BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   AB 358|
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                                 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 
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          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 

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          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 

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          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, 

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            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

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