BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 358| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 358 Author: Smyth (R) Amended: 9/1/11 in Senate Vote: 27 - Urgency SENATE ENVIRONMENTAL QUALITY COMMITTEE : 6-0, 06/27/11 AYES: Simitian, Strickland, Blakeslee, Hancock, Lowenthal, Pavley NO VOTE RECORDED: Kehoe SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 ASSEMBLY FLOOR : 77-0, 06/02/11 - See last page for vote SUBJECT : Hazardous substances: underground storage tanks SOURCE : California Independent Oil Marketers Association DIGEST : This bill (1) requires the owner or operator of an underground storage tank (UST) to send specified information to the State Water Resources Control Board (SWRCB) regarding an unauthorized release of hazardous substances in USTs to local agencies on a written or electronic form developed by the board, (2) requires each regional board and local agency to submit a report to SWRCB for all unauthorized releases using the board's Internet-accessible database, (3) allows SWRCB to adopt regulations to specify reporting requirements to implement CONTINUED AB 358 Page 2 the provisions of the bill, including electronic submission requirements for these reports and requires the regulations to be adopted as emergency regulations and exempts the adoption of these regulations from certain requirements regarding review by the Office of Administrative Law, (4) allows a person required to perform corrective action under certain federal laws to apply to the board for payment of a claim, and (5) changes made by this bill only become operative if AB 291 (Wieckowski) is chaptered. Senate Floor Amendments of 9/1/11 add clarifying language regarding various reporting and other administrative provisions related to the Underground Storage Tank (UST) Program. Specifically they (1) allow for electronic transmittal of reports of specified unauthorized releases from USTs, (2) sets a limit of $10,000 per year for reimbursement of corrective action costs once a UST case has been recommended for closure, unless SWRCB increases that amount, and (3) restricts reimbursement of claims made one year after a closure letter is issued, and (4) other technical and clarifying changes. ANALYSIS : According to the author, the goal of this bill is to ensure that all local agencies that perform UST project oversight and remediation have the same lines of responsibility and review in following state policies on closure of UST sites. This stems from the fact that there are two variations of local agency oversight obligation which is a remnant of the Legislature creating Certified Unified Permitting Agencies in the late 1990's. The author contends that the Local Implementing Agencies have substandard closure rates and this bill significantly improve those rates. UST reforms ongoing SWRCB is working with stakeholders to make improvements in administration of the fund. The 2010 Budget contained Supplemental Report language that directed SWRCB to provided updates on its progress in implementation of findings from a February 2010 audit of the Fund. That audit contained many findings, including that there is a lack of incentive to get cases cleaned up quickly and CONTINUED AB 358 Page 3 efficiently. The lack of closure incentive applied to all three major parties: the responsible party or claimant, whose site cleanup bills are paid by the Fund; the consultant, who can continue to bill hours as long as the case is active; and the regulator, who generally prefers to close only cases that have minimal or no risk associated with the site closure. Due, in part, to these disincentives, over 43 percent of the active claims have been open for ten years or more. The SWRCB directed staff to undertake specific steps to get cases to closure more quickly and efficiently. As part of the solution, SWRCB established two stakeholder task forces to review both the regulatory side and the payment side of the UST Program, and make suggestions for improvements or changes. They are also working on a "low risk" closure policy that is likely to expedite the closure process as well. The changes in this bill are consistent with the audit recommendations and do not appear to conflict with the proposed low-risk closure policy currently under review. Related Legislation AB 291 (Wieckowski), of 2011, proposes a two-year extension on the Fund fee increase and is presently on the Senate Floor. AB 1188 (Ruskin), Chapter 649, Statutes of 2009, increased the specified petroleum storage fee by $0.006 per gallon of petroleum stored, between January 1, 2010, and December 31, 2011. SB 1161 (Lowenthal), Chapter 616, Statutes of 2008, extended the sunset date for the UST fund to January 1, 2016, changed the definition of "tank" to include components attached to the tank, and allocated funding to brownfield cleanups. AB 2729 (Ruskin), Chapter 644, Statutes of 2008, as it relates to USTs, allocated $10 million to schools and revises the priority ranking used by the SWRCB by prioritizing large school districts, above otherwise un-ranked tank owners and operators to receive financial CONTINUED AB 358 Page 4 awards for claims submitted to the SWRCB for UST remediation costs. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 9/1/11) California Independent Oil Marketers Association (source) CORE Environmental Reform, Inc. California Association of Environmental Health Administrators ARGUMENTS IN SUPPORT : The California Independent Oil Marketers Association states, "This measure will help streamline case closures of UST remediation claims that have been on the books for excessive amounts of time. We have recently been made aware of a projection by the State Water Board that the upcoming fiscal year for the USTF will be extremely lean. About half of the active claims in the Class B and Class C (small business claim categories) will receive substantially less than they need to continue effective cleanup efforts. Thus, a 2008-like crisis is looming again, on the near horizon. A package of efforts is necessary: Regulatory reform provided in AB 358 Short-term financial security for the Fund as provided in AB 291 (6/1/11 version) Adoption of a low risk site closure policy by the Water Board Continuing development of efficiencies by the Water Board and the myriad of agencies involved in UST remediation, funding and closure." ASSEMBLY FLOOR : AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Cook, Davis, Dickinson, Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove, Hagman, Halderman, Harkey, Hayashi, Roger Hernández, CONTINUED AB 358 Page 5 Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva, Skinner, Smyth, Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Conway, Gorell, Hall DLW:nl 9/1/11 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED