BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 445
Author: Hill (D)
Amended: 8/22/14
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 5-0, 8/28/14 (Pursuant
to Senate Rule 29.10)
AYES: Hill, Fuller, Jackson, Leno, Pavley
NO VOTE RECORDED: Gaines, Hancock
ASSEMBLY FLOOR : 64-8, 8/26/14 - See last page for vote
SUBJECT : Underground storage tanks: hazardous substances:
petroleum
SOURCE : Author
DIGEST : This bill extends the current State Water Resources
Control Board (State Water Board) program for the clean-up of
Underground Storage Tanks (USTs) from 2016 to 2026.
Assembly Amendments delete the Senate version of this bill
relating to pharmacies and instead add the current language.
ANALYSIS :
Existing law:
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Pursuant to the Barry Keene Underground Storage Tank Cleanup Act
(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 monies in the
Underground Storage Tank Cleanup Fund (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.
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
clean-up of USTs pursuant to the 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 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.
1.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.
2.Transfers $100 million from the Fund to the Expedited Claim
Account.
3.Requires the State Water Board to initiate a study of the cost
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effectiveness of issuing revenue bond to generate proceeds to
be used to expedite the payment of clean up by the Fund.
4.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; and
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.
1.Requires the completion of a review by the SWRCB on other ways
to prioritize UST Cleanup, category B claimants.
2.Provides grants for the Replacing, Removing, or Upgrading
Underground Storage Tanks 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.
3.Allows 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.
4.Contains double jointing language to avoid chaptering out with
SB 1458 (Environmental Quality Committee, 2014).
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 Act also assists a large number of small
businesses and individuals by providing reimbursement for
unexpected and catastrophic expenses associated with the cleanup
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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 Board believes that recent program
improvements should also reduce demand for future funding.
Single-walled USTs . This bill requires owners and operators of
single-walled USTs to permanently close their single-wall tanks
by December 31, 2025. Antiquated 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 existing 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.
Prior/Related Legislation
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AB 282 (Wieckowski) of the current legislative session, 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.
AB 282 was held in the Senate Appropriations Committee.
SB 574 (Nielsen, 2013) expands 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.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee:
Increased fee revenues of $79 million per year for six years
from extending the $0.02 assessment.
Unknown increased costs to state agencies who own
single-walled tanks for the removal, replacement or permanent
closure of the tanks.
Unknown potential increased civil liability revenue resulting
from increased enforcement authority.
SUPPORT : (Verified 8/28/14)
California Independent Oil Marketers Association
California League of Conservative Voters
Clear Water Group
Consultants, Owners, Regulators and Enviro-Vendors, Inc.
Cook Environmental Services, Inc
Environmental Resource Council
Frey Environmental, Inc.
Gannett Fleming
Geocon Consultants
J & H Drilling Co., Inc.
KIFF Analytical LLC
Petroleum Sales, Inc.
Sierra West Consultants
Taber Consutants
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Veir Corp
Weber, Hayes and Associates
ARGUMENTS IN SUPPORT : The Environmental Resource Council
writes,
"The passage of this bill is critical to many former members of
the Environmental Resource Council and particularly important to
many additional individuals and small business owners because
the UST Cleanup Fund provides financial assurance necessary to
meet Federal requirements, and includes funding for cleanup of
UST fuel spills. I understand that currently involved stake
holders have worked diligently to help legislators improve the
effectiveness and benefit of this important program.
"On behalf of former members of the Environmental Resource
Council and individuals and small businesses who currently or in
the future may find themselves in the position of need of the
financial help that the Underground Storage Tank (UST)
potential."
ASSEMBLY FLOOR : 64-8, 8/26/14
AYES: Achadjian, Alejo, Ammiano, Bigelow, Bloom, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Chesbro, Conway, Cooley, Dababneh, Daly,
Dickinson, Eggman, Fong, Frazier, Garcia, Gatto, Gomez,
Gonzalez, Gordon, Gorell, Gray, Hall, Roger Hernández, Holden,
Jones, Jones-Sawyer, Levine, Logue, Lowenthal, Maienschein,
Medina, Mullin, Nazarian, Nestande, Olsen, Pan, Perea, John A.
Pérez, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon,
Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting,
Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, Atkins
NOES: Allen, Chávez, Donnelly, Fox, Grove, Linder, Patterson,
Wagner
NO VOTE RECORDED: Dahle, Beth Gaines, Hagman, Harkey, Mansoor,
Melendez, Muratsuchi, Vacancy
RM:e 8/28/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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