SB 763, as amended, Fuller. State Water Resources Control Board: underground storage tanks.
(1) Existing law provides for the regulation of underground storage tanks by the State Water Resources Control Board. Existing law, until January 1, 2016, requires the board to conduct a loan and grant program to assist small businesses in upgrading, replacing, or removing tanks meeting applicable local, state, or federal standards (UST upgrade program). Under existing law, the interest rate for loans is set at the rate earned by the Surplus Money Investment Fund at the time of the loan commitment. Existing law establishes the Petroleum Underground Storage Tank Financing Account (financing account) and, upon appropriation by the Legislature, requires moneys in the account to be used by the board to make loans and grants for purposes of the UST upgrade program. Existing law requires interest earned from the investment of the moneys in the account to be deposited into a subaccount, available upon appropriation by the Legislature for administrative expenses of the board. Existing law requires the board annually to make available not more than 33% of the available funds from the account for the purposes of providing grants.
This bill would extend the loan and grant program indefinitely and revise loan eligibility and grant award requirements. The bill would require the board to annually make available not more than 15% of the available funds from the account for the purposes of providing grants. The bill would set the interest rate for loans at the rate equal to 1⁄2 of the most recent general obligation rate obtained by the office of the Treasurer at the time of commitment. The bill would instead require interest earned from moneys in the financing account to be deposited into that account and would eliminate the subaccount. The bill would require loan fees and various other moneys received in the implementation of the loan and grant program to be deposited into the financing account. The bill would specify that moneys in the financing account are permitted to be used, in addition to making loans and grants, to service loans, to recover defaulted loan moneys, to protect the state’s position as a lender creditor, and for administration costs, as specified.
(2) Existing law establishes the Underground Storage Tank Cleanup Fund in the State Treasury and requires specified moneys to be deposited into the fund. Under existing law, moneys in the fund may be expended by the board, upon appropriation by the Legislature, for purposes
begin delete ofend delete the Barry Keene Underground Storage Tank Cleanup Trust Fund Act of 1989.
This bill would transfer $8,000,000 from the fund to the financing account and appropriate these funds for the purpose of making grants and loans and administering specific provisions, as prescribed.
(3) This bill would also make technical, nonsubstantive changes to various provisions.
Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 25284.1 of the Health and Safety Code
2 is amended to read:
(a) The board shall take all of the following actions
4with regard to the prevention of unauthorized releases from
5petroleum underground storage tanks:
6(1) On or before June 1, 2000, initiate a field-based research
7program to quantify the probability and environmental significance
8of releases from underground storage tank systems meeting the
91998 upgrade requirements specified in Section 25284, as that
10section read on January 1, 2002. The research program shall do
11all of the following:
12(A) Seek to identify the source and causes of releases and any
13deficiencies in leak detection systems.
14(B) Include single-walled, double-walled, and hybrid tank
15systems, and avoid bias towards known leaking underground
16storage tank systems by including a statistically valid sample of
17all operating underground storage tank systems.
18(C) Include peer review.
19(2) Complete the research program on or before June 1, 2002.
20(3) Use the results of the research program to develop
21appropriate changes in design, construction, monitoring, operation,
22and maintenance requirements for tank systems.
23(4) On or before January 1, 2001, adopt regulations to do all of
25(A) (i) Require underground storage tank owners, operators,
26service technicians, installers, and inspectors to meet minimum
27industry-established training standards and require tank facilities
28to be operated in a manner consistent with industry-established
29best management practices.
30(ii) The board shall implement an outreach effort to educate
31small business owners or operators on the importance of the
32regulations adopted pursuant to this subparagraph.
33(B) (i) Except as provided in clauses (ii) and (iii), require testing
34of the secondary containment components, including
35under-dispenser and pump turbine containment components, upon
36initial installation of a secondary containment component and
37periodically thereafter, to ensure that the system is capable of
38containing releases from the primary containment until a release
P4 1is detected and cleaned up. The board shall consult with the
2petroleum industry and local government to assess the appropriate
3test or tests that would comply with this subparagraph.
4(ii) Secondary containment components that are part of an
5emergency generator tank system may be tested using enhanced
6leak detection, if the test is performed at the frequency specified
7by the board for testing of secondary containment pursuant to
8Section 2644.1 of Title 23 of the California Code of Regulations.
9If the results of the enhanced leak detection test indicate that any
10component of the emergency generator tank system is leaking
11liquid or vapor, the owner or operator shall take appropriate actions
12to correct the leakage, and the owner or operator shall retest the
13system using enhanced leak detection until the system is no longer
14leaking liquid or vapor.
15(iii) Any tank or piping that is part of an emergency generator
16tank system and located within a structure as described in paragraph
17(2) of subdivision (a) of Section 25283.5 is exempt from the
18secondary containment testing required by clause (i), if the owner
19or operator conducts visual inspections of tank or piping each time
20the tank system is operated, but no less than monthly, and maintains
21a log of inspection results for review by the local agency. This
22clause is not applicable if the board adopts regulations pursuant
23to Section 25299.3 that address the design, construction, upgrade,
24and monitoring of unburied tanks that are part of an emergency
25generator tank system.
26(C) Require annual testing of release detection sensors and
27alarms, including under-dispenser and pump turbine containment
28sensors and alarms. The board shall consult with the petroleum
29industry and local government to assess the appropriate test or
30tests that would comply with this subparagraph.
31(5) (A) Require an owner or operator of an underground storage
32tank installed after July 1, 1987, if a tank is located within 1,000
33feet of a public drinking water well, as identified pursuant to the
34state GIS mapping database, to have the underground storage tank
35system fitted, on or before July 1, 2001, with under-dispenser
36containment or a spill containment or control system that is
37approved by the board as capable of containing any accidental
39(B) Require all underground storage tanks installed after January
401, 2000, to have the tank system fitted with under-dispenser
P5 1containment or a spill containment or control system to meet the
2requirements of subparagraph (A).
3(C) Require an owner or operator of an underground storage
4tank that is not otherwise subject to subparagraph (A), and not
5subject to subparagraph (B), to have the underground storage tank
6system fitted to meet the requirements of subparagraph (A), on or
7before December 31, 2003.
8(D) On and after January 1, 2002, no person shall install, repair,
9maintain, or calibrate monitoring equipment for an underground
10storage tank unless that person satisfies both of the following
12(i) The person has fulfilled training standards identified by the
13board in regulations adopted pursuant to this section.
14(ii) The person possesses a tank testing license issued by the
15board pursuant to Section 25284.4, or a Class “A” General
16Engineering Contractor License, C-10 Electrical Contractor
17License, C-34 Pipeline Contractor License, C-36 Plumbing
18Contractor License, or C-61 (D40) Limited Specialty Service
19Station Equipment and Maintenance Contractor License issued by
20the Contractors’ State License Board.
21(E) Loans and grants for the installation of under-dispenser
22containment or a spill containment or control system shall be made
23available pursuant to Chapter 6.76 (commencing with Section
begin delete 25299.10)end delete.
25(6) Convene a panel of local agency and regional board
26representatives to review existing enforcement authority and
27procedures and to advise the board of any changes that are needed
28to enable local agencies to take adequate enforcement action against
29owners and operators of noncompliant underground storage tank
30facilities. The panel shall make its recommendations to the board
31on or before September 30, 2001. Based on the recommendations
32of the panel, the board shall also establish effective enforcement
33procedures in cases involving fraud.
34(b) On or before July 1, 2001, the Contractors’ State License
35Board, in consultation with the board, the petroleum industry, air
36pollution control districts, air quality management districts, and
37local government, shall review its requirements for petroleum
38underground storage tank system installation and removal
39contractors and make changes, where appropriate, to ensure these
40contractors are qualified.
Section 25299.51 of the Health and Safety Code is
2amended to read:
The board may expend the money in the fund for
4all the following purposes:
5(a) In addition to the purposes specified in subdivisions (c), (d),
6and (e), for the costs of implementing this chapter and for
7implementing Section 25296.10 for a tank that is subject to this
9(b) To pay for the administrative costs of the State Board of
10Equalization in collecting the fee imposed by Article 5
11(commencing with Section 25299.40).
12(c) To pay for the reasonable and necessary costs of corrective
13action pursuant to Section 25299.36, up to one million five hundred
14thousand dollars ($1,500,000) per occurrence. The Legislature
15may appropriate the money in the fund for expenditure by the
16board, without regard to fiscal year, for prompt action in response
17to any unauthorized release.
18(d) To pay for the costs of an agreement for the abatement of,
19and oversight of the abatement of, an unauthorized release of
20hazardous substances from underground storage tanks, by a local
21agency, as authorized by Section 25297.1 or by any other provision
22of law, except that, for the purpose of expenditure of these funds,
23only underground storage tanks, as defined in Section 25299.24,
24shall be the subject of the agreement.
25(e) To pay for the costs of cleanup and oversight of unauthorized
26releases at abandoned tank sites. The board shall not expend more
27than 25 percent of the total amount of money collected and
28deposited in the fund annually for the purposes of this subdivision
29and subdivision (h).
30(f) To pay claims pursuant to Section 25299.57.
31(g) To pay, upon order of the Controller, for refunds pursuant
32to Part 26 (commencing with Section 50101) of Division 2 of the
33Revenue and Taxation Code.
34(h) To pay for the reasonable and necessary costs of corrective
35action pursuant to subdivision (f) of Section 25296.10, in response
36to an unauthorized release from an underground storage tank
37subject to this chapter.
38(i) To pay claims pursuant to Section 25299.58.
39(j) To pay for expenditures by the board associated with
40discovering violations of, and enforcing, or assisting in the
P7 1enforcement of, the requirements of Chapter 6.7 (commencing
2with Section 25280) with regard to petroleum underground storage
4(k) For transfer to the Petroleum Underground Storage Tank
5Financing Account, for purposes of Chapter 6.76 (commencing
6with Section 25299.100).
Section 25299.102 of the Health and Safety Code is
8amended to read:
The board shall only make loan funds available to
10loan applicants that meet all of the following eligibility
12(a) The loan applicant is a small business, either as defined in
13Section 632 of Title 15 of the United States Code, and in the federal
14regulations adopted to implement that section, as specified in Part
15121 (commencing with Section 121.101) of Chapter 1 of Title 13
16of the Code of Federal Regulations, or employs fewer than 500
17full-time and part-time employees, is independently owned and
18operated, and is not dominant in its field of operation. In either
19case, the principal office of the small business shall be domiciled
20in the state, and the officers of the small business shall be domiciled
21in this state. The board shall give priority to awarding loans to
22small businesses that meet the definition of small business specified
23in subdivision (d) of Section 14837 of the Government Code.
24(b) The loan applicant owns or operates a project tank.
25(c) The loan applicant demonstrates the ability to repay the loan,
26and the availability of adequate collateral to secure the loan.
27(d) All tanks owned and operated by the loan applicant are
28subject to compliance with Chapter 6.7 (commencing with Section
2925280), and the regulations adopted pursuant to that chapter.
30(e) The loan applicant has complied, or will
comply, with the
31financial responsibility requirements specified in Section 25299.31
32and the regulations adopted pursuant to this section.
Section 25299.103 of the Health and Safety Code is
34amended to read:
(a) A complete loan application shall include all
36of the following:
37(1) Evidence of eligibility.
38(2) An environmental audit, as specified in Section 5260 of Title
3910 of the California Code of Regulations.
P8 1(3) Financial and legal documents necessary to demonstrate the
2applicant’s ability to repay and provide collateral for the loan. The
3board shall develop a standard list of documents required of all
4applicants, and may also request from individual applicants
5additional financial and legal documents not provided on this list.
6(4) An explanation of the reasons why the project tank is not in
7compliance with applicable local, state, or federal standards, and
8evidence that tanks not included in the list of project tanks are
9currently in compliance with applicable local, state, or federal
11(5) A detailed cost estimate of the tasks that are required to be
12completed in order for the project tanks to comply with applicable
13local, state, or federal standards.
14(6) Any other information that the board determines to be
15necessary to include in an application form.
16(b) Notwithstanding paragraph (4) of subdivision (a), the board
17may not refuse to grant a loan to an applicant solely because the
18applicant has failed to obtain a permit pursuant to the requirements
19of Chapter 6.7 (commencing with Section 25280).
Section 25299.104 of the Health and Safety Code is
21amended to read:
(a) The minimum amount that the board may loan
23an applicant is ten thousand dollars ($10,000), and the maximum
24amount that the board may loan an applicant is seven hundred fifty
25thousand dollars ($750,000).
26(b) The term of the loan shall be for a maximum of 20 years if
27secured by real property, and for 10 years if not secured by real
28property. The interest rate for loans shall be set at the rate equal
29to one-half of the most recent general obligation bond rate obtained
30by the office of the Treasurer at the time of the loan commitment.
31(c) Loan funds may be used to finance up to 100
percent of the
32costs necessary to upgrade, remove, or replace project tanks,
33including corrective actions, to meet applicable local, state, or
34federal standards, including, but not limited to, any design,
35construction, monitoring, operation, or maintenance requirements
36adopted pursuant to Sections 25284.1
begin delete andend delete 25292.4.
37(d) The board may charge a loan fee to loan applicants of up to
382 percent of the requested loan amount. The loan fee shall be
39deposited in the Petroleum Underground Storage Tank Financing
Section 25299.105 of the Health and Safety Code is
2amended to read:
(a) The board shall make grant funds available
4from the Petroleum Underground Storage Tank Financing Account
5to eligible grant applicants who meet all of the following eligibility
7(1) The grant applicant is a small business, pursuant to the
9(A) The grant applicant meets the conditions for a small business
10concern as defined in Section 632 of Title 15 of the United States
11Code, and in the federal regulations adopted to implement that
12section, as specified in Part 121 (commencing with Section
13121.101) of Chapter I of Title 13 of the Code of Federal
15(B) The grant applicant employs fewer than 20 full-time and
16part-time employees, is independently owned and operated, and
17is not dominant in its field of operation.
18(2) The principal office of the grant applicant is domiciled in
19the state and the officers of the grant applicant are domiciled in
21(3) All tanks owned and operated by the grant applicant are
22subject to compliance with Chapter 6.7 (commencing with Section
2325280) and the regulations adopted pursuant to that chapter.
24(4) The facility where the project tank is located has sold at
25retail less than 900,000 gallons of gasoline annually for each of
26the two years preceding the submission of the grant application.
27The number of gallons sold shall be based upon taxable sales
28figures provided to the State Board of Equalization for that facility.
29(5) The grant applicant owns or operates a tank that is in
30compliance with all of the following:
31(A) Section 41954.
32(B) Any of the following:
33(i) Section 25290.1.
34(ii) Section 25290.2.
35(iii) Section 25291.
36(iv) Subdivisions (d) and (e) of Section 25292.
37(C) Any regulation implementing the applicable sections
38required for compliance with subparagraphs (A) and (B).
39(6) The facility where the project tank is located was legally in
40business retailing gasoline after January 1, 1999.
P10 1(b) Grant funds may only be used to pay the costs necessary to
2comply with the requirements of Section 25284.1, 25292.4,
begin deleteorend delete
Section 25299.106 of the Health and Safety Code is
5amended to read:
A complete grant application shall include all of
7the following information:
8(a) Evidence of eligibility.
9(b) The board shall develop a standard list of documents required
10of all applicants, and may also request from individual applicants
11additional financial and legal documents not provided on this list.
12(c) An explanation of the actions the applicant is required to
13take to comply with the requirements of Sections 25284.1 and
15(d) A detailed cost estimate of the actions that are required to
16be completed for the project tanks to comply with applicable local,
17state, or federal standards, if applicable.
18(e) Any other information that the board determines to be
19necessary to include in an application form.
(a) The minimum amount that the board may grant
23an applicant is three thousand dollars ($3,000), and the maximum
24amount that the board may grant an applicant is fifty thousand
26(b) Grant funds may be used to finance up to 100 percent of the
27costs necessary to comply with Sections 25284.1, 25292.4,
begin delete andend delete
29(c) If the board received the applicant’s grant application on or
30before April 1, 2009, grant funds may be used to reimburse up to
31100 percent of the costs that the applicant incurred after the board
32received the grant application to comply with the Enhanced Vapor
33Recovery Phase II regulations.
34(d) A person or entity is not eligible to receive more than fifty
35thousand dollars ($50,000) in grant funds pursuant to this chapter.
Section 25299.109 of the Health and Safety Code is
38amended to read:
(a) The Petroleum Underground Storage Tank
40Financing Account is hereby created in the State Treasury. All of
P11 1the following moneys shall be deposited in the Petroleum
2Underground Storage Tank Financing Account:
3(1) Federal, state, and local funds transferred for deposit in the
5(2) Repayments of loans and interest and late fees on loans
6issued pursuant to this chapter.
7(3) Repayments of loans and interest and late fees on loans
8issued pursuant to former Chapter 8.5 (commencing with Section
915399.10) of Part 6.7 of Division 3 of Title 2 of the Government
10Code, as that chapter existed on December 31, 2003.
11(4) Moneys collected pursuant to Section 25299.110 and
12subdivision (d) of Section 25299.104.
13(5) Repayments of loan and grant moneys paid to a loan or grant
14applicant to which the applicant is not entitled.
15(6) Notwithstanding Section 16305.7 of the Government Code,
16all interest earned upon moneys that are deposited in the account.
17(7) All unexpended moneys in a subaccount of the account that
18is consolidated into the account by the act adding this paragraph.
19(8) All unexpended moneys in the Petroleum Financing
20Collection Account established pursuant to Section 25299.110, as
21added by Section 1 of Chapter 624 of the Statutes of 2004.
22(b) Upon appropriation by the Legislature, funds in the account
23shall be used by the board to make loans and grants, service loans,
24recover defaulted loan moneys due, protect the state’s position as
25a lender creditor, and administer this chapter.
26(c) The board shall annually make available not more than 15
27percent of the available funds from the account for the purposes
28of providing grants pursuant to this chapter.
29(d) Eight million dollars ($8,000,000) is hereby transferred from
30the fees collected pursuant to Section 25299.43 in the Underground Storage Tank
32Cleanup Fund, to the Petroleum Underground Storage Tank
33Financing Account, and is hereby appropriated for the purposes
34of making grants and loans pursuant to this chapter and
35administering this chapter.
Section 25299.110 of the Health and Safety Code is
Section 25299.110 is added to the Health and Safety
3Code, to read:
To defray the costs of the board in administering
5the loan program created pursuant to this chapter, the board may
6do all of the following:
7(a) Impose reasonable charges on all applications and impose
8the loan fee specified in subdivision (d) of Section 25299.104.
9(b) Recover collection costs from the borrower or other party.
10(c) Earn income on any asset recovered pursuant to a loan
Section 25299.111 of the Health and Safety Code is
Section 25299.113 of the Health and Safety Code is
Section 25299.117 of the Health and Safety Code is