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
begin delete indefinitely andend delete
revise loan eligibility and grant award requirements. The bill would require the board to annually make available not more than
begin delete15%end delete 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. The bill would additionally authorize the board to provide grants and loans for the purposes of compliance with performance standards for the control of gasoline vapor emissions during gasoline marketing operations.
(2) Existing law establishes the Underground Storage Tank Cleanup Fund in the State Treasury and requires specified moneys to be deposited into the fund, including charges imposed upon owners of underground storage tanks. Under existing law, moneys in the fund may be expended by the board, upon appropriation by the Legislature, for various purposes, including for the Barry Keene Underground Storage Tank Cleanup Trust Fund Act of 1989 and for transfer to the financing account.
This bill would transfer $8,000,000 of a specified portion of those charges 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.
P4 1(B) (i) Except as provided in clauses (ii) and (iii), require testing
2of the secondary containment components, including
3under-dispenser and pump turbine containment components, upon
4initial installation of a secondary containment component and
5periodically thereafter, to ensure that the system is capable of
6containing releases from the primary containment until a release
7is detected and cleaned up. The board shall consult with the
8petroleum industry and local government to assess the appropriate
9test or tests that would comply with this subparagraph.
10(ii) Secondary containment components that are part of an
11emergency generator tank system may be tested using enhanced
12leak detection, if the test is performed at the frequency specified
13by the board for testing of secondary containment pursuant to
14Section 2644.1 of Title 23 of the California Code of Regulations.
15If the results of the enhanced leak detection test indicate that any
16component of the emergency generator tank system is leaking
17liquid or vapor, the owner or operator shall take appropriate actions
18to correct the leakage, and the owner or operator shall retest the
19system using enhanced leak detection until the system is no longer
20leaking liquid or vapor.
21(iii) Any tank or piping that is part of an emergency generator
22tank system and located within a structure as described in paragraph
23(2) of subdivision (a) of Section 25283.5 is exempt from the
24secondary containment testing required by clause (i), if the owner
25or operator conducts visual inspections of tank or piping each time
26the tank system is operated, but no less than monthly, and maintains
27a log of inspection results for review by the local agency. This
28clause is not applicable if the board adopts regulations pursuant
29to Section 25299.3 that address the design, construction, upgrade,
30and monitoring of unburied tanks that are part of an emergency
31generator tank system.
32(C) Require annual
testing of release detection sensors and
33alarms, including under-dispenser and pump turbine containment
34sensors and alarms. The board shall consult with the petroleum
35industry and local government to assess the appropriate test or
36tests that would comply with this subparagraph.
37(5) (A) Require an owner or operator of an underground storage
38tank installed after July 1, 1987, if a tank is located within 1,000
39feet of a public drinking water well, as identified pursuant to the
40state GIS mapping database, to have the underground storage tank
P5 1system fitted, on or before July 1, 2001, with under-dispenser
2containment or a spill containment or control system that is
3approved by the board as capable of containing any accidental
5(B) Require all underground
storage tanks installed after January
61, 2000, to have the tank system fitted with under-dispenser
7containment or a spill containment or control system to meet the
8requirements of subparagraph (A).
9(C) Require an owner or operator of an underground storage
10tank that is not otherwise subject to subparagraph (A), and not
11subject to subparagraph (B), to have the underground storage tank
12system fitted to meet the requirements of subparagraph (A), on or
13before December 31, 2003.
14(D) On and after January 1, 2002, no person shall install, repair,
15maintain, or calibrate monitoring equipment for an underground
16storage tank unless that person satisfies both of the following
18(i) The person has fulfilled training
standards identified by the
19board in regulations adopted pursuant to this section.
20(ii) The person possesses a tank testing license issued by the
21board pursuant to Section 25284.4, or a Class “A” General
22Engineering Contractor License, C-10 Electrical Contractor
23License, C-34 Pipeline Contractor License, C-36 Plumbing
24Contractor License, or C-61 (D40) Limited Specialty Service
25Station Equipment and Maintenance Contractor License issued by
26the Contractors’ State License Board.
27(E) Loans and grants for the installation of under-dispenser
28containment or a spill containment or control system shall be made
29available pursuant to Chapter 6.76 (commencing with Section
31(6) Convene a panel of local agency and regional board
32representatives to review existing enforcement authority and
33procedures and to advise the board of any changes that are needed
34to enable local agencies to take adequate enforcement action against
35owners and operators of noncompliant underground storage tank
36facilities. The panel shall make its recommendations to the board
37on or before September 30, 2001. Based on the recommendations
38of the panel, the board shall also establish effective enforcement
39procedures in cases involving fraud.
P6 1(b) On or before July 1, 2001, the Contractors’ State License
2Board, in consultation with the board, the petroleum industry, air
3pollution control districts, air quality management districts, and
4local government, shall review its requirements for petroleum
5underground storage tank system installation and removal
6contractors and make changes, where appropriate, to ensure these
7contractors are qualified.
Section 25299.51 of the Health and Safety Code is
9amended to read:
The board may expend the money in the fund for
11all the following purposes:
12(a) In addition to the purposes specified in subdivisions (c), (d),
13and (e), for the costs of implementing this chapter and for
14implementing Section 25296.10 for a tank that is subject to this
16(b) To pay for the administrative costs of the State Board of
17Equalization in collecting the fee imposed by Article 5
18(commencing with Section 25299.40).
19(c) To pay for the reasonable and necessary costs of corrective
20action pursuant to Section 25299.36, up to one million five hundred
21thousand dollars ($1,500,000) per occurrence. The Legislature
22may appropriate the money in the fund for expenditure by the
23board, without regard to fiscal year, for prompt action in response
24to any unauthorized release.
25(d) To pay for the costs of an agreement for the abatement of,
26and oversight of the abatement of, an unauthorized release of
27hazardous substances from underground storage tanks, by a local
28agency, as authorized by Section 25297.1 or by any other provision
29of law, except that, for the purpose of expenditure of these funds,
30only underground storage tanks, as defined in Section 25299.24,
31shall be the subject of the agreement.
32(e) To pay for the costs of cleanup and oversight of unauthorized
33releases at abandoned tank sites. The board shall not expend more
34than 25 percent of the total amount of money collected and
35deposited in the fund annually for the purposes of this subdivision
36and subdivision (h).
37(f) To pay claims pursuant to Section 25299.57.
38(g) To pay, upon order of the Controller, for refunds pursuant
39to Part 26 (commencing with Section 50101) of Division 2 of the
40Revenue and Taxation Code.
P7 1(h) To pay for the reasonable and necessary costs of corrective
2action pursuant to subdivision (f) of Section 25296.10, in response
3to an unauthorized release from an underground storage tank
4subject to this chapter.
5(i) To pay claims pursuant to Section 25299.58.
6(j) To pay for expenditures by the board associated with
7discovering violations of, and enforcing, or assisting in the
8enforcement of, the requirements of Chapter 6.7 (commencing
9with Section 25280) with regard to petroleum underground storage
11(k) For transfer to the Petroleum Underground Storage Tank
12Financing Account, for purposes of Chapter 6.76 (commencing
13with Section 25299.100).
(a) Except as provided in subdivisions (b) and (c),
17this chapter shall remain in effect only until January 1, 2016, and
18as of that date is repealed, unless a later enacted statute, which is
19enacted before January 1, 2016, deletes or extends that date.
20(b) Notwithstanding subdivision (a), Article 1 (commencing
21with Section 25299.10), Article 2 (commencing with Section
2225299.11), and Article 4 (commencing with Section 25299.36)
23shall not be repealed and shall remain in effect on January 1, 2016.
24(c) The repeal of certain portions of this chapter does not
25terminate any of the following rights, obligations, or authorities,
26or any provision necessary to carry out these rights and obligations:
27(1) The filing and payment of claims against the fund, including
28the costs specified in subdivisions (c), (e), and (h) of Section
2925299.51, claims filed under Section 25299.50.3, and claims for
30commingled plumes, as specified in Article 11 (commencing with
31Section 25299.90), until the moneys in the fund are exhausted.
32Upon exhaustion of the fund, any remaining claims shall be invalid.
33(2) The repayment of loans, outstanding as of January 1, 2016,
34due and payable to the board.
35(3) The recovery of moneys reimbursed to a claimant to which
36the claimant is not entitled, or the resolution of any cost recovery
38(4) The collection of unpaid fees that are imposed pursuant to
39Article 5 (commencing with Section 25299.40), as that article read
40on December 31, 2015, or have become due before January 1,
P8 12016, including any interest or penalties that accrue before, on, or
2after January 1, 2016, associated with those unpaid fees.
3(5) (A) The filing of an application for funds from, and the
4making of payments from, the Underground Storage Tank
5Petroleum Contamination Orphan Site Cleanup Fund pursuant to
6Section 25299.50.2, any action for the recovery of moneys paid
7pursuant to Section 25299.50.2 to which the recipient is not
8entitled, and the resolution of that cost recovery action.
9(B) Upon liquidation of funds in the Underground Storage Tank
10Petroleum Contamination Orphan Site Cleanup Fund, the obligation
11to make a payment from the Underground Storage Tank Petroleum
12Contamination Orphan Site Cleanup Fund is terminated.
13(6) (A) The payment of loans and grants, consistent with the
14terms of agreements that were effective prior to January 1, 2016,
15from the Underground Storage Tank Cleanup Fund, pursuant to
16this chapter or the Petroleum Underground Storage Tank Financing
17Account pursuant to Chapter 6.76 (commencing with Section
1825299.100). Upon exhaustion of the Underground Storage Tank
19Cleanup Fund, any remaining claims for payment of grants or
20loans shall be invalid.
21(B) The amount of money disbursed for grants and loans
22pursuant to Chapter 6.76 (commencing with Section 25299.100)
23shall not exceed the sum of following:
24(i) The amount that reverts to the Underground Storage Tank
25Cleanup Fund pursuant to Section 25299.111.
26(ii) Amounts recovered through the repayment of loans granted
27pursuant to Chapter 6.76 (commencing with Section 25299.100).
28(iii) The resolution of any cost recovery action filed prior to
29January 1, 2016, or the initiation of an action or other collection
30process to recover defaulted loan moneys due to the board or to
31recover money paid to a grant or loan recipient pursuant to Chapter
326.76 (commencing with Section 25299.100) to which the recipient
33is not entitled.
34(d) The board shall continuously post and update on its Internet
35Web site, but at a minimum, annually on or before September 30,
36information that describes the status of the fund and shall make
37recommendations, when appropriate, to improve the efficiency of
Section 25299.102 of the Health and Safety Code is
3amended to read:
The board shall only make loan funds available to
5loan applicants that meet all of the following eligibility
7(a) The loan applicant is a small business, either as defined in
8Section 632 of Title 15 of the United States Code, and in the federal
9regulations adopted to implement that section, as specified in Part
10121 (commencing with Section 121.101) of Chapter
begin delete 1end delete of Title
1113 of the Code of Federal Regulations, or employs fewer than 500
12full-time and part-time employees, is independently owned and
13operated, and is not dominant in its field of operation. In either
14case, the principal office of the small business shall be domiciled
15in the state, and the officers of the small business shall be domiciled
16in this state. The board shall give priority to awarding loans to
17small businesses that meet the definition of small business specified
18in subdivision (d) of Section 14837 of the Government Code.
19(b) The loan applicant owns or operates a project tank.
20(c) The loan applicant demonstrates the ability to repay the loan,
21and the availability of adequate collateral to secure the loan.
22(d) All tanks owned and operated by the loan applicant are
23subject to compliance with Chapter 6.7 (commencing with Section
2425280), and the regulations adopted pursuant to that chapter.
25(e) The loan applicant has complied, or will comply, with the
26financial responsibility requirements specified in Section 25299.31
27and the regulations adopted pursuant to this section.
Section 25299.103 of the Health and Safety Code is
30amended to read:
(a) A complete loan application shall include all
32of the following:
33(1) Evidence of eligibility.
34(2) An environmental audit, as specified in Section 5260 of Title
3510 of the California Code of Regulations.
36(3) Financial and legal documents necessary to demonstrate the
37applicant’s ability to repay and provide collateral for the loan. The
38board shall develop a standard list of documents required of all
39applicants, and may also request from individual applicants
40additional financial and legal documents not provided on this list.
P10 1(4) An explanation of the reasons why the project tank is not in
2compliance with applicable local, state, or federal standards, and
3evidence that tanks not included in the list of project tanks are
4currently in compliance with applicable local, state, or federal
6(5) A detailed cost estimate of the tasks that are required to be
7completed in order for the project tanks to comply with applicable
8local, state, or federal standards.
9(6) Any other information that the board determines to be
10necessary to include in an application form.
11(b) Notwithstanding paragraph (4) of subdivision (a), the board
12may not refuse to grant a loan to an applicant solely because the
13applicant has failed to obtain a permit pursuant to the requirements
14of Chapter 6.7 (commencing with Section 25280).
Section 25299.104 of the Health and Safety Code is
17amended to read:
(a) The minimum amount that the board may loan
19an applicant is ten thousand dollars ($10,000), and the maximum
20amount that the board may loan an applicant is seven hundred fifty
21thousand dollars ($750,000).
22(b) The term of the loan shall be for a maximum of 20 years if
23secured by real property, and for 10 years if not secured by real
24property. The interest rate for loans shall be set at the rate equal
25to one-half of the most recent general obligation bond rate obtained
26by the office of the Treasurer at the time of the loan commitment.
27(c) Loan funds may be used to finance up to 100 percent
28costs necessary to upgrade, remove, or replace project tanks,
29including corrective actions, to meet applicable local, state, or
30federal standards, including, but not limited to, any design,
31construction, monitoring, operation, or maintenance requirements
32adopted pursuant to Sections 25284.1, 25292.4, and 41954.
33(d) The board may charge a loan fee to loan applicants of up to
342 percent of the requested loan amount. The loan fee shall be
35deposited in the Petroleum Underground Storage Tank Financing
Section 25299.105 of the Health and Safety Code is
5amended to read:
(a) The board shall make grant funds available
7from the Petroleum Underground Storage Tank Financing Account
8to eligible grant applicants who meet all of the following eligibility
10(1) The grant applicant is a small business, pursuant to the
12(A) The grant applicant meets the conditions for a small business
13concern as defined in Section 632 of Title 15 of the United States
14Code, and in the federal regulations adopted to implement that
15section, as specified in Part 121 (commencing with Section
16121.101) of Chapter I of Title 13 of the Code of Federal
18(B) The grant applicant employs fewer than 20 full-time and
19part-time employees, is independently owned and operated, and
20is not dominant in its field of operation.
21(2) The principal office of the grant applicant is domiciled in
22the state and the officers of the grant applicant are domiciled in
24(3) All tanks owned and operated by the grant applicant are
25subject to compliance with Chapter 6.7 (commencing with Section
2625280) and the regulations adopted pursuant to that chapter.
27(4) The facility where the project tank is located has sold at
28retail less than 900,000 gallons of gasoline annually for each of
29the two years preceding the submission of the grant application.
30The number of gallons sold shall be based upon taxable sales
31figures provided to the State Board of Equalization for that facility.
32(5) The grant applicant owns or operates a tank that is in
33compliance with all of the following:
34(A) Section 41954.
35(B) Any of the following:
36(i) Section 25290.1.
37(ii) Section 25290.2.
38(iii) Section 25291.
39(iv) Subdivisions (d) and (e) of Section 25292.
P12 1(C) Any
regulation implementing the applicable sections
2required for compliance with subparagraphs (A) and (B).
3(6) The facility where the project tank is located was legally in
4business retailing gasoline after January 1, 1999.
5(b) Grant funds may only be used to pay the costs necessary to
6comply with the requirements of Section 25284.1, 25292.4,
725292.5, or 41954.
Section 25299.106 of the Health and Safety Code is
10amended to read:
A complete grant application shall include all of
12the following information:
13(a) Evidence of eligibility.
14(b) The board shall develop a standard list of documents required
15of all applicants, and may also request from individual applicants
16additional financial and legal documents not provided on this list.
17(c) An explanation of the actions the applicant is required to
18take to comply with the requirements of Sections 25284.1 and
1925292.4 or Section 41954.
20(d) A detailed cost estimate of the actions that are required to
21be completed for the project tanks to comply with applicable local,
22state, or federal standards, if applicable.
23(e) Any other information that the board determines to be
24necessary to include in an application form.
Section 25299.107 of the Health and Safety Code is
27amended to read:
(a) The minimum amount that the board may grant
29an applicant is three thousand dollars ($3,000), and the maximum
30amount that the board may grant an applicant is fifty thousand
32(b) Grant funds may be used to finance up to 100 percent of the
33costs necessary to comply with Sections 25284.1, 25292.4,
3425292.5, and 41954.
35(c) If the board received the applicant’s grant application on or
36before April 1, 2009, grant funds may be used to reimburse up to
37100 percent of the costs that the applicant incurred after the board
38received the grant application to comply with the Enhanced Vapor
39Recovery Phase II regulations.
P13 1(d) A person or entity is not eligible to receive more than fifty
2thousand dollars ($50,000) in grant funds pursuant to this chapter.
Section 25299.109 of the Health and Safety Code is
5amended to read:
(a) The Petroleum Underground Storage Tank
7Financing Account is hereby created in the State Treasury. All of
8the following moneys shall be deposited in the Petroleum
9Underground Storage Tank Financing Account:
10(1) Federal, state, and local funds transferred for deposit in the
12(2) Repayments of loans and interest and late fees on loans
13issued pursuant to this chapter.
14(3) Repayments of loans and interest and late fees on loans
15issued pursuant to former Chapter 8.5 (commencing with Section
1615399.10) of Part 6.7 of Division 3 of Title 2 of the Government
17Code, as that chapter existed on December 31, 2003.
18(4) Moneys collected pursuant to Section 25299.110 and
19subdivision (d) of Section 25299.104.
20(5) Repayments of loan and grant moneys paid to a loan or grant
21applicant to which the applicant is not entitled.
22(6) Notwithstanding Section 16305.7 of the Government Code,
23all interest earned upon moneys that are deposited in the account.
24(7) All unexpended moneys in a subaccount of the account that
25is consolidated into the account by the act adding this paragraph.
26(8) All unexpended moneys in the Petroleum Financing
27Collection Account established pursuant to Section 25299.110, as
28added by Section 1 of Chapter 624 of the Statutes of 2004.
29(b) Upon appropriation by the Legislature, funds in the account
30shall be used by the board to make loans and grants, service loans,
31recover defaulted loan moneys due, protect the state’s position as
32a lender creditor, and administer this chapter.
33(c) The board shall annually make available not more than
begin delete15end delete
34 percent of the available funds from the account for the purposes
35of providing grants pursuant to this chapter.
36(d) Eight million dollars
($8,000,000) is hereby transferred from
37the portion of the fees collected pursuant to subdivisions (a) to (e),
38inclusive, of Section 25299.43 in the Underground Storage Tank
39Cleanup Fund, to the Petroleum Underground Storage Tank
40Financing Account, and is hereby appropriated for the purposes
P14 1of making grants and loans pursuant to this chapter and
2administering this chapter.
Section 25299.110 of the Health and Safety Code is
Section 25299.110 is added to the Health and Safety
8Code, to read:
To defray the costs of the board in administering
10the loan program created pursuant to this chapter, the board may
11do all of the following:
12(a) Impose reasonable charges on all applications and impose
13the loan fee specified in subdivision (d) of Section 25299.104.
14(b) Recover collection costs from the borrower or other party.
15(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