BILL ANALYSIS                                                                                                                                                                                                    



                                                                SB 763
                                                                       

                      SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                              Senator Jerry Hill, Chair
                              2013-2014 Regular Session
                                           
           BILL NO:    SB 763
           AUTHOR:     Fuller
           AMENDED:    April 23, 2013
           FISCAL:     Yes               HEARING DATE:     May 1, 2013
           URGENCY:    No                CONSULTANT:       Rachel Machi
                                                               Wagoner  
            
            SUMMARY  :    STATE WATER RESOURCES CONTROL BOARD: UNDERGROUND  
                       STORAGE TANKS
           
            Existing law  :   

           1) Provides for the regulation of underground storage tanks  
              (USTs) by the State Water Resources Control Board (SWRCB). 

           2) Until January 1, 2016, requires SWRCB to conduct a loan and  
              grant program to assist small businesses in upgrading,  
              replacing, or removing tanks meeting applicable local,  
              state, or federal standards through the Replacing,  
              Removing, or Upgrading Underground Storage Tanks Program  
              (RUST program).

           3) Requires that the interest rate for loans given through the  
              RUST program be set at the rate earned by the Surplus Money  
              Investment Fund at the time of the loan commitment. 

           4) Establishes the Petroleum Underground Storage Tank  
              Financing Account (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 RUST  
              program. 

           5) 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.

           6) Requires the board annually to make available not more than  
              33% of the available funds from the account for the  









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              purposes of providing grants through the RUST program.

           7) Establishes the Underground Storage Tank Cleanup Fund (UST  
              Cleanup Fund) in the State Treasury and requires specified  
              moneys to be deposited into the fund.  Moneys in the fund  
              may be expended by the board, upon appropriation by the  
              Legislature, for purposes of the Barry Keene Underground  
              Storage Tank Cleanup Trust Fund Act of 1989.

            This bill  :  

           1) Extends the RUST loan and grant program indefinitely and  
              revises loan eligibility and grant award requirements.

           2) Requires SWRCB to annually make available not more than 15%  
              of the available funds from the account for the purposes of  
              providing grants.

           3) Sets the interest rate for loans given through the RUST  
              program at the rate equal to half of the most recent  
              general obligation rate obtained by the office of the  
              Treasurer at the time of commitment.

           4) Requires interest earned from moneys in the financing  
              account to be deposited into that account and eliminates  
              the existing subaccount.

           5) Requires loan fees and various other moneys received in the  
              implementation of the loan and grant program to be  
              deposited into the account.

           6) Specifies that moneys in the 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.

           7) Transfers $8,000,000 from the UST Cleanup Fund to the  
              financing account and appropriates these funds for the  
              purpose of making grants and loans through the RUST program  
              and administering specific provisions, as prescribed.











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            COMMENTS  :

            1) Purpose of Bill  .  According to the author, SB 763 proposes  
              to delete the sunset date of the RUST program and make  
              various changes to the program to improve its effectiveness  
              and efficiency, and ensure its long-term viability.   
              Extending the program and increasing its efficiency would  
              enable the SWRCB to continue to help small businesses  
              upgrade, remove, or replace their USTs to meet regulatory  
              requirements, thereby continuing to help protect public  
              health and the environment.  

            2) RUST program  .  Federal and state laws require every owner  
              and operator of a petroleum UST to maintain financial  
              responsibility to pay for any damages arising from their  
              tank operations.  The UST Cleanup Fund Act was created by  
              the California Legislature to provide a means for petroleum  
              UST owners and operators to meet the federal and state  
              requirements and pay for the cleanup of contaminated soil  
              and groundwater when a leak is discovered.  The UST Cleanup  
              Fund is administered by SWRCB.

              In addition, SWRCB's Division of Financial Assistance  
              offers direct grants and loans to assist small gas station  
              owners and operators to comply with Underground Storage  
              Tank (UST) regulatory requirements through the RUST  
              program.  This program is available for upgrades, not costs  
              associated with remediation after a leak, with the intent  
              of helping to prevent contamination from ever occurring. 


              RUST grants are given to small businesses that are  
              independently owned and operated with less than 20  
              employees.  The grants range from $3,000 to $50,000.  RUST  
              grant funds may be used to finance up to 100% of the costs  
              necessary to upgrade USTs by installing containment sumps,  
              double-walled piping, dispensers, under-dispenser  
              containment boxes/pans, electronic monitoring systems, and  
              enhanced vapor recovery systems and conduct enhanced leak  
              detection tests.










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              RUST loans are given to companies that have fewer than 500  
              full or part-time employees and may range from $10,000 to  
              $750,000.  RUST loans may be used to finance up to 100% of  
              the costs necessary to upgrade, remove, or replace USTs,  
              including corrective actions, to meet applicable local,  
              state, or federal standards, including, but not limited to,  
              any design, construction, monitoring, operation, or  
              maintenance requirements adopted pursuant to Health and  
              Safety Code Sections 25284.1 and 25292.4.  Typical eligible  
              costs are replacing USTs, installing containment sumps,  
              double-walled piping, dispensers, under-dispenser  
              containment boxes/pans, electronic monitoring systems, and  
              enhanced vapor recovery systems, and conducting enhanced  
              leak detection tests.




           SOURCE  :        State Water Resources Control Board  

           SUPPORT  :       None on file  

           OPPOSITION  :    None on file