BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 291
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          ASSEMBLY THIRD READING
          AB 291 (Wieckowski)
          As Amended  May 27, 2011
          2/3 vote 

           ENVIRONMENTAL SAFETY          9-0                   
          APPROPRIATIONS      17-0        
           
           ----------------------------------------------------------------- 
          |Ayes:|Wieckowski, Miller,       |Ayes:|Fuentes, Harkey,          |
          |     |Campos, Chesbro, Davis,   |     |Blumenfield, Bradford,    |
          |     |Feuer,                    |     |Charles Calderon, Campos, |
          |     |Bonnie Lowenthal,         |     |Davis, Donnelly, Gatto,   |
          |     |Morrell, Valadao          |     |Hall, Hill, Lara,         |
          |     |                          |     |Mitchell, Nielsen, Norby, |
          |     |                          |     |Solorio, Wagner           |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY:   Extends for two years the fees paid by owners of 
          underground petroleum storage tank (UPST) to pay for clean-up of 
          leaking tanks.  Specifically,  this bill  :

          1)Extends for two years a temporary fee paid per gallon on motor 
            vehicle fuel (petroleum storage fee) that the owner of an 
            underground storage tank must pay from 1.4 mils to 2 mils per 
            gallon through January 1, 2014.

          2)Removes the January 1, 2016 sunset on the existing UPST fee 
            and funding program.
           
          EXISTING LAW  under the Barry Keene Underground Storage Tank 
          Cleanup Act of 1989 (Act):

          1)Authorizes the State Water Resources Control Board (SWRCB) to 
            provide grants and loans to gas station owners to assist 
            operator in meeting the underground tank clean-up.  

          2)Established a fee of 2 mils per gallon of motor vehicle fuel 
            that the owner of an underground storage tank must pay for 
            each gallon of petroleum that is stored in an underground 
            tank.

           FISCAL EFFECT  :  According to the Assembly Appropriations 








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          Committee, annual underground storage tank per-gallon fee 
          revenue of approximately $180 million, through 2013, to the 
          SWRCB ÝUnderground Storage Tank Cleanup Fund (USTCF)].

            COMMENTS  :

          The Act created the USTCF program.  The USTCF program is 
          administered by the SWRCB and is designed to contribute to the 
          protection of California's public health, safety, and water 
          quality through:  1) establishing a mechanism for owners and 
          operators of USTs to meet federal financial responsibility 
          requirements; and, 2) reimbursing eligible UST owners and 
          operators for corrective action costs incurred in the cleanup of 
          soil and groundwater contamination resulting from the 
          unauthorized release of petroleum from USTs.

          Currently, the USTCF program is supported by a 2 mils per gallon 
          fee collected quarterly from petroleum UST owner/operators by 
          the State Board of Equalization.  The fee currently generates 
          about $270 million per year for claims reimbursement and other 
          authorized accounts including:  1) the Emergency, Abandoned, and 
          Recalcitrant (EAR) Account; 2) the Commingled Plume (CP) 
          Account; 3) the OSCF; 4) the RUST program; and, 5) the Drinking 
          Water Treatment and Research Fund (DWTRF).  With the exception 
          of the DWTRF, which is administered by the Department of Public 
          Health, these accounts are all managed by the SWRCB.

          USTCF claims are paid in priority order based on criteria 
          established in statute:  "A" or first priority is given to 
          homeowners; "B" or second priority is for small business, 
          non-profit, or small local government agencies with revenue 
          below a specified level; "C" or third priority is given to 
          parties with fewer than 500 employees; and, "D" or lowest 
          priority is given to all other claimants, including major 
          corporations and larger local governmental agencies.

          Over the life of the USTCF, some 19,300 claims for reimbursement 
          have been filed with the program, and $2.5 billion has been paid 
          to claimants.  Cleanups have been completed at over 6,800 sites, 
          and costs at another 4,100 active sites are currently being 
          paid.  A closed site indicates the contaminants have been 
          investigated, monitored, and removed to a level protective of 
          health, safety, and the environment, and allows the property to 
          continue in its current use or return to productive use to the 








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          benefit the community.  The rate of new claims is on a declining 
          trend, with only 208 being filed in fiscal year 2008-09.

           Prior legislation:  

          AB 1188 (Ruskin) Chapter 649, Statutes of 2009, this bill 
          increases the specified petroleum storage fee by $0.006 per 
          gallon of petroleum stored, between January 1, 2010, and 
          December 31, 2011.  By operation of existing law, the revenue 
          resulting from the increase is required to be deposited in the 
          USTCF and be available, upon appropriation, for expenditure for 
          the reimbursement of tank owners for the coast of cleaning up 
          leaking underground storage tanks.


           Analysis Prepared by  :    Bob Fredenburg / E.S. & T.M. / (916) 
          319-3965 


                                                                FN: 0001014