BILL ANALYSIS
Appropriations Committee Fiscal Summary
1906 (Lowenthal)
Hearing Date: 8/17/04 Amended: AI
Consultant: Miriam Barcellona Ingenito Policy
Vote: EQ 6-0
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BILL SUMMARY: AB 1906 would increase the storage fee for a
gallon of petroleum stored in an underground storage take by
$0.001 (one mil) effective January 1, 2005 and an additional
mil effective January 1, 2006.
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Fiscal Impact (in thousands)
Major Provisions 2004-05 2005-06
2006-07 Fund
BOE collection costs $111 $177
$175SF*
SWRCB/Program costs $157 $622
$717 SF*
Additional Revenues ($8,000- ($24,375-
$32,500-
$19,600) $40,000)
$40,000) SF*
Additional Claim Payments ---Balance of revenues less BOE
and--- SF*
SWRBC costs
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*Underground Storage Tank Cleanup Fund (USTF)
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STAFF COMMENTS: Suspense file. Existing law establishes the
Underground Storage Tank (UST) Cleanup Fund (USTCF) in which
a fee of $.012 (12 mils) per gallon of petroleum is
deposited in the USTCF. Monies in the fund are used pay off
claims according to a priority ranking. The highest priority
claimant, Class A, is given to residential tank owners;
Class B is given to small businesses, governmental agencies,
and non-profit organizations with gross receipts below a
specified maximum; Class C is given to businesses,
governmental agencies and non-profit organizations with
fewer than 500 employees; Class D is given to all other
claimants including major oil companies, large corporations,
and local governments with more than 500 employees. The
current fee structure allows for the full coverage of A, B,
and C claims and 14 percent of priority D claims. AB 1906
would increase the fee by one mil on and after January 1,
2005 and another mil on and after January 1, 2006.
As a result of the increased revenues available to pay
additional claims under the Underground Storage Tank (UST)
cleanup program, the State Water Resources Control Board
(SWRCB) indicates that it would need an additional 9.5
position years. The Board of Equalization (BOE) has
indicated that it would incur costs for notifying fee
payers, reviewing returns, computer programming, and
developing and carrying out compliance and audit efforts to
ensure proper reporting. Under the UST program, all of SWRCB
and BOE's costs are taken from the fee revenues before
grants are awarded. STAFF NOTES that the estimated revenues
provided by SWRCB are significantly less than those provided
by BOE (reflected by the range in the Fiscal Impact box
above). If revenues are significantly higher than SWRCB's
estimate (e.g. BOE's), costs to SWRCB would increase
significantly.
According to SWRCB, average priority D claims are about
$200,000 and the fund would need to have an additional $500
million in revenues to pay off all of the remaining claims.
Based on SWRCB's estimates, 2,489 claims would remain
unpaid.