BILL ANALYSIS Ó
AB 282
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Jerry Hill, Chair
2013-2014 Regular Session
BILL NO: AB 282
AUTHOR: Wieckowski and Mitchell
AMENDED: Introduced
FISCAL: Yes HEARING DATE: June 19, 2013
URGENCY: No CONSULTANT: Rachel Machi
Wagoner
SUBJECT : UNDERGROUND STORAGE TANKS
SUMMARY :
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.
This bill extends the current $.006 storage fee on each gallon
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of petroleum placed in a UST from the current sunset date of
January 1, 2014 to January 1, 2016.
COMMENTS :
1)Purpose of Bill . According to the author, "Without AB 282 the
UST Cleanup Fund will be vastly underfunded. Even with this
bill, the UST Cleanup Fund will be significantly underfunded.
The funding crisis has been exacerbated by declining gasoline
sales, which has further reduced revenues to the Fund. The
current revenues are not sufficient to cover the work being
required by the regulatory agencies. Due to this funding
shortage, the Fund is also unable to allow existing applicants
on the Priority List into the Fund to commence collection of
reimbursement. Currently there are 34 Priority B claimants
and 86 Priority C claimants waiting for access to the Fund,
including many that have been waiting years for access to the
Fund. Finally, UST owners and operators are relying on the
Fund to demonstrate financial responsibility for UST ownership
and operation in accordance with Federal requirements."
2)Background . The Barry Keene Underground Storage Tank Cleanup
Fund Act of 1989 established UST Cleanup Fund. The mission of
the Fund is to contribute to the protection of California's
water quality, public health, and safety, through: a)
establishing an alternative mechanism to meet federal
financial responsibility requirements for owners and operators
of USTs; and b) reimbursing eligible corrective action costs
incurred for the cleanup of pollution resulting from the
unauthorized release of petroleum from USTs.
The UST Cleanup Fund benefits a large number of small
businesses and individuals by providing reimbursement for
expenses associated with the cleanup of leaking petroleum
USTs. UST Cleanup Fund also provides money to the regional
water quality control boards (regional water boards) and local
regulatory agencies to abate emergency situations or to
undertake corrective action at abandoned sites that pose a
threat to human health, safety, and the environment, as a
result of a UST petroleum release.
The regional water boards, County Local Oversight Program
agencies (LOP Agencies), and other local agencies direct
corrective action to clean up soil and groundwater
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contamination at petroleum UST sites that have had
unauthorized releases. The Fund also supports other special
accounts authorized by the Legislature.
UST Cleanup Fund's revenues are generated by a storage fee for
every gallon of petroleum product placed into a UST. The
current fee is 2.0 cents per gallon. The State Board of
Equalization collects the fee quarterly from owners of active
USTs. The fee is scheduled to drop to 1.4 cents per gallon on
January 1, 2014. UST Cleanup Fund statutes set forth a claim
priority system based on specified claimant characteristics
relating to the claimant's ability to pay. There are four
priorities:
Class A is reserved for residential tank
owners.
Class B is reserved for small California
businesses, governmental agencies, and nonprofit
organizations with gross receipts and employees
below a specified maximum.
Class C is for certain California
businesses, governmental agencies, and nonprofit
organizations not meeting the criteria for Class B,
but who have less than 500 employees.
Class D is given to all other eligible
claimants.
The Barry Keene Underground Storage Tank Cleanup Fund Act is
scheduled to sunset on January 1, 2016.
According to SWRCB's 2011 report, over the life of UST Cleanup
Fund, 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 benefit the
community. The rate of new claims is on a declining trend, with
only 208 being filed in fiscal year 2008-09.
SWRCB indicated that the projected revenues from the extension
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of the supplemental tax are about $180 million over two years.
In recent years, program expenditures have exceeded revenues,
in part due to poor program oversight by SWRCB and in part due
to unforeseen cost increases to clean up contaminated sites.
Based on the results of a recent program audit, SWRCB has made
several changes to the program, to better manage available
funding and to speed up the process for completing cleanup
projects. Additionally, the statute changes made over the
last several years and the increased revenues from AB 291
(Wieckowski), Chapter 579, Statutes of 2011 offset a large
portion of the program deficiency. SWRCB believes that recent
program improvements should also reduce demand for future
funding. However, there remains an ongoing backlog of
thousands of claims that there is not sufficient funding to
pay.
1)Related Legislation .
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
file.
AB 1566 (Wieckowski), Chapter 532, Statutes of 2012,
authorizes the Office of the State Fire Marshal to regulate
the Aboveground Petroleum Storage Act and makes conforming
changes to the APSA. This bill is double-jointed with AB 1701
(Wieckowski).
AB 1701 (Wieckowski), Chapter 536, Statutes of 2012, provided
for state certification of cities and counties to oversee the
cleanup of underground storage tanks. This bill is
double-jointed with AB 1566 (Wieckowski).
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AB 358 (Smyth), Chapter 571, Statutes of 2011, (1) required
the owner or operator of a UST to send specified information
to SWRCB regarding an unauthorized release of hazardous
substances in USTs to local agencies on a written or
electronic form developed by the board, (2) required each
regional board and local agency to submit a report to SWRCB
for all unauthorized releases using the board's
Internet-accessible database, (3) allowed SWRCB to adopt
regulations to specify reporting requirements to implement 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) allowed 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 were contingent on AB 291
(Wieckowski) being chaptered.
AB 291 (Wieckowski), Chapter 569, Statutes of 2011, required a
two-year extension of the additional $0.006 per gallon on the
specified petroleum storage fee until January 1, 2014.
Changes made by this bill were contingent on AB 358 (Smyth)
being chaptered.
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 SWRCB by prioritizing large school
districts, above otherwise un-ranked tank owners and operators
to receive financial awards for claims submitted to SWRCB for
UST remediation costs.
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2)Continuance of the Act . This bill extends the current $.006
storage fee on each gallon of petroleum placed in a UST from
the current sunset date of January 1, 2014 to January 1, 2016
in an aim to continue to fund the UST cleanup program and help
the program reach solvency. Over the last several years there
have been numerous changes made statutorily and
administratively to strengthen and streamline the program.
Many of these changes are just beginning to affect change.
However, without an extension of the program sunset, SWRCB is
going to have to start shutting down the program now to reach
the statutory sunset date of January 1, 2016 and there is
little point to extending the $0.06 storage fee.
An amendment should be taken to extend the program for an
additional two years beyond the current sunset date to January
1, 2018 and require SWRCB to prepare a report that provides a
comprehensive outline of how the program is working, how many
UST cleanups have been closed, the long-term outlook for USTs
in the state and an evaluation of how the recent changes to
the program have impacted UST cleanups.
3)Conflicting measure . The provisions of this measure conflict
with SB 824 (Senate Governance and Finance Committee). An
amendment adding double-jointing language is necessary to
avoid chaptering out of one of the measures.
SOURCE : CORE Environmental Reform, Inc.
SUPPORT : Alameda County Water District
California Independent Oil Marketers Association
(CIOMA)
California Service Station and Auto Repair
Association
(CSSARA)
Sierra Club California
OPPOSITION : None on file