BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 763|
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UNFINISHED BUSINESS
Bill No: SB 763
Author: Fuller (R), et al.
Amended: 9/11/13
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
SENATE FLOOR : 39-0, 5/28/13
AYES: Anderson, Beall, Berryhill, Block, Calderon, Cannella,
Corbett, Correa, De León, DeSaulnier, Emmerson, Evans, Fuller,
Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff,
Jackson, Knight, Lara, Leno, Lieu, Liu, Monning, Nielsen,
Padilla, Pavley, Price, Roth, Steinberg, Torres, Walters,
Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Vacancy
ASSEMBLY FLOOR : Not available
SUBJECT : State Water Resources Control Board: underground
storage tanks
SOURCE : State Water Resources Control Board
DIGEST : This bill extends the sunset date on the Replacing,
Removing, and Upgrading Tanks (RUST) Program, changes the
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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 (PUSTFA) to finance
RUST loans and grants.
Assembly Amendments extend the operation of the loan and grant
program until January 1, 2022, except as specified with regard
to certain authority.
ANALYSIS :
Existing law:
1. Provides for the regulation of 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 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.
This bill:
1. Extends from January 1, 2016, to January 1, 2022, the sunset
date on the RUST Program which authorizes the SWRCB to make
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loans and grants to small businesses to replace, remove, and
upgrade underground storage tanks.
2. Removes the restriction on the SWRCB 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 SWRCB, when the total amount of
grant requests exceed the amount in the 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 PUSTFA.
6. Transfers $8 million from the fees collected in the USTCF to
the PUSTFA, 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.
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
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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.
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 Assembly Appropriations Committee:
One-time transfer of $8 million from the USTCF to finance RUST
loans and grants.
Increased revenue of approximately $1 million over five years
to the RUST Account from increased investment interest and
increased loan rates.
One-time transfer of approximately $3 million in unexpended
funds into the RUST Account from PUSTFA and the administrative
subaccount.
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SUPPORT : (Verified 9/6/13)
State Water Resources Control Board (source)
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 9/12/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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