West Plains Electric Cooperative, Inc. v. Petroleum Tank Release Compensation Fund

489 N.W.2d 337, 1992 N.D. LEXIS 162, 1992 WL 175257
CourtNorth Dakota Supreme Court
DecidedJuly 28, 1992
DocketCiv. No. 920050
StatusPublished

This text of 489 N.W.2d 337 (West Plains Electric Cooperative, Inc. v. Petroleum Tank Release Compensation Fund) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
West Plains Electric Cooperative, Inc. v. Petroleum Tank Release Compensation Fund, 489 N.W.2d 337, 1992 N.D. LEXIS 162, 1992 WL 175257 (N.D. 1992).

Opinion

ERICKSTAD, Chief Justice.

West Plains Electric Cooperative, Inc., appeals from the judgment of the District Court for Burleigh County affirming the order of the Commissioner of Insurance denying West Plains’ application for reimbursement from the Petroleum Tank Release Compensation Fund for costs associated with cleaning up a petroleum spill. We reverse.

West Plains Electric Cooperative, Inc., is an electrical power distribution cooperative. As part of its operations, West Plains operated an aboveground tank in which petroleum and pentachlorophenol were stored. West Plains discontinued using the tank in September of 1986 and had the tank re[338]*338moved in June of 1988. However, unbeknown to West Plains and prior to its discontinued use in September of 1986, the aboveground tank released petroleum and pentachlorophenol into the surrounding environment. This release was discovered in August of 1989 as West Plains began a planned excavation and removal of two underground tanks which were situated directly below the aboveground tank. On October 17, 1989, and again on May 31, 1990, West Plains applied for Fund reimbursement for the cleanup costs associated with the release. The Fund denied West Plains’ applications for reimbursement for the reason that the tank in question was not registered with the Fund at the time the release was discovered. West Plains subsequently attempted to “retroactively” register the tank. However, the Fund refused to register the aboveground tank and the two underground tanks which were removed. West Plains thereafter sought further administrative review. The matter was submitted to an independent hearing officer who determined that West Plains was not entitled to participate in the Fund because the tank in question was not registered with the Fund at the time the release was discovered. The Commissioner of Insurance affirmed the hearing officer’s recommendations and West Plains thereafter sought judicial review. On February 5, 1992, the district court affirmed the Commissioner of Insurance’s order. This appeal followed.

In 1989, the Legislative Assembly created the Petroleum Release Compensation Fund. See 1989 S.L. ch. 341.1 This fund was designed to reimburse eligible owners and operators of petroleum tanks for certain costs associated with the cleanup of petroleum spills. The creation of the Fund was partly in response to petroleum tank owners’ and operators’ inability to comply with increasingly stringent federal financial responsibility regulations through the purchase of commercial pollution liability insurance.2

[339]*339The Act creating the Fund named the manager of the State Fire and Tornado Fund under the Commissioner of Insurance as the administrator of the Fund. The administrator was charged with administering the Fund and adopting rules regarding its practices and procedures. The Fund was primarily financed through a nine-fortieths of a cent per gallon tax on gasoline and other petroleum products. The tax was to remain in effect until the Fund accumulated three million dollars, and was to be reinstated if the Fund fell below one million dollars.

As both parties assert, our task in this case is one of construing the 1989 legislation establishing the Petroleum Release Compensation Fund. Specifically, we must determine whether or not West Plains is entitled to reimbursement from the Fund and, relatedly, whether or not the Fund’s promulgation of section 45-10-01-06, N.D.Admin.Code (1990), was statutorily authorized.3

In construing legislation, “[o]ur duty is to ascertain the intent of the Legislature.” County of Stutsman v. State Historical Soc., 371 N.W.2d 321, 325 (N.D.1985). Although a “statute must be considered as a whole to determine the intent of the Legislature^] [t]he Legislature’s intent must be sought initially from the statutory language.” Id. “If the language of a statute is clear and unambiguous, the letter of the statute cannot be disregarded under the pretext of pursuing its spirit because the legislative intent is presumed clear from the face of the statute.” Id.; section 1-02-05, N.D.C.C.

Section 22 of the 1989 Act reads:

“Reimbursement for corrective action. The administrator shall reimburse an eligible owner or operator for ninety percent of the costs of corrective action, including the investigation, which are greater than seven thousand five hundred dollars and less than one hundred thousand dollars. A reimbursement may not be made unless the administrator determines that:
1. At the time of release, the owner or operator and the tank were in com[340]*340pliance with state and federal rules and rules applicable to the tank, including rules relating to financial responsibility which were in effect at the time of the release;
2. The department was given notice of the release as required by federal and state law;
3. The owner or operator has paid the first seven thousand five hundred dollars of the cost of corrective action; and
4. The owner or operator, to the extent possible, fully cooperated with the department and the administrator in responding to the release.”

Section 23 of the 1989 Act reads:

“Application for reimbursement. Any owner or operator who proposes to take corrective action or has undertaken corrective action in response to a release, the time of such release being unknown, may apply to the administrator for partial or full reimbursement under section 22 of this Act. An owner or operator may be reimbursed only for releases discovered and reported after the effective date of this Act.”

Section 2(11) of the 1989 Act defines “release” as follows:

“11. ‘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 Act, but does not include discharges or designed venting allowed under federal or state law or under adopted rules.”

Section 21 of the 1989 Act reads:

“Registration fee. An owner or operator of a tank shall pay an annual registration fee of ten dollars for each above-ground tank and twenty-five dollars for each underground tank owned or operated by that person. The registration fees collected under this section must be paid to the administrator for deposit in the state treasury for credit to the petroleum release compensation fund.”

On appeal, the Fund asserts that the above provisions of the Act, when read together, implicitly require registration pri- or to discovery of a release in order to be eligible for reimbursement.4 A contrary interpretation, the Fund asserts, would render the registration requirements of section 21 meaningless because there would then be no incentive to register. However, such an assertion first overlooks the incentive from the criminal penalty provision in section 20 of the Act.5 Also, section 22 requires that, at the time of the release, the owner or operator and the tank be in compliance with state and federal rules rel[341]

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Related

Moore v. North Dakota Workmen's Compensation Bureau
374 N.W.2d 71 (North Dakota Supreme Court, 1985)
County of Stutsman v. State Historical Society of North Dakota
371 N.W.2d 321 (North Dakota Supreme Court, 1985)

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489 N.W.2d 337, 1992 N.D. LEXIS 162, 1992 WL 175257, Counsel Stack Legal Research, https://law.counselstack.com/opinion/west-plains-electric-cooperative-inc-v-petroleum-tank-release-nd-1992.