BILL ANALYSIS Ó
AB 120
Page 1
Date of Hearing: March 12, 2013
ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS
Luis A. Alejo, Chair
AB 120 (Environmental SafetyCommittee) - As Introduced:
January 14, 2013
SUBJECT : Underground storage tanks: school districts.
SUMMARY : Modifies eligibility requirements for the School
District Account (SDA), within the Underground Storage Tank
Cleanup Fund (UST Fund). Specifically, this bill :
1)Requires the State Water Resources Control Board (SWRCB) to
waive the permit requirement for applicants to the SDA, if
certain requirements are met.
2)Requires, as a condition of eligibility for a permit waiver,
the superintendent of the school district receiving funds from
the SDA to certify that petroleum was not delivered on or
after January 1, 2003, or that the tank was removed prior to
January 1, 2003.
EXISTING LAW :
Under the Barry Keene Underground Storage Tank Cleanup Trust
Fund Act of 1989 (Health and Safety Code (HSC) § 25299.10, et
seq.),
1)Requires every owner and operator of an underground storage
tank (UST) to establish and maintain evidence of financial
responsibility for taking corrective action and compensating
third parties for bodily injury and property damage arising
from operating an underground storage tank (HSC § 25299.31).
2)Creates the UST Fund in the State Treasury for expenditure by
the SWRCB, upon appropriation by the Legislature. Specifies
fees, interest and penalties that are required to be deposited
into the UST Fund. Provides that an owner or operator of an
UST, as specified, who is required to perform corrective
action on a leaking UST, may apply to the SWRBC for
satisfaction of a claim. Provides that the SWRCB may pay the
claim, as specified (HSC § 25299.10, et seq.).
3)Creates the SDA in the UST Fund, for expenditure by the SWRCB,
AB 120
Page 2
to pay a claim filed by a school district based on a specified
priority schedule (HSC § 25299.50.3).
a) Transfers ten million dollars ($10,000,000) per year, in
the 2009-10, 2010-11, and 2011-12 fiscal years, from the
UST Fund to the SDA, for expenditure, upon appropriation by
the Legislature, for the payment of claims filed by a
school district.
b) Provides that funds in the SDA that are not expended in
a fiscal year shall remain in the SDA.
c) Sunsets the statutes governing the SDA on January 1,
2016. Provides that funds remaining in the SDA on January
1, 2016, shall be transferred to the UST Fund.
4)Requires that to be eligible for a claim payment, the claimant
must have complied with the permit requirements of Underground
Storage of Hazardous Substances statute (HSC Chapter 6.7).
Provides that all claimants who file their claim on or after
January 1, 2008, as specified, may seek a waiver of the
requirement to obtain a permit. Requires the SWRCB to waive
the permit requirements as a condition for payment from the
UST Fund if it makes specified findings, including that the
claimant was unaware of the permit requirement (HSC §
25299.57).
FISCAL EFFECT : Unknown.
COMMENTS :
Leaking underground storage tanks . According to the SWRCB,
leaking underground storage tanks are a significant source of
petroleum impacts to groundwater and may pose the following
potential threats to public health and safety: exposure from
impacts to soil and/or groundwater; contamination of drinking
water aquifers; contamination of public or private drinking
water wells; and, inhalation of vapors.
Underground Storage Tank Cleanup Fund . The SWRCB states that
the Barry Keene Underground Storage Tank Cleanup Trust Fund Act
of 1989 (commencing with section 25299.10 of the HSC), created
the UST Fund to help eligible owners and operators of petroleum
USTs to meet federal and state requirements to demonstrate
financial responsibility by providing coverage to pay for the
AB 120
Page 3
costs of cleanup and third party liability caused by an
unauthorized release of petroleum from a UST; to provide
financial assistance by reimbursing costs of cleanup for
unauthorized releases from petroleum USTs; and, to provide
reimbursement for damages awarded to third parties who are
injured by unauthorized releases of petroleum from USTs.
Funds for the program are generated by a storage fee (mill fee)
paid by UST owners who are required to have a permit to own or
operate a UST. The fee is based on the number of gallons of
petroleum placed in the UST and is collected by the Board of
Equalization. The UST Fund reimburses eligible claimants for
eligible, incurred corrective action costs. Corrective action
costs include preliminary site assessment, soil and water
investigation, corrective action plan implementation, and
verification monitoring after the cleanup is completed.
Permit requirements and waivers . In order to be eligible for
reimbursement from the UST Fund, the claimant must be, and have
been, in compliance with the UST permit requirements dictated in
Chapter 6.7 of the HSC (Underground Storage of Hazardous
Substances statutory permit requirements). The exception to
this requirement is that if a claimant acquires real property
where a UST is situated, and, despite reasonable diligence, the
claimant was unaware of the UST at the time the real property
was acquired, then the claimant can demonstrate permit
compliance if the claimant obtains a UST permit within a
reasonable period of time, not to exceed one year, from the time
that the claimant should have become aware of the UST or when
the local agency began issuing permits, whichever occurs later.
In addition to this exception, if the claimant cannot provide
evidence of having obtained a permit to own or operate the
UST(s), the claimant can request that the SWRCB waive the
requirement as a condition for eligibility. Waivers are granted
if the SWRCB finds that the claimant was unaware of the permit
requirement, and upon becoming aware of the permit requirement,
the claimant complies with UST permitting requirements or UST
closure requirements; the claimant has complied with financial
responsibility requirements and has obtained and paid for all
permits currently required; and, the claimant has paid all UST
storage fees, interest, and penalties.
Claimants who qualify for the permit waiver must pay a higher
deductible on their claim, depending upon the date the claimant
AB 120
Page 4
complies with UST permitting or closure requirements. Current
claimants operating under this scenario must pay a deductible
that is four times the amount that would otherwise apply to the
claim.
School District Account (SDA) . AB 2729 (Ruskin) Chapter 644,
Statues of 2008, created the SDA within the UST Fund. The bill
transferred from the UST Fund to the SDA a sum of $10 million
per year in fiscal years 2009-10, 2010-11, and 2011-12, to pay
for claims filed by school districts in Priority Class D
(claimants with more than 500 employees). The SDA statute was
amended in 2010 to extend SDA eligibility to Priority Class B
and C (smaller) school district claims and then again in 2012 to
extend the sunset date of the SDA program from July 1, 2012, to
January 1, 2016. While the SWRCB will continue to reimburse
encumbered claims after January 1, 2016, all remaining
unencumbered funds in the SDA will revert to the UST Fund.
School district claims are subject to the same eligibility
criteria as all other UST Fund claims. As of December 2, 2012,
the SDA carried a balance of $14,339,161.
School districts and permitting requirements . Supporters of the
bill argue that many school districts are ineligible for SDA
funds because they cannot comply with the UST Fund permit
requirement. Many districts have antiquated tanks, and through
staff turnover, facility changes and lack of recordkeeping over
time (all common at school districts), they have failed to
maintain current permits on their unused tanks. Additionally,
these school districts are often ineligible for the existing UST
Fund permit requirement exception and waivers because the school
districts are deemed to have knowledge of the tanks.
There are 700 reported fuel leaks at school district sites in
the State. According to data supplied by the SWRCB, as of
December 2, 2012, 267 school districts applied for funding
through the SDA. Of these, 193 school district sites have been
funded and 6 are on the priority list (already approved) waiting
to be funded. About 40 school districts have been denied
funding due to ineligibility. The SWRCB estimates that 25% of
these later districts were denied eligibility for being unable
to comply with permitting requirements and 48% were denied for
more than one reason; the inability to comply with permitting
requirements most likely being one of those reasons.
Supporters also argue that finding the resources to clean up the
AB 120
Page 5
environmental problems associated with underground storage tanks
is extremely difficult for school districts, which are already
facing reduced budgets. Costs for cleanup can easily range from
$50,000 to over $1,000,000.
This bill requires the SWRCB to waive the permitting requirement
for school districts that haven't recently used their
underground storage tanks, thus making them eligible to access
SDA tank cleanup funds.
Related legislation :
1)AB 282 (Wieckowski). Extends the sunset, from January 1, 2014
until January 1, 2016, of the increase in the fee for storage
in an underground tank of $0.006 per gallon of petroleum.
This bill is referred to the Assembly ESTM Committee.
2)SB 574 (Nielsen). Makes changes to the reimbursement
requirements of the UST Fund. This bill is has been referred
to the Senate Rule Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Environmental Health Administrators
California Rural Legal Assistance Foundation
Clean Water Action
Coalition for Adequate School Housing
Community Water Center
CORE Environmental Reform
Environmental Justice Coalition for Water
Livermore Joint and Unified School District
PolicyLink
San Lorenzo Unified School District
Santa Barbara Unified School District
Small School Districts' Association
Opposition
None received.
Analysis Prepared by : Shannon McKinney / E.S. & T.M. / (916)
319-3965
AB 120
Page 6