.C. §6901 et seq., and 10 remedial actions under 42 U.S.C. §9601 et seq. 11 Sec. 20. REPEAL. Sections 427B.20, 427B.21, and 427B.22, 12 Code 2024, are repealed. 13 DIVISION III 14 TRANSITION PROVISIONS 15 Sec. 21. TRANSITION PROVISIONS. 16 1. Upon repeal of sections 455G.1, 455G.2, 455G.2A, 455G.3, 17 455G.4, 455G.5, 455G.6 455G.7, 455G.8, 455G.9, 455G.12, 18 455G.12A, 455G.13, 455G.14, 455G.15, 455G.16, 455G.20, 19 and 455G.21, pursuant to this Act, all moneys in all funds 20 administered by the Iowa comprehensive petroleum underground 21 storage tank fund board are transferred to the treasurer of 22 state for deposit in the storage tank management account 23 created in the groundwater protection fund created in section 24 455E.11. Any moneys credited to any fund administered by the 25 Iowa comprehensive petroleum underground storage tank fund 26 board on and after the effective date of divisions I and II 27 of this Act are transferred to the treasurer of state for 28 deposit in the storage tank management account created in the 29 groundwater protection fund created in section 455E.11. 30 2. Any rule, regulation, form, order, or directive 31 promulgated by the Iowa comprehensive petroleum underground 32 storage tank fund board as required to administer and enforce 33 the provisions relating to the Iowa comprehensive petroleum 34 underground storage tank fund shall continue in full force 35 -12- SF 2414 (5) 90 lh/js/mb 12/ 13

S.F. 2414 and effect under the jurisdiction of the department of 1 natural resources until amended, repealed, or supplemented by 2 affirmative action of the department. 3 3. Any remaining liabilities, contracts, outstanding 4 claims, payments, or other obligations for open claims from 5 the comprehensive petroleum underground storage tank fund 6 existing on or before the effective date of divisions I and II 7 of this Act shall continue in full force and effect under the 8 jurisdiction of the department of natural resources. A claim 9 for a release filed on or after the effective date of divisions 10 I and II of this Act shall not be eligible for payment from the 11 Iowa comprehensive petroleum underground storage tank fund. 12 4. The department of natural resources may begin 13 implementation of subsections 2 and 3 prior to the effective 14 date of divisions I and II of this Act, to the extent necessary 15 to transition to full implementation of the provisions 16 relating to the storage tank management account created in the 17 groundwater protection fund created in section 455E.11 and 18 repeal of the Iowa comprehensive petroleum underground storage 19 tank fund created in section 455G.3, Code 2024. 20 5. All property tax credits provided under chapter 427B, 21 subchapter IV, existing upon the repeal of sections 427B.20, 22 427B.21, and 427B.22 shall continue until their expiration. 23 Sec. 22. EFFECTIVE DATE. This division of this Act, being 24 deemed of immediate importance, takes effect upon enactment. 25 -13- SF 2414 (5) 90 lh/js/mb 13/ 13