# Title 23.1 — Environmental Quality

## Chapter 23.1-12 — Petroleum Release Remediation

### § 23.1-12-01. Petroleum tank release compensation fund - Established.

A petroleum tank release compensation fund is established.
### § 23.1-12-02. Definitions.

As used in this chapter, unless the context otherwise requires:
1. "Actually incurred" means, in the case of corrective action expenditures, the owner,
operator, landowner, an insurer, or a contractor hired by the owner, operator, or the
landlord has expended time and materials, and only that person is receiving
reimbursement from the fund.
2. "Board" means the petroleum release compensation board.
3. "Corrective action" means an action required by the department to minimize, contain,
eliminate, remediate, mitigate, or clean up a release, including any remedial
emergency measures. The term does not include the repair or replacement of
equipment or preconstructed property.
4. "Dealer" means a person licensed by the tax commissioner to sell motor vehicle fuel or
special fuels within the state.
5. "Department" means the department of environmental quality.
6. "Electric energy conversion facility" means a plant, addition, or combination of a plant
and addition, designed for or capable of wind energy generation, or any means of
energy generation, and the plant associated facilities.
7. "Electric transmission related facility" means an electric transmission line and
associated facilities designed for transmission of generated electricity, or a facility used
for utility-scale storage of electricity and connected or adjacent to an electric
transmission facility or facility controlled by or serving a utility with electric energy
transmission, and distribution equipment and materials.
8. "Fund" means the petroleum release compensation fund.
9. "Location" means a physical address or site that has contiguous properties.
Noncontiguous properties within a municipality or other governmental jurisdiction are
considered separate locations.
10. "Midstream facility" means a facility that receives petroleum products by pipeline or by
truck. The term does not include a retailer or end user.
11. "Operator" means a person in control of, or having responsibility for, the daily
operation of a tank under this chapter.
12. "Owner" means a person who holds title to, controls, or possesses an interest in the
tank before the discontinuation of its use.
13. "Petroleum" means any of the following:
a. Gasoline and petroleum products as defined in chapter 23.1-13.
b. Constituents of gasoline and fuel oil under subdivision a.
c. Oil sludge and oil refuse.
14. "Portable tank" means a storage tank along with its piping and wiring that is not
stationary or affixed, including a tank that is on skids.
15. "Release" means any unintentional spilling, leaking, emitting, discharging, escaping,
leaching, or disposing of petroleum from a tank into the environment whether occurring
before or after the effective date of this chapter, but does not include discharges or
designed venting allowed under federal or state law or under adopted rules.
16. "Tank" means any one or a combination of containers, vessels, and enclosures,
whether aboveground or underground, including associated piping or appurtenances
used to contain an accumulation of petroleum, ethanol, or biodiesel. The term does not
include:
a. Tanks owned by the federal government.
b. Tanks used for the transportation of petroleum.
c. A pipeline facility, including gathering lines and breakout tanks:
(1) Regulated under the Natural Gas Pipeline Safety Act of 1968.

(2) Regulated under the Hazardous Liquid Pipeline Safety Act of 1979.
(3) Regulated under state laws comparable to the provisions of law in
paragraph 1 or 2, if the facility is an interstate pipeline facility.
(4) Regulated under title 49, Code of Federal Regulations, part 195.
d. An underground farm or residential tank with a capacity of one thousand one
hundred gallons [4163.94 liters] or less or an aboveground farm or residential
tank of any capacity used for storing motor fuel for noncommercial purposes.
However, the owner of an aboveground farm or residential tank may, upon
application, register the tank and be eligible for reimbursement under this chapter.
e. A tank used for storing heating oil for consumptive use on the premises where
stored.
f. A surface impoundment, pit, pond, lagoon, storm water collection system, or
wastewater collection system.
g. A flowthrough process tank or vapor recovery unit tank.
h. A tank, liquid trap, gathering lines, or other facility associated with the exploration,
development, or production of oil, gas, or geothermal resources under title 38.
i. A storage tank situated in an underground area such as a basement, cellar, mine
working, drift, shaft, or tunnel, if the storage tank is situated upon or above the
surface of the floor.
j. A tank used for the storage of propane.
k. A tank used to fuel or service rail locomotives, rail equipment, or surface coal
mining equipment.
l. An aboveground tank used to feed diesel fuel generators. Upon application, the
owner or operator of an aboveground tank used to feed diesel fuel generators
may register the tank and is eligible for reimbursement under this chapter.
m. A portable tank.
n. A tank with a capacity under one thousand three hundred twenty gallons
[4996.728 liters] used to store lubricating oil.
o. A tank used to store ethanol or biodiesel for wholesale purposes with a capacity
of greater than twenty thousand gallons [75708.24 liters].
p. A tank that is located at or is part of a terminal, midstream facility, petrochemical
plant, syngas plant, fertilizer plant, petroleum or renewable fuels refinery, electric
energy conversion facility, or electric transmission related facility, including
associated transloading facility.
q. An asphalt tank.
r. A septic tank.
17. "Tank integrity test" means a test to determine that a tank is sound and not leaking.
For an underground tank, the term means a certified third-party test that meets
environmental protection agency leak detection requirements. For an aboveground
tank, the term means a test conducted according to steel tank institute SP 001 or
American petroleum institute 653.
18. "Terminal" means a refined petroleum product storage and distribution facility that is
supplied directly by pipeline and from which the refined petroleum product may be
removed from the rack.
19. "Third party" means a person who is damaged by the act of a registered owner,
operator, or dealer requiring corrective action, or a person who suffers bodily injury or
property damage caused by a petroleum release.
20. "Utility" means a person engaged in and controlling electric generation, the
transmission of electric energy, or the transmission of water from or to any electric
energy conversion facility.
### § 23.1-12-03. Petroleum release compensation board.

The petroleum release compensation advisory board shall review claims against the fund.
The board consists of five members appointed by the governor, three of whom are active in
petroleum marketing; one of whom is active in the petroleum, crude oil, or refining industry; and
one of whom is active in the insurance industry. A member active in petroleum marketing must

be appointed from a list of three recommended by the North Dakota retail petroleum marketers
association. A member active in the petroleum, crude oil, or refining industry must be appointed
from a list of three recommended by the North Dakota petroleum council. A member active in
the insurance industry must be appointed from a list of three recommended by the North Dakota
professional insurance agents association. Members must be appointed to terms of three years
with the terms arranged so the term of at least one member, but no more than two members,
expires June thirtieth of each year. A member shall hold office until a successor is duly
appointed and qualified. Each member of the board is entitled to receive sixty-two dollars and
fifty cents per diem for each day actually spent in the performance of official duties, plus mileage
and expenses as allowed to other state officers.
### § 23.1-12-04. Administration of fund - Staff.

The department shall administer the fund according to this chapter. The department shall
convene the board as may be necessary to keep the board apprised of the fund's general
operations. However, the board shall meet at least once each half of each calendar year to
review and to advise the department regarding the administration of the fund, the fund's general
operations, and to hear and decide denials of claims by the department which may be appealed
to the board, and to discuss all claims against the fund. The department may employ any
assistance and staff necessary to administer the fund within the limits of legislative
appropriation. A claimant aggrieved by a decision of the department regarding a claim upon the
fund may appeal the decision to the board. The board may sustain, modify, or reverse the
decision of the department. The claimant or the department may appeal the board's decision
under chapter 28-32.
### § 23.1-12-05. Adoption of rules.

The department shall adopt rules regarding the practices and procedures of the fund, the
form and procedure for applications for compensation from the fund, procedures for
investigation of claims, procedures for determining the amount and type of costs that are eligible
for reimbursement from the fund, procedures for persons to perform services for the fund,
procedures for appeals to the board by claimants aggrieved by an adverse decision of the
department, and any other rules as may be appropriate to administer this chapter.
### § 23.1-12-06. Release discovery.

If the department has reason to believe a release has occurred, it shall direct the owner or
operator to take reasonable and necessary corrective actions as provided under federal or state
law or under adopted rules.
### § 23.1-12-07. Owner or operator not identified.

The department may cause legal action to be brought to compel performance of a
corrective action if an identified owner or operator fails or refuses to comply with an order of the
department, or the department may engage the services of qualified contractors for
performance of a corrective action if an owner or operator cannot be identified.
### § 23.1-12-08. Imminent hazard.

Upon receipt of information that a petroleum release has occurred which may present an
imminent or substantial endangerment of health or the environment, the department may take
emergency action necessary to protect health or the environment.
### § 23.1-12-09. Duty to notify.

This chapter does not limit a person's duty to notify the department and to take action
related to a release. However, payment for corrective actions required as a result of a petroleum
release is governed by this chapter.

### § 23.1-12-10. Providing of information.

A person the department has reason to believe is an owner or operator, the owner of real
property where corrective action is ordered to be taken, or a person that may have information
concerning a release shall, if requested by the department, or any member, employee, or agent
of the department, furnish to the department any information that person has or may reasonably
obtain which is relevant to the release.
### § 23.1-12-11. Examination of records.

Any employee of the department may, upon presentation of official credentials:
1. Examine and copy books, papers, records, memoranda, or data of any person that
has a duty to provide information to the department under section 23.1-12-10; and
2. Enter upon public or private property to take action authorized by this section,
including obtaining information from a person that has a duty to provide the information
under section 23.1-12-10, conducting surveys and investigations, and taking corrective
action.
### § 23.1-12-12. Responsibility for cost.

The owner or operator is liable for the cost of the corrective action required by the
department, including the cost of investigating the releases. This chapter does not create any
new cause of action for damages on behalf of third parties for release of petroleum products
against the fund or licensed dealers.
### § 23.1-12-13. Liability avoided.

An owner or operator may not avoid liability by means of a conveyance of any right, title, or
interest in real property or by any indemnification, hold harmless agreement, or similar
agreement. However, this chapter does not:
1. Prohibit a person that may be liable from entering an agreement by which the person
is insured or is a member of a risk retention group, and is thereby indemnified for part
or all of the liability;
2. Prohibit the enforcement of an insurance, hold harmless, or indemnification
agreement; or
3. Bar a claim for relief brought by a person that may be liable or by an insurer or
guarantor, whether by right of subrogation or otherwise.
### § 23.1-12-14. Other remedies.

This chapter does not limit the powers of the department, or preclude the pursuit of any
other administrative, civil, injunctive, or criminal remedies by the department or any other
person. Administrative remedies need not be exhausted to proceed under this chapter. The
remedies provided by this chapter are in addition to those provided under existing statutory or
common law.
### § 23.1-12-15. Revenue to the fund.

Revenue from the following sources must be deposited in the state treasury and credited to
the fund:
1. Any fees collected under section 23.1-12-17;
2. Any money recovered by the fund under section 23.1-12-23, and any money paid
under an agreement, stipulation, or settlement;
3. Any interest attributable to investment of money in the fund; and
4. Any money received by the department in the form of gifts, grants, reimbursements, or
appropriations from any source intended to be used for the purposes of the fund.
### § 23.1-12-16. Penalty.

A tank owner violating section 23.1-12-17 is guilty of a class B misdemeanor unless another
penalty is specifically provided.

### § 23.1-12-17. Registration fee.

1. Upon the recommendation and approval of the petroleum tank release compensation
fund board, the department shall classify tanks with respect to degree of hazard,
determine the risks of each classification, and fix the registration fee for each
classification at a rate sufficient to provide for:
a. The payment of the expenses of administration of the fund;
b. The reimbursement for corrective action provided under this chapter; and
c. The maintenance by the fund of adequate reserves and surplus so the fund may
be kept solvent at all times.
2. The department shall establish the schedule of registration fees by rules adopted in
accordance with chapter 28-32.
3. An owner or operator of an existing tank that is discovered at a location that currently
and previously has had tanks registered with the fund shall pay an additional
twenty-five dollar penalty fee in addition to the registration fee for each aboveground
tank and each underground tank owned or operated by that person for each previous
year that the tank was required to be registered for which a fee was not paid. The
payment includes the fees and the penalty for the failure to register.
4. An owner or operator of an existing tank at a location that was not previously and
continuously registered with the fund, whether the registration was required by law or
not must provide the fund with a phase two environmental study conducted by a
qualified firm according to American society for testing materials standards. A tank
integrity test must also be performed. The environmental study and tank integrity test
must be reviewed by the department along with the application for registration with the
fund. If the department rejects the application, the applicant is denied eligibility to the
fund. However, if the site is remediated and the leaking tank is replaced, the applicant
may reapply for registration with the fund. A new installation that is using a used tank
must provide tank integrity test results for the used tank. Use of a synthetic liner in an
aboveground dike system negates the need for a tank integrity test. The owner or
operator of a new tank at a new site or a new tank at an existing site that had a tank
registered at the site previously need only pay the required fees for registration with
the fund.
5. If accepted for registration with the fund, the owner or operator of the tank shall pay an
additional twenty-five dollar penalty fee in addition to the registration fee for each
aboveground tank and underground tank owned or operated by that person for each
previous year that the tank was required to be registered for which a fee was not paid,
regardless of ownership in each of those years. The payment includes the fees and
the penalty for the failure to register.
6. The registration fees collected under this section must be paid to the department for
deposit in the state treasury for the dedicated credit to the petroleum release
compensation fund.
7. If a registration payment is not received within sixty days of the date required under
rules adopted by the department, a late fee of twenty-five dollars per tank per month
must be imposed on the tank owner or operator.
### § 23.1-12-17.1. Registration fees before adoption of rules.

Expired under S.L. 2019, ch. 24, § 34.
### § 23.1-12-18. Reimbursement for corrective action.

1. The department shall reimburse an eligible owner or operator for ninety percent of the
costs of corrective action, including the investigation, which are greater than five
thousand dollars and less than one million dollars per occurrence and two million
dollars in the aggregate. An eligible tank owner or operator may not be liable for more
than twenty thousand dollars out-of-pocket expenses for any one release. A
reimbursement may not be made unless the department determines that:
a. At the time the release was discovered, the tank was in substantial compliance
with all applicable rules of the United States environmental protection agency, the

state fire marshal, and the department. The department shall determine
substantial compliance by considering:
(1) The purposes of this chapter;
(2) The adverse effect that any violation of the rules may have had on the tank,
thereby causing or contributing to the release; and
(3) The extent of the remedial action required;
b. The department was given notice of the release as required by federal and state
law;
c. The owner or operator has paid the first five thousand dollars of the cost of
corrective action; and
d. The owner or operator, to the extent possible, fully cooperated with the
department in responding to the release.
2. The fund shall compensate third parties for corrective action taken for a petroleum
release if the provisions of subdivisions a, b, c, and d of subsection 1 were met at the
time the release was discovered. Compensation for third-party corrective action
includes compensation for costs incurred in returning the real estate to that level
deemed duly remediated by the department.
3. The fund shall reimburse the tank owner, operator, or dealer for bodily injuries to a
third party caused by a petroleum release if the provisions of subdivisions a, b, c, and
d of subsection 1 were met at the time the release was discovered in an amount
determined by:
a. Findings reduced to judgment in federal or state district court or such other court
having jurisdiction over the matter in a proceeding in which the fund has been
made a party;
b. Findings by an arbitration panel agreed upon in writing by the parties in a
proceeding in which the fund has been made a party; or
c. A written settlement entered into by the parties in which the director of the
department or the department's agent has participated. The settlement must be
reviewed and approved by the director of the department.
4. In any civil action against the owner, operator, or dealer for damages resulting from a
petroleum release, if the pre-leak condition of real estate is an issue, and if there is no
reasonable means of determining the pre-leak condition of real estate, the condition is
that which exists at the time the department determines the real estate has been duly
remediated.
5. The fund may not compensate for attorney's fees of owners, operators, or dealers, nor
may the fund compensate for exemplary damages, criminal fines, or administrative
penalties.
6. A third party accepting monetary compensation directly from the fund for damages due
to a release caused by a tank owner, operator, or dealer covered by the fund is
deemed to have waived any cause of action against the fund or against the tank
owner, operator, or dealer.
7. The fund shall reimburse the department for all costs, attorney's fees, and other legal
expenses relating to administrative and adjudicative proceedings under this chapter
and any subsequent legal proceeding. Any moneys reimbursed must be deposited in
the department's operating fund in the state treasury and must be spent subject to
appropriation by the legislative assembly.
### § 23.1-12-19. Application for reimbursement.

An owner or operator that is a first-party claimant and that proposes to take corrective
action or has undertaken corrective action in response to a release, the time of the release
being unknown, may apply to the department for partial or full reimbursement under section
### § 23.1-12-18. An owner or operator who is a first-party claimant may be reimbursed only for costs

incurred after July 1, 1989, even if the releases were discovered before July 1, 1989, up to the
maximum of twenty-five thousand dollars per location.

### § 23.1-12-20. Department to determine costs.

A reimbursement for corrective actions taken by an owner, operator, or dealer may not be
made from the fund until the department has determined that the costs for which reimbursement
is requested were actually incurred and were reasonable. All necessary loss adjustment
expenses must be included as a component of the loss and must be paid out of the fund.
### § 23.1-12-21. Liability of responsible person.

The right to apply for reimbursement and the receipt of reimbursement does not limit the
liability of an owner or operator for damages or costs incurred as the result of a release.
### § 23.1-12-22. Reimbursement not subject to attachment.

The amount of reimbursement to be paid for corrective action that was done by a third party
is not subject to legal process or attachment if actually paid to a third party that performed the
corrective action.
### § 23.1-12-23. Recovery of expenses.

Any reasonable and necessary expenses incurred by the fund, which exceed the coverage
limits provided by section 23.1-12-18, in taking a corrective action, including costs of
investigating a release, and in taking legal actions, may be recovered in a civil action in district
court brought by the department against an owner or operator. The certification of expenses by
an approved agent of the fund is prima facie evidence that the expenses are reasonable and
necessary. Any expenses that are recovered under this section must be deposited in the fund.
### § 23.1-12-24. Costs exceeding reimbursement.

If the cost of any extraordinary authorized action under this chapter exceeds amounts
awarded to the department from the federal government, the department may pay the
department's corrective actions costs, including the cost of investigating a release, if the board
finds that the cause was a petroleum substance, that an adequate amount exists in the fund to
pay for the corrective action, that the occurrence was extraordinary in scope and size, and that
a danger to the health and safety of citizens exists.
### § 23.1-12-25. Coordination of benefits.

If an owner or operator has an insurance policy that provides the same coverage as the
fund, the department shall pay the share of the covered loss or damage for which the fund is
responsible. The share that must be paid from the fund is equal to the proportion that the
applicable limit of coverage under the fund bears to the limits of insurance of all insurance
coverage on the same basis.
### § 23.1-12-26. Third-party damages - Participation in actions and review of settlements.

1. An owner or operator sued for damages resulting from a release shall notify the
department within fourteen days of being served with a summons and complaint. The
owner or operator also shall advise the department if any insurer is defending the
owner or operator and provide to the department the name of that insurer.
2. An owner or operator that, before litigation, enters negotiations with a third party that
claims to have been damaged by a release, or that receives a demand for payment of
damages to a third party that claims to have been damaged by a release, shall notify
the department within fourteen days of the demand or the negotiations.
3. The department and the board shall review the conduct of any litigation or negotiation.
The department may not assume any legal costs incurred by the defendant or plaintiff,
but may participate in discovery, trial proceedings, or settlement negotiations of either
disputed liability or damages that bear on the determination of a plaintiff's damages.
4. The department and the board shall review any settlement negotiations to determine
the dollar amount of bodily injury or property damage actually, necessarily, and
reasonably incurred by third parties which, if paid by the defendant, would be
considered eligible costs.

### § 23.1-12-27. Third-party damages - Documentation.

1. An applicant's payments for third-party damages pursuant to a judgment entered in a
court must include copies of the notice of entry of judgment and abstract of costs.
2. An applicant's payments for third-party damages made by agreement in settlement of
litigation must include copies of the settlement agreement and supporting documents
required by the department.
3. An applicant's payments for third-party damages made by agreement without
reference to litigation must include copies of the settlement and supporting documents
required by the department.
4. The department and the board may require a third party who claims bodily injury to be
examined by a physician and require that the physician's report to be submitted to the
department. The department may require a third party that claims property damage to
permit a property appraiser or claims adjuster retained by the department to inspect
the property and report to the department.
5. The fund shall pay a judgment against an owner, operator, or dealer awarded to a third
party as a result of a third-party claim and property damage against an owner,
operator, or dealer registered by the fund.
6. The fund shall pay for corrective action as awarded to a third party in any judgment
against an owner, operator, or dealer.
7. Liability of the tank owner, operator, dealer, or fund to third parties for corrective action
or personal injuries and property damage may not exceed, per person, one million
dollars. Maximum liability of the fund, including all claims by third parties, may not
exceed, for any release site, the maximum provided in section 23.1-12-18.
8. A third party may not bring an action against an owner, operator, or dealer more than
three years after a corrective action plan has been approved by the department if the
owner, operator, or dealer fully implements and complies with the corrective action
plan.
9. In investigating a release site or reviewing the implementation of a corrective action
plan approved by the department, the department shall determine whether the release
threatens public health or the environment. The department shall require, based on
science and technology appropriate for the site, any monitoring, remediation, or other
appropriate corrective action that is reasonably necessary to protect public health or
the environment. The department may require corrective action at a release site at any
time after a release occurs.
### § 23.1-12-28. Matching federal funds.

The department and the board may annually allow the department a ten percent matching
grant for federal leaking underground storage tank funds to be paid out of the fund if the moneys
are available and the department and the board determine the allowance appropriate.
### § 23.1-12-29. Fund appropriations.

Money in the fund is continuously appropriated to the department for the purpose of making
reimbursements under this chapter.
### § 23.1-12-30. Investment of fund.

Investment of the fund is under the supervision of the state investment board in accordance
with chapter 21-10. The department may purchase a contract for reinsurance of any risk to be
paid by the fund. The department may investigate the purchase of insurance that reimburses an
owner or operator for property damage claims by third parties other than claims for costs of
corrective action.
