BILL ANALYSIS Ó
SB 763
Page 1
( Without Reference to File )
SENATE THIRD READING
SB 763 (Fuller)
As Amended September 11, 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
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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
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
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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.
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.
SB 763
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Analysis Prepared by : Manny Hernandez / E.S. & T.M. / (916)
319-3965
FN:
0002846