BILL ANALYSIS Ó AB 291 Page 1 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 AB 291 Page 2 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 AB 291 Page 3 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