BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 445
                                                                  Page  1

          Date of Hearing:   July 2, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                     SB 445 (Hill) - As Amended:  June 10, 2014 

          Policy Committee:                             Environmental  
          Safety and Toxic Materials                    Vote: 5-1

          Urgency:     Yes                  State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY

           This bill extends the current State Water Resources Control  
          Board (SWRCB) program for the clean-up of Underground Storage  
          Tanks (USTs) from 2016 to 2020.  Specifically, this bill:

          1)Authorizes a two-cent per gallon fee on petroleum products  
            until 2020.  Increases the maximum amount for replacing,  
            removing, or upgrading USTs program grants from $50,000 to  
            $70,000.  Dedicates $0.003 (3 mils) of the assessment for the  
            SWRC B to use for specified purposes relating to small  
            businesses, schools, and sites without a viable responsible  
            party.

          2)Requires owners and operators of single-walled USTs to  
            permanently close their single-wall tanks by December 31,  
            2020.  Single-wall tanks near public drinking water wells must  
            be closed by December 31, 2018.

          3)Provides that before December 31, 2018, the owner or operator  
            of an UST must demonstrate that they will meet the financial  
            responsibility requirements of state and federal laws with an  
            alternative to the existing UST clean-up fund (Fund).   
            Beginning on January 1, 2019, UST owners or operators must  
            meet existing federal and state financial assurance  
            requirements without relying on the Fund.

          4)Authorizes the SWRCB to impose administrative civil liability  
            on persons who make fraudulent claims and misrepresentations  
            to the Fund.  

          5)Authorizes the SWRCB to recover the costs associated with  








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            investigating and prosecuting fraud cases against the Fund  
            from persons who were proven to have engaged in fraud.  Bars  
            claimants and consultants convicted of fraud against the Fund  
            from further participation in the Fund.

          6)Establishes a new Site Cleanup Subaccount in the Fund which  
            can be used to pay for the costs of investigating and  
            remediating sites with surface or groundwater contamination.  

           FISCAL EFFECT  

          1)Increased fee revenues of $79 million per year for four years  
            from extending the $.02 assessment  

          2)Unknown increased costs to state agencies who own  
            single-walled tanks for the removal, replacement or permanent  
            closure of the tanks.


          3)Unknown potential increased civil liability revenue resulting  
            from increased enforcement authority.

           COMMENTS

          1)Rationale.   According to the author, leaks from underground  
            storage tanks represent an ongoing threat to California  
            groundwater and land resources.  Even a small amount of  
            petroleum released from a leaking tank can contaminate  
            groundwater.  This bill will continue the important work that  
            the state has done to address the threat from underground  
            tanks and allow businesses, local agencies, and schools to  
            clean up the legacy of past practices that poses a threat to  
            public health and the environment.  

            This bill also provides new direction for the state to address  
            the issue of single-walled tanks and begin to address  
            groundwater contamination from a wider range of toxic  
            chemicals.

           2)Background.   Currently, the UST program is supported by a 1.6  
            cent per gallon fee collected quarterly from petroleum UST  
            owner or operators by the State Board of Equalization.  The  
            fee currently generates about $270 million per year for claims  
            reimbursement and disbursement.  An additional storage fee six  
            mills ($0.006) per gallon expired on January 1, 2014.








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            Claims are paid in priority order based on criteria  
            established in statute.   First priority is given to  
            homeowners, second priority to small business, non-profit or  
            small local agencies, third priority to business with less  
            than 500 employees, and the lowest priority is given to major  
            corporations and larger local government agencies.

           3)Related Legislation.   AB 282 (Wieckowski), 2013, extends the  
            sunset date of the Underground Storage Tank (UST) Cleanup  
            Program from 2016 until 2018, and extends the sunset of a  
            $0.006 surcharge on petroleum stored in an UST from 2014 until  
            2016.  This bill was held in the Senate Appropriations  
            Committee.




           Analysis Prepared by  :    Jennifer Galehouse / APPR. / (916)  
          319-2081