BILL ANALYSIS AB 1674 Page 1 Date of Hearing: May 5, 2010 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 1674 (Saldana) - As Amended: April 21, 2010 Policy Committee: Environmental Safety and Toxic Materials Vote: 9-0 Urgency: No State Mandated Local Program: No Reimbursable: No SUMMARY This bill alters existing requirements for petroleum storage tanks design, operation, inspection and fee collection. Specifically, this bill: 1)Exempts, from certain design, testing and monitoring requirements, underground storage tanks (USTs) that meet certain conditions, including that they are "double-vaulted," as in a basement, and have received an exemption from the local agency responsible for UST monitoring and testing. 2)For purposes of exempting a UST from design, testing and monitoring requirements, clarifies that a local agency, without State Water Resources Control Board (SWRCB) input, may determine a UST meets applicable regulatory standards. Current law allows a local agency to make such a determination "without objection" from SWRCB. 3)Redefines "tank facility", from one(s) used by and a "single business entity", to one(s) used by "an owner or operator," the effect of which is to allow oversight of aboveground storage tanks (ASTs) operated by federal facilities. 4)Removes the ability of a local agency to waive AST operator fees when applied to a local or state government. FISCAL EFFECT This bill may result in annual costs to state agencies. This is because state agencies operate ASTs and because this bill deletes local agencies' ability to waive fees such on such state AB 1674 Page 2 agencies. The actual cost of this bill depends on (1) the number of ASTs operated by state agencies, and (2) the amount of fees local agencies charge those state agencies that the local agencies otherwise would have waived, absent this bill. A limited survey of these local agencies seems to indicate they rarely will impose new fees on state agencies. This is because, currently, they tend not to exercise their fee waiver authority. These surveyed local agencies also indicate AST fees on state agencies may decrease following passage of the bill. This is because the fee payer universe will newly include federal agencies, thereby potentially defraying the costs currently born by state and local AST operators. COMMENTS 1)Rationale . The California Association of Environmental Health Administrators (sponsor) claims certain UST requirements, such as pressure monitoring between the soil and the exterior walls, are not appropriate for tanks contained in underground vaults. This bill, the sponsors contend, appropriately clarifies that such tanks need not meet all UST requirements. The sponsors additionally claim that existing law, which refers to a local agency's authority to waive fees on state and local agencies, seems to prevent local agencies from monitoring ASTs operated by federal agencies, such as the Department of Defense (DOD). The sponsor contends this bill will clearly provide locals the authority to monitor ASTs on federal sites and to charge applicable fees to federal tank operators. 2)Background . Existing law charges SWRCB and local agencies, known as Certified Unified Program Agencies (CUPAs), with regulating operators of petroleum storage tanks. There are differing regulatory requirements for underground storage tanks and aboveground storage tanks. a) Underground Storage Tanks . The SWRCB and the CUPAs regulate the design, installation and operation of USTs. The CUPAs are required to implement and enforce the laws governing USTs, accidental release prevention, hazardous materials, and hazardous waste. CUPAs must also establish fees to support the program. AB 1674 Page 3 Existing law requires all USTs installed after July 1, 2004, to be double-walled and "product tight," meaning impervious to liquid and vapor release. In addition, operators of USTs must use vacuum, pressure, or interstitial liquid level measurements to ensure the integrity of interstitial spaces. As written, the law requires such design and montoring for all USTs, even underground tanks wholly contained in a concrete vault, such as those commonly found at oil change facilities. The law exempts underground tank design, installation and operation requirements for tanks if all exterior surfaces, including connected piping and the floor directly beneath the tank, can be monitored by direct viewing. To qualify for such an exemption, the law directs the CUPA to determine, without SWRCB objection, the UST meets requirements that are equal to or more stringent applicable design and operating requirements. b) Aboveground Storage Tanks . On January 1, 2008, the state delegated implementation of the Aboveground Petroleum Storage Act (APSA) to the CUPAs. As of January 1, 2010, CUPAs impose fees on AST operators to implement the act. Some have interpreted the law to prevent CUPAs from collecting the fee from a federal agency, such as DOD, which stores million gallons of fuel in aboveground tanks throughout California. This is because the law specifies that CUPAs have the authority to waive fees for state or local governments but makes no mention of the federal government. 3)Support . This bill is supported by California Association of Environmental Health Administrators and the County of San Diego. 4)There is no registered opposition to this bill . Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081