BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 763|
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THIRD READING
Bill No: SB 763
Author: Fuller (R)
Amended: 4/23/13
Vote: 21
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 9-0, 5/1/13
AYES: Hill, Gaines, Calderon, Corbett, Fuller, Hancock,
Jackson, Leno, Pavley
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/23/13
AYES: De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg
SUBJECT : State Water Resources Control Board: underground
storage tanks
SOURCE : State Water Resources Control Board
DIGEST : This bill deletes the sunset date of the Replacing,
Removing, or Upgrading Underground Storage Tanks Program (RUST
Program) and revises loan eligibility and grant award
requirements. Consolidates two accounts that fund the RUST
Program and makes an $8 million appropriation from the
Underground Storage Tank Cleanup Fund (USTCF) to the RUST
Program for grants and loans.
ANALYSIS :
Existing law:
1. Provides for the regulation of underground storage tanks
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(USTs) by the State Water Resources Control Board (SWRCB).
2. Requires, until January 1, 2016, 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 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 (PUSTFA) and, upon appropriation by the Legislature,
requires moneys in the account to be used by SWRCB 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 SWRCB.
6. Requires SWRCB annually to make available not more than 33%
of the available funds from the account for the purposes of
providing grants through the RUST program.
7. Establishes the UST Cleanup Fund in the State Treasury and
requires specified moneys to be deposited into the fund.
Monies in the fund may be expended by SWRCB, 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
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the time of commitment.
4. Requires interest earned from monies in the financing
account to be deposited into that account and eliminates the
existing subaccount.
5. Requires loan fees and various other monies received in the
implementation of the loan and grant program to be deposited
into the account.
6. Specifies that monies in the account are permitted to be
used, in addition to making loans and grants, to service
loans, to recover defaulted loan monies, 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.
Background
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 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,
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under-dispenser containment boxes/pans, electronic monitoring
systems, and enhanced vapor recovery systems and conduct
enhanced leak detection tests.
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.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
One-time appropriation of $8 million from the USTCF (special)
to fund the RUST Program.
Increased revenues of approximately $1.1 million over five
years to the PUSTFA (special) from increased investment
interest and increased loan rates.
One-time increase of $2.7 million into the RUST Account from
PUSTFA.
On-going increased annual expenditures of approximately
$400,000 from the RUST Account for administrative costs that
are currently funded by the PUSTFA.
SUPPORT : (Verified 5/23/13)
State Water Resources Control Board (source)
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California Independent Oil Marketers Association
California Service Station and Auto Repair Association
CORE Environmental Reform, Inc.
ARGUMENTS IN SUPPORT : According to the author's office, this
bill proposes to delete the sunset date of the RUST program and
makes various changes to the program to improve its
effectiveness and efficiency, and ensures its long-term
viability. Extending the program and increasing its efficiency
enables 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.
RM:d 5/24/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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