BILL ANALYSIS Ó
SB 445
Page 1
SENATE THIRD READING
SB 445 (Hill)
As Amended August 22, 2014
2/3 vote. Urgency
SENATE VOTE :25-9
ENVIRONMENTAL SAFETY 5-1 APPROPRIATIONS 12-5
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|Ayes:|Alejo, Bloom, Gomez, |Ayes:|Gatto, Bocanegra, |
| |Lowenthal, Ting | |Bradford, |
| | | |Ian Calderon, Campos, |
| | | |Eggman, Gomez, Holden, |
| | | |Pan, Quirk, |
| | | |Ridley-Thomas, Weber |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Donnelly |Nays:|Bigelow, Donnelly, Jones, |
| | | |Linder, Wagner |
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SUMMARY : Extends the current State Water Resources Control
Board (State Water Board) program for the cleanup of Underground
Storage Tanks (USTs) from 2016 to 2026. Specifically, this
bill :
1)Authorizes a $0.02 per gallon fee on petroleum products until
2026 to extend the current State Water Board program for the
cleanup of USTs pursuant to the Barry Keene Underground
Storage Tank Cleanup Act (Act) of 1989.
2)Requires owners and operators of single-walled USTs to
permanently close their single wall tanks by December 31,
2025.
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 Underground Storage Tank Cleanup
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.
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4)Authorizes the State Water Board to impose administrative
civil liability on persons who make fraudulent claims and
misrepresentations to the Fund.
5)Bars claimants and consultants convicted of fraud against the
Fund from further participation in the Fund.
6)Authorizes the State Water Board to recover the costs
associated with investigating and prosecuting fraud cases
against the Fund from persons who were proven to have engaged
in fraud.
7)Increases the maximum amount for replacing, removing, or
upgrading USTs program grants from $50,000 to $70,000.
8)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.
9)Dedicates $0.003 (3 mils) of the assessment for the State
Water Board to use for the following purposes:
a) Loans and grants to assist small business UST owners and
operators to come into compliance with UST regulatory
requirements by removing, replacing, or upgrading USTs,
including complying with the phase out of single-wall
tanks;
b) Deposit into the Site Cleanup Subaccount for the
investigation and remediation of contaminated sites with no
viable responsible party; and,
c) Provides additional funding, as needed, to the School
District Account to reimburse school districts for their
costs associated with cleaning up leaking USTs.
10)Establishes an Expedited Claim Account within the Fund to
include alternative claims
processing procedures and annual funding for individual
claims, and expedited review of
claims.
11)Transfers $100 million from the Fund to the Expedited Claim
Account.
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12)Requires the State Water Board to initiate a study of the
cost effectiveness of issuing
revenue bond to generate proceeds to be used to expedite the
payment of clean up by the
Fund.
13)Allows an owner of property that was previously the subject
of a completed corrective
Action, including tank removal, to file a claim to fund
further corrective action from the same release even if:
a) The previous tank owner who performed the earlier
corrective action did not file a claim to the Fund;
b) The current property owner is the owner of an UST, and
is current on fees and permits for the existing UST on the
property; and
c) Requires the completion of a review by the State Water
Resources Control Board on other ways to prioritize
Underground Storage Tank Cleanup, category B claimants.
14)Provides that grants for the Replacing, Removing, or
Upgrading Underground Storage Tanks (RUST) Program up to
$140,000 for removal and replacement of a Single Wall Tank at
a public fueling station that is at least 15 miles from the
next station to try to prevent adverse impacts of the single
wall tank removal requirements on small rural communities.
15)Allowing the Fund claimants to demonstrate that they have
complied with existing statutory requirements that they have
paid their Fund fees in order to qualify for the funding from
the Fund by providing a signed statement in cases where Board
of Equalization agrees that they have paid fees, but does not
have sufficient data to determine whether the fees paid were
for petroleum stored in a specific tank that has leaked.
16)Provides double jointing language to avoid chaptering out
with SB 1458 (Environmental Quality Committee) of the current
legislative session.
EXISTING LAW :
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Pursuant to the Act of 1989:
1)Establishes a base storage fee of $0.014 (14 mils) for each
gallon of petroleum placed in an UST.
2)Established, until January 1, 2014, an additional storage fee
of $0.006 (6 mils) for each gallon of petroleum placed in an
UST for a total of $0.02 per gallon.
3)Authorizes the State Water Board to expend the moneys in the
Fund, upon appropriation by the Legislature, for various
purposes, including the payment of claims to aid owners and
operators of petroleum USTs who take corrective action to
clean up unauthorized releases from those tanks, corrective
actions undertaken by specified agencies, the cleanup and
oversight of unauthorized releases at abandoned tank sites,
and grants to small businesses to retrofit certain hazardous
substance USTs.
4)Requires, pursuant to United States Environmental Protection
Agency regulations, owners and/or operators of USTs to
demonstrate through insurance coverage or other acceptable
mechanisms that they can pay for cleanup and third-party
damages resulting from leaks that may occur from their USTs.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Increased fee revenues of $79 million per year for six years
from extending the $0.02 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 :
Need for the bill: According to the author, "Leaks from
underground storage tanks represent an ongoing threat to
California groundwater and land resources. Even a small amount
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of petroleum released from a leaking tank can contaminate
groundwater. SB 445 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 provides new direction for the
state to tackle the legacy issue of single-walled tanks still in
use and begin to address groundwater contamination from a wider
range of toxic chemicals."
UST Program Background: The Act of 1989 was created by the
California Legislature and is administered by the State Water
Board to provide a means for petroleum UST owners and operators
to meet the federal and state requirements. The Fund also
assists a large number of small businesses and individuals by
providing reimbursement for unexpected and catastrophic expenses
associated with the cleanup of leaking petroleum USTs.
Claims are paid in priority order based on criteria established
in statute: "A" or first priority is given to homeowners; "B"
or second priority is for small business, non-profit, or small
local government agencies with revenue below a specified level;
"C" or third priority is given to parties with fewer than 500
employees; and, "D" or lowest priority is given to all other
claimants, including major corporations and larger local
governmental agencies.
In recent years, program expenditures have exceeded revenues
in part due to poor program oversight by the State Water
Board, and in part due to unforeseen cost increases to clean
up contaminated sites. Based on the results of a recent
program audit, the State Water Board 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. The State Water Resources Control Board believes
that recent program improvements should also reduce demand for
future funding.
Single-walled USTs: This bill would require owners and
operators of single-walled USTs to permanently close their
single wall tanks by December 31, 2025. Antiquated
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single-walled USTs and components present a high risk of leaking
gasoline, diesel fuels, fuel additives, and other hazardous
substances into the soil and groundwater, posing a threat to
human health and the environment. Single-walled tank systems
have a higher propensity for leaking than newer tanks and
without secondary containment, pollutants leak directly into the
soil and groundwater. This risk is heightened in areas where
USTs are located near drinking wells, with leaks resulting in
serious consequences to drinking water sources. The State Water
Board has no authority under current law to require the
replacement of single-walled USTs with more reliable
double-walled tanks designed to prevent releases from entering
the environment. Currently there are approximately 2,000
operating UST facilities (12% of the total) that have
single-walled USTs, or pipes, or both.
Fraud prevention and recovery: This bill would provide the
State Water Board with authority to help prevent fraud in the
Fund and help recover monetary losses to the Fund due to fraud
and misrepresentation. The bill would accomplish this by: 1)
authorizing the State Water Board to impose administrative civil
liability on persons who make fraudulent claims and
misrepresentations to the Fund; 2) barring claimants and
consultants convicted of fraud against the Fund from further
participation in the Fund; and, 3) authorizing the State Water
Board to recover the costs associated with investigating and
prosecuting fraud cases against the Fund from persons who were
proven to have engaged in fraud.
Related Current Legislation:
1)AB 282 (Wieckowski) of the current legislative session extends
the sunset date of the UST Cleanup Program from 2016 until
2018, and extends the sunset of a $0.006 surcharge on
petroleum stored in a UST from 2014 until 2016. AB 282 was
held in the Senate Appropriations Committee.
2)SB 574 (Nielsen) of 2013, would have expanded the exception
for the requirement that only the current or past owner of a
petroleum UST can apply for reimbursement of cleanup costs
related to a release from that tank. SB 574 was held in the
Senate Appropriations Committee.
Analysis Prepared by : Bob Fredenburg / E.S. & T.M. / (916)
SB 445
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319-3965
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