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
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          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
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               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