BILL ANALYSIS �
AB 120
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Jerry Hill, Chair
2013-2014 Regular Session
BILL NO: AB 120
AUTHOR: Asm. Comm. On Environmental Safety and Toxic
Materials
AMENDED: Introduced
FISCAL: Yes HEARING DATE: June 19, 2013
URGENCY: No CONSULTANT: Rachel Machi
Wagoner
SUBJECT : UNDERGROUND STORAGE TANKS: SCHOOL DISTRICTS
Existing law , under the Barry Keene Underground Storage Tank
Cleanup Trust Fund Act of 1989:
1) Requires every owner of an underground storage tank (UST) to
pay a storage fee for each gallon of petroleum placed in the
tank.
2) Requires the fees to be deposited in the Underground Storage
Tank Cleanup Fund (UST Cleanup Fund).
3) Establishes a base storage fee of $0.014 (14 mils) for each
gallon of petroleum placed in a UST (Health and Safety Code
(HSC) �25299.41).
4) Establishes, until January 1, 2014, an additional storage fee
of $0.006 (6 mils) for each gallon of petroleum placed in a
UST for a total of $0.02 per gallon (HSC �25299.43).
5) Authorizes the State Water Resources Control Board (SWRCB) to
expend the funds in the UST Cleanup Fund, upon appropriation
by the Legislature, for various purposes, including the
payment of claims of up to $1,500,000 per occurrence, as
defined, to aid owners and operators of petroleum USTs who
take corrective action to clean up unauthorized releases from
those tanks and the payment of claims for certain third party
injuries and damages.
6) Creates the School District Account (SDA) in the UST Cleanup
Fund, for expenditure by SWRCB, to pay a claim filed by a
AB 120
Page 2
school district based on a specified priority schedule. (HSC
�25299.50.3).
a) Transfers $10 million per year, in the 2009-10, 2010-11,
and 2011-12 fiscal years, from the UST Cleanup Fund to SDA,
for expenditure, upon appropriation by the Legislature, for
the payment of claims filed by a school district.
b) Provides that funds in SDA that are not expended in a
fiscal year shall remain in SDA.
c) Sunsets the statutes governing SDA on January 1, 2016.
Provides that funds remaining in SDA on January 1, 2016,
shall be transferred to the UST Cleanup Fund.
7) 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 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 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).
This bill modifies eligibility requirements for SDA within the
UST Cleanup Fund. Specifically, this bill :
1)Requires SWRCB to waive the permit requirement for applicants
to 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
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.
COMMENTS :
1) Purpose of Bill . 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,
AB 120
Page 3
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 SWRCB, as of
December 2, 2012, 267 school districts applied for funding
through SDA. Of these, 193 school district sites have been
funded and six are on the priority list (already approved)
waiting to be funded. About 40 school districts have been
denied funding due to ineligibility. 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 environmental problems associated with USTs 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 SWRCB to waive the permitting requirement
for school districts that haven't used their underground
storage tanks since January 1, 2013, thus making them eligible
to access SDA tank cleanup funds.
2)Permit requirements and waivers . In order to be eligible for
reimbursement from the UST Cleanup 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
AB 120
Page 4
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 SWRCB waive the
requirement as a condition for eligibility. Waivers are
granted if 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 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.
3) Related legislation .
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 also being heard in the Senate Environmental
Quality Committee.
SB 574 (Nielsen, 2013) requires SWRCB to pay a claim for the
costs of corrective action to a person who owns property on
which is located a release from a petroleum UST that has been
removed, the site has been the subject of a corrective action,
and for which additional corrective action is required because
of additionally discovered contamination from the previous
release if the person owns the property and is required to
perform corrective action pursuant to those provisions because
of additionally discovered contamination, if the person who
carried out the earlier and completed corrective action did
not apply for reimbursement, as prescribed. This bill was
held in the Senate Appropriations Committee on the suspense
AB 120
Page 5
file.
AB 2729 (Ruskin) Chapter 644, Statutes 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).
AB 1188 (Ruskin), Chapter 649, Statutes of 2010, extended SDA
eligibility to Priority Class B and C (smaller) school
district claims.
SB 1018 (Senate Budget Committee), Chapter 39, Statutes of
2012, extended the sunset date of the SDA program from July 1,
2012, to January 1, 2016.
4) Current State of SDA . While 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.
SOURCE : Coalition for Adequate School Housing
SUPPORT : California Association of Environmental Health
Administrators
California Rural Legal Assistance Foundation
California Teachers Association
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 on file
AB 120
Page 6