Amends existing law by removing outdated or unnecessary provisions related to the Petroleum Clean Water Trust Fund.

LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE SENATE SENATE BILL NO. 1265 BY HEALTH AND WELFARE COMMITTEE AN ACT1 RELATING TO THE PETROLEUM CLEAN WATER TRUST FUND ACT; PROVIDING LEGISLATIVE2 INTENT; AMENDING SECTION 41-4904, IDAHO CODE, TO REVISE A PROVISION RE-3 GARDING THE BOARD OF TRUSTEES OF THE PETROLEUM CLEAN WATER TRUST FUND;4 AMENDING SECTION 41-4910, IDAHO CODE, TO REMOVE OUTDATED PROVISIONS RE-5 GARDING DISTRIBUTION OF FUND MONEYS; REPEALING SECTION 41-4910A, IDAHO6 CODE, RELATING TO APPORTIONMENT OF MONEYS; AMENDING SECTION 41-4911,7 IDAHO CODE, TO REMOVE CODE REFERENCES; REPEALING SECTION 41-4925, IDAHO8 CODE, RELATING TO THE APPLICATION FOR TRUST REGISTRATION; AMENDING SEC-9 TION 41-4925A, IDAHO CODE, TO REMOVE OBSOLETE LANGUAGE; AMENDING SEC-10 TION 41-4930, IDAHO CODE, TO REVISE A PROVISION REGARDING ISSUANCE OF11 CERTIFICATE OF REGISTRATION; AND DECLARING AN EMERGENCY AND PROVIDING12 AN EFFECTIVE DATE.13

Be It Enacted by the Legislature of the State of Idaho:14

SECTION 1. IDAHO CODE CLEANUP -- LEGISLATIVE INTENT. It is the intent15 of the Legislature to ensure that the state laws provided in Idaho Code are16 streamlined, up-to-date, and essential for the citizens of Idaho, while best17 serving the public health, safety, and welfare. In accordance with the Idaho18 Code Cleanup Act, following comprehensive review, the Legislature has iden-19 tified the provisions of this act as obsolete, outdated, or unnecessary.20

SECTION 2. That Section 41-4904, Idaho Code, be, and the same is hereby21 amended to read as follows:22 41-4904. BOARD OF TRUSTEES OF THE FUND. (1) The governor shall appoint23 seven (7) persons to be the board of trustees of the Idaho petroleum clean24 water trust fund. One (1) member shall be a member of the state senate, one25 (1) member shall be a member of the state house of representatives, one (1)26 member shall be a representative of the financial community with expertise27 in the area of insurance, accounting or finance, one (1) member shall be an28 engineer, geologist or similarly trained scientist with experience in envi-29 ronmental remediation and three (3) members shall be wholesale distributors30 of petroleum products. The governor shall appoint a chairman from the seven31 (7) members. The members shall be appointed for terms of four (4) years, ex-32 cept that all vacancies shall be filled for the unexpired term, provided that33 the first two (2) appointments the governor makes after the effective date34 of this act shall serve a term of two (2) years and the other five (5) members35 shall serve a term of four (4) years. Thereafter, a member shall serve a term36 of four (4) years. A certificate of appointment shall be filed in the office37 of the secretary of state. A majority of the members shall constitute a quo-38 rum for the transaction of all business or the exercise of any power or func-39 tion of the Idaho petroleum clean water trust fund. Members of the board of40

2 trustees shall receive a compensation for service as prescribed in section1 59-509(n), Idaho Code.2 (2) The administrator of the fund shall be the state insurance fund un-3 less replaced by the board of trustees with another person. The adminis-4 trator shall serve at the pleasure of the board of trustees. The board of5 trustees may appoint and employ such other persons as may be required by the6 board and shall prescribe the duties and compensation of each such person.7 (3) It shall be the duty of the board of trustees to direct the poli-8 cies and operation of the fund to assure that it is run as an efficient insur-9 ance company, remains actuarially sound and maintains the public purposes10 for which the Idaho petroleum clean water trust fund was created.11

SECTION 3. That Section 41-4910, Idaho Code, be, and the same is hereby12 amended to read as follows:13 41-4910. DISTRIBUTION OF APPLICATION FEES AND TRANSFER FEES. (1) The14 application fees and the transfer fees collected as provided in this chapter15 shall be promptly remitted to the state treasurer for deposit in the Idaho16 petroleum clean water trust fund. The transfer fees and accumulated inter-17 est which accrued to the fund prior to August 3, 1995, shall remain in the18 fund. The transfer fees and accumulated interest, which have been held in a19 separate suspense account since August 3, 1995, shall be distributed as pro-20 vided in subsection (4) of this section. The transfer fees and accumulated21 interest which accrue to the Idaho petroleum clean water trust fund subse-22 quent to April 1, 1997, shall be distributed monthly thereafter as provided23 in subsection (5) (4) of this section.24 (2) An amount of money equal to the actual cost of collecting, adminis-25 tering and enforcing the transfer fee by the commission, as determined by it,26 shall be retained by the commission. The amount retained by the commission27 shall not exceed the amount authorized to be expended by appropriation by the28 legislature. Any unencumbered balance in excess of the actual cost of col-29 lection, administering and enforcing the transfer fee requirements by the30 commission at the end of each fiscal year shall be remitted to the state trea-31 surer for deposit into the Idaho petroleum clean water trust fund.32 (3) From the receipts of the transfer fee, an amount of money shall be33 distributed to the state refund account established under section 63-3067,34 Idaho Code, sufficient to reimburse that account for all current refund35 claims under this chapter paid from that account. Any refunds due and owing36 from the commission under this chapter shall be paid from the state refund37 account and those moneys are hereby continuously appropriated for that pur-38 pose.39 (4) For the distribution on April 1, 1997, the balance of the transfer40 fees and accumulated interest accruing to the separate suspense account es-41 tablished for such fees on August 3, 1995, which remain after distributing42 the amounts specified in subsections (2) and (3) of this section, shall be43 distributed as follows:44 (a) Twenty percent (20%) to the Idaho petroleum clean water trust fund45 established in section 41-4905, Idaho Code;46 (b) Three percent (3%) to the Idaho department of parks and recreation47 in accordance with subparagraphs 1., 2., and 3. of paragraph (f), sub-48 section (1) of section 63-2412, Idaho Code; and49

3 (c) The remainder shall be distributed:1 (i) Six million dollars ($6,000,000) to the state highway account2 for administration by the Idaho transportation department as pro-3 vided in section 41-4910A, Idaho Code; and4 (ii) The balance remaining to the highway distribution account5 established in section 40-701, Idaho Code.6 (5) (4) For the distribution at the end of fiscal year 1997 and monthly7 thereafter, the balance of the transfer fees and accumulated interest ac-8 cruing to the Idaho petroleum clean water trust fund which remain after dis-9 tributing the amounts specified in subsections (2) and (3) of this section,10 shall be distributed as follows:11 (a) Seventy-seven percent (77%) to the highway distribution account12 established in section 40-701, Idaho Code; and13 (b) Three percent (3%) to the Idaho department of parks and recreation14 in accordance with subparagraphs 1., 2., and 3. of paragraph (f), sub-15 section (1) of section 63-2412, Idaho Code.16

SECTION 4. That Section 41-4910A, Idaho Code, be, and the same is hereby17 repealed.18

SECTION 5. That Section 41-4911, Idaho Code, be, and the same is hereby19 amended to read as follows:20 41-4911. ISSUANCE OF CONTRACTS OF INSURANCE BY THE ADMINISTRATOR OF21 THE IDAHO PETROLEUM CLEAN WATER TRUST FUND -- DEFERRAL. (1) The administra-22 tor may issue a contract of insurance to an owner or operator of a petroleum23 storage tank that, based upon a consideration of the owner or operator's ap-24 plication for insurance and appropriate investigation by the administrator,25 meets the eligibility provisions of this chapter and the underwriting re-26 quirements established by the administrator.27 (2) The administrator may defer issuing contracts of insurance to cer-28 tain categories of petroleum storage tank owners or operators if necessary29 for the sound operation of the trust fund.30 (3) The administrator shall consider the following factors in deter-31 mining whether to defer the issuance of contracts of insurance to any cate-32 gory of petroleum storage tank owners or operators:33 (a) The underwriting capacity of the trust fund;34 (b) Any requirement of federal or state law or regulation imposed on any35 category of petroleum storage tank owners or operators to demonstrate36 financial responsibility for corrective action and compensation to37 third parties for bodily injury and property damage arising from acci-38 dental releases from petroleum storage tanks;39 (c) The ability of the administrator to process insurance applications40 from different categories of petroleum storage tank owners or opera-41 tors.42 (4) Any decision by the administrator to defer issuing contracts of in-43 surance to any category of petroleum storage tank owners or operators shall44 be documented in the plan of operation, or an amendment thereto, submitted to45 the director of the department of insurance pursuant to sections 41-4925 or46 41-4925A, Idaho Code, and subject to the director's approval.47

4 (5) The administrator may issue contracts of insurance to deferred1 categories of petroleum storage tank owners or operators when the need for2 deferral documented in subsection (4) of this section no longer exists, as3 demonstrated by an amendment to the plan of operation submitted to and ap-4 proved by the director of the department of insurance pursuant to section5 41-4925A, Idaho Code.6

SECTION 6. That Section 41-4925, Idaho Code, be, and the same is hereby7 repealed.8

SECTION 7. That Section 41-4925A, Idaho Code, be, and the same is hereby9 amended to read as follows:10 41-4925A. AMENDMENTS TO PLAN OF OPERATION. (1) Any amendment to the11 plan of operation prepared by the administrator for the purpose of deferring12 the issuance of contracts of insurance to any category of petroleum storage13 tank owners or operators or for issuing contracts of insurance to any de-14 ferred category of petroleum storage tank owners or operators shall be sub-15 mitted to the director of the department of insurance.16 (2) The director shall review the amendment and shall, with all reason-17 able promptness, approve, approve as modified, or disapprove of the amend-18 ment to the plan of operation. If the amendment is approved, the adminis-19 trator may issue contracts of insurance and otherwise operate the trust fund20 in a manner consistent with the amended plan of operation. If the amend-21 ment is disapproved, the administrator must operate the trust fund in a man-22 ner consistent with the provisions of the plan of operation as submitted to23 the director in the trust fund's application for registration under section24 41-4925, Idaho Code.25 (3) The director may request such relevant documentation and informa-26 tion, including an actuarial analysis of the underwriting capacity of the27 trust fund, as is reasonably necessary to evaluate the proposed amendment to28 the plan of operation.29 (4) All procedures and policies concerning the approval, modification30 or disapproval of any amendment to the plan of operation are subject to the31 provisions of chapter 52, title 67, Idaho Code, as well as the rules of prac-32 tice and procedure of the department of insurance.33

SECTION 8. That Section 41-4930, Idaho Code, be, and the same is hereby34 amended to read as follows:35 41-4930. EXISTING INSURANCE LAWS TO APPLY TO THE TRUST FUND WITH CER-36 TAIN EXCEPTIONS. The trust fund shall comply with all of the applicable pro-37 visions of title 41, Idaho Code, with certain exceptions as follows:38 (1) The creation of the trust fund by act of the legislature shall not39 be deemed to be an ownership, control or operation of an insurer by a govern-40 mental entity, as referred to in section 41-309, Idaho Code, and the surplus41 funds of the trust fund shall be considered to be dedicated and held in re-42 serve for the purpose of providing funds for the payment of claims arising43 out of the discharge of petroleum products from tanks covered by a contract44 of insurance issued to the tank owner or operator by the trust fund as pro-45

5 vided for in section 41-4906, Idaho Code. The absolute control of the trust1 fund shall be vested in the board.2 (2) The provisions of this chapter shall be construed to be contained3 in the document of organization and bylaws of the trust fund for purposes of4 sections 41-319, 41-320 and 41-322, Idaho Code, and the director shall issue5 a certificate of registration to and in the name of the trust fund upon his6 finding that it has met all other appropriate provisions of the Idaho Code,7 including sections 41-313, 41-316 and 41-316A, Idaho Code.8 (3) Section 41-337, Idaho Code, shall not apply to contracts of insur-9 ance issued by the trust fund.10 (4) Sections 41-1004 and 41-1022, Idaho Code, shall not apply to em-11 ployees of the state insurance fund or the trust fund.12 (5) Section 41-1103, Idaho Code, shall not apply to employees of the13 state insurance fund or the trust fund, provided the employees restrict14 their claims adjusting and investigation operations only to those contracts15 issued by the trust fund.16 (6) Except as otherwise provided in this chapter, chapter 28, title 41,17 Idaho Code, and chapter 14, title 30, Idaho Code, shall not apply to the trust18 fund nor shall this trust fund be construed to be a domestic mutual insurer,19 nor a reciprocal insurer, nor any other type of insurer currently regulated20 by title 41, Idaho Code, and the only organizational requirements of this21 trust fund shall be those enumerated in this chapter.22

SECTION 9. An emergency existing therefor, which emergency is hereby23 declared to exist, this act shall be in full force and effect on and after24 July 1, 2026.25