BILL ANALYSIS Ó
SB 763
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SENATE THIRD READING
SB 763 (Fuller)
As Amended August 19, 2013
Majority vote
SENATE VOTE :39-0
ENVIRONMENTAL SAFETY 6-0
APPROPRIATIONS 17-0
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|Ayes:|Alejo, Dahle, Bloom, |Ayes:|Gatto, Harkey, Bigelow, |
| |Lowenthal, Stone, Ting | |Bocanegra, Bradford, Ian |
| | | |Calderon, Campos, |
| | | |Donnelly, Eggman, Gomez, |
| | | |Hall, Holden, Linder, |
| | | |Pan, Quirk, Wagner, Weber |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Extends the sunset date on the Replacing, Removing,
and Upgrading Tanks (RUST) Program, changes the interest rate on
RUST loans, reduces the share of funds that may be used for RUST
grants, and transfers $8 million from the Underground Storage
Tank Cleanup Fund (USTCF) to the Petroleum Underground Storage
Tank Financing Account to finance RUST loans and grants.
Specifically, this bill :
1)Extends from January 1, 2016, to January 1, 2022, the sunset
date on the RUST Program which authorizes the State Water
Resources Control Board (State Water Board) to make loans and
grants to small businesses to replace, remove, and upgrade
underground storage tanks.
2)Removes the restriction on the State Water Board from making a
RUST loan only to those applicants who cannot obtain a loan
from a private institution, the California Pollution Control
Financing Authority, or any other governmental board.
3)Sets the interest rate for RUST loans at one-half of the most
recent General Obligation Bond rate obtained by the Office of
the State Treasurer at the time of the loan commitment.
4)Removes the authority of the State Water Board, when the total
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amount of grant requests exceed the amount in the Petroleum
Underground Storage Tank Financing Account (PUSTFA), to adopt
a priority ranking list to award grants based on the
demonstrated financial hardship of the eligible grant
applicant or the impact on the local community.
5)Reduces from 33% to 25% the maximum share of RUST grants that
can be awarded from the Petroleum Underground Storage Tank
Financing Account.
6)Transfers $8 million from the fees collected in the
Underground Storage Tank Cleanup Fund to the Petroleum
Underground Storage Tank Financing Account, and appropriates
this sum for RUST loans and grants.
7)Repeals the Petroleum Financing Collection Account in the
California Economic Development Grant and Loan Fund.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)One-time transfer of $8 million from the USTCF to finance RUST
loans and grants.
2)Increased revenue of approximately $1 million over five years
to the RUST Account from increased investment interest and
increased loan rates.
3)One-time transfer of approximately $3 million in unexpended
funds into the RUST Account from PUSTFA and the administrative
subaccount.
COMMENTS :
1)According to the author and the State Water Board, the
purposes of this measure are to improve the efficiency and
sustainability of the RUST Program. Extending the program and
increasing its efficiency would enable the State Water Board
to help more small businesses remove, replace, or upgrade
their underground storage tanks to meet regulatory
requirements, thereby helping to protect public health and the
environment.
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2)Underground storage tanks (UST) and their components have the
potential of leaking gasoline, diesel fuels, fuel additives
and other hazardous substances into the soil and groundwater,
presenting a risk to public health and the environment. The
cost of replacing, removing, or upgrading these tanks can be
significant. Federal and state laws require owners of a
petroleum UST to maintain financial responsibility to pay for
the damages arising from their tank operations.
3)Under the RUST Program, the State Water Board provides
low-interest loans and grants to small businesses (such as gas
stations) to assist them in upgrading, removing, or replacing
their USTs to meet applicable local, state, or federal
standards and to conduct corrective actions.
RUST loans are available to companies with fewer than 500
employees and the loans may range from $10,000 to $750,000.
The interest rate is the current rate earned by the Surplus
Money Investment Fund (approximately one-fourth of 1%).
During Fiscal Year 2011-12, the RUST Program approved 10
loans, awarding a total of $2.1 million (for an average loan
amount of $210,023). These 10 loans made it possible to
replace or upgrade 26 project tanks. In contrast, during
Fiscal Year 2008-09, the RUST Program approved 29 loans,
awarding a total of $4.7 million, which made it possible to
replace or upgrade 87 project tanks.
RUST grants are given to small businesses that are independently
owned and operated with less than 20 employees, and the grants
range from $3,000 to $50,000. During Fiscal Year 2011-12, the
RUST Program approved 31 grants (averaging $46,000 per grant),
awarding a total of $1.4 million in grants, which made it
possible to remove or upgrade 69 project tanks. In contrast,
during Fiscal Year 2009-10, the RUST Program approved 179
grants, awarding $7.3 million in grants, which made it
possible to replace, remove, or upgrade 466 project tanks.
Analysis Prepared by : Manny Hernandez / E.S. & T.M. / (916)
319-3965 FN: 0002097
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