BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 96|
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THIRD READING
Bill No: AB 96
Author: Ruskin (D)
Amended: 7/1/09 in Senate
Vote: 27 - Urgency
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 6-1, 5/20/09
AYES: Simitian, Ashburn, Corbett, Hancock, Lowenthal,
Pavley
NOES: Runner
SENATE APPROPRIATIONS COMMITTEE : 12-1, 6/29/09
AYES: Kehoe, Corbett, Denham, Hancock, Leno, Oropeza,
Price, Runner, Walters, Wolk, Wyland, Yee
NOES: Cox
ASSEMBLY FLOOR : 76-0, 4/30/09 - See last page for vote
SUBJECT : Gasoline: underground storage tanks
SOURCE : Author
DIGEST : This bill transfers $8 million from an
administrative subaccount to the Petroleum Underground
Storage Tank Financing Account and appropriates those funds
for grants and loans to support compliance with an existing
regulatory requirement on gas station owners. The bill
also extends the sunset of the grant and loan program from
2011 to 2016.
ANALYSIS :
CONTINUED
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Existing Law
1.Establishes a grant and loan program to replace, remove
or upgrade underground storage tanks (RUST) at the State
Water Resources Control Board (SWRCB).
2.Establishes criteria for the grants that, among other
things, limit awards to small businesses, as defined,
including those with less than 20 employees and who sell
less than 900,000 gallons of gasoline annually and limits
the grant award to $50,000.
3.Establishes loan criteria that, among other things,
limits the award of loans to businesses with fewer than
500 employees with a maximum loan amount of $750,000.
4.Requires the Air Resources board (ARB) to adopt
procedures for determining the compliance of any system
designed for the control of gasoline vapor emissions
during gasoline marketing operations, including storage
and transfer operations, with performance standards to
achieve or maintain any applicable ambient air quality
standard. ARB must also adopt standards to ensure that
gasoline vapor control systems do not cause excessive
gasoline liquid spillage and excessive evaporative
emissions under certain conditions.
5.Prohibits ARB from requiring a gasoline dispensing
facility (GDF) to undergo an Enhanced Vapor Recovery
(EVR) Phase II upgrade until April 1, 2011, under certain
conditions (e.g., annual gasoline throughout of 240,000
gallons or less; operates in a county with a population
less than 100,000; operates in a basin not classified as
nonattainment for ozone).
This bill:
1.Transfers $8 million from the administration subaccount
of the Petroleum Underground Storage Tank Financing
Account to the grants and loans subaccount for use in the
RUST program.
2.Specifies that the monies transferred may be issued as
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grants and loans and makes them available during the
2008-09 and 2009-10 fiscal years.
3.Extends the deadline for applications for grant funds
from April 1, 2009 to June 30, 2009.
4.Extends the sunset date for the RUST program from January
1, 2011, to January 1, 2016.
Background and RUST Program . The SWRCB operates the RUST
program to assist small, independent gas retailers, who
cannot otherwise afford the expense associated with
required tank and related equipment (including EVR)
upgrades and/or removal, to remain in business. The RUST
program helps protect California's drinking water from
contaminants and ensures that necessary fuel supplies,
particularly in rural areas, are maintained.
During fiscal year 2006-07, the RUST program received 25
loan applications totaling $5,379,124. Of those
applications, 24 loans were approved totaling $5,359,124,
with an average loan amount of $223,297. During the same
year, 70 grant applications were received totaling
$3,285,889. Of those applications, 49 grants were approved
totaling $2,288,889, with an average grant amount of
$46,651.
The grants awarded based upon review of a complete
application. The applicant is notified and may begin work
and/or purchase equipment. Then the applicant submits
receipts and is reimbursed for the actual cost of the
project. Grant funds can not be used for work that has
been completed before the application is submitted.
The RUST loan and grant program was initially funded
through the SWRCB's Underground Storage Tank Clean-up Fund.
It currently maintains its balance from loan principal and
interest payments. There is an $11.2 million balance in
the administration subaccount that exceeds SWRCB's costs to
administer the program by about $8 million. This is the
funding that is earmarked by this bill. The RUST program
is currently set to sunset in 2011, this bill extends that
sunset until 2016.
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Background on EVR . Current law provides that a vapor
recovery system "consists of a vapor gathering system
capable of collecting hydrocarbon vapors and gases
discharged and a vapor disposal system capable of
processing such hydrocarbon vapors and gases so as to
prevent their emission into the atmosphere?." According to
the ARB in February 2000, vapor recovery systems have been
used in California to control emissions for over 20 years,
and "feasibility of the first vapor recovery systems was
studied at the district level, particularly in the San
Diego and Bay Area districts, in the early 1970s." The ARB
has been required since 1975 to adopt procedures for
determining compliance of a system with performance
standards to achieve or maintain any applicable ambient air
quality standard (#4 of "Existing Law").
Since each gasoline transfer leads to displaced vapors,
vapor recovery is used throughout the gasoline marketing
chain. Phase I vapor recovery includes filling the cargo
tank at the loading rack of a refinery terminal or bulk
plant, as well as transfer from the cargo tanker to the
GDF. Phase II vapor recovery controls emissions from
gasoline transfer at the GDF to vehicles.
ARB adopted EVR regulations in Marcy 2000 for about 11,000
GDFs to reduce gasoline vapor emissions with upgraded
equipment by April 1, 2009. ARB certified the first
acceptable system to meet the requirements April 1, 2005.
Two additional systems were certified after that: one in
November 2007 and another in October 2008. According to
ARB, all three systems are in the same equipment and
installation cost range for service stations, and the
typical costs for equipment and installation is about
$50,000.
Those areas of the state with additional time to apply
include: (1) GDFs located in counties that are in air
districts currently in attainment for the state ozone
standard where EVR is not required (Del Norte, Humboldt,
Lake, Mendocino, and Trinity counties); (2) GDFs located in
air basins not designated nonattainment for ozone with
lower gasoline sales in counties with a population of less
than 100,000 with an April 1, 2011 EVR deadline (Alpine,
Lassen, Modoc, Plumas, and Sierra counties), and (3) GDFs
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located in air districts designated nonattainment for ozone
effective 2007 with an EVR July 1, 2011, deadline (Northern
Sonoma, San Luis Obispo, and Siskiyou counties).
According to ARB, the EVR regulations, when fully
implemented, will result in the removal of 25 tons of
smog-forming and toxic emissions statewide - which is
equivalent to removing one million cars from the road. In
the South Coast Air Quality Management district, about 16.7
tons of smog-forming volatile organic compounds (VOCs) are
released into the air each day from gasoline dispensing -
more than three times the amount from all seven major
refineries in the South Coasts region.
Related Legislation
SB 155 (Cox), Chapter 702, Statutes of 2008 . Extended the
deadline to April 1, 2011, for smaller GDFs meeting certain
requirements in a basin not classified as nonattainment for
ozone. Passed the Senate Floor with a vote of 39-0 on
8/19/08.
SB 507 (Cox), 2009-10 Session . Prohibits ARB from
requiring a GDF that does not meet all the requirements of
that provision from undergoing an EVR Phase II upgrade
until April 1, 2010. (In Senate Environmental Quality
Committee)
AB 453 (Garrick), 2009-10 Session . Prohibits an air
pollution control district from imposing fines exceeding
$1,000 on a GDF for failure to meet the April 1, 2009, EVR
Phase II upgrade, as specified, and includes other
provisions relating to these penalties and sunsets January
1, 2010. (In Senate Environmental Quality Committee)
SCR 38 (Wright), 2009-10 Session . Requests an enforcement
delay for the EVR Phase II requirements until October 2010.
(In Senate Environmental Quality Committee)
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
Fiscal Impact (in thousands)
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Major Provisions 2009-10 2010-11
2011-12 Fund
Additional grants $8,000
Special*
and loans
Grant and loan pro- $8,500 per year from 2011 and
2016 Special*
gram extension
*Petroleum Underground Storage Tank Financing Account
SUPPORT : (Verified 7/1/09)
American Lung Association
Ben Lomond Gas Station
California Air Pollution Control Officers Association
Churn Creek Chevron
Clean Power Campaign
Coalition for Clean Air
Downtown Car Wash
Friends of the Earth
Fullerton 76 Station
Trini's Beacon Station
Union of Concerned Scientists
Valley Improvement Company
ARGUMENTS IN SUPPORT : According to the author's office,
many small GDF owners have had difficulty complying with
the EVR Phase II requirements due to a crunched credit
market and because the least expensive EVR system was not
certified by ARB until October 2008. This bill provides a
funding source to assist those GDF operators.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Chesbro,
Conway, Cook, Coto, Davis, De La Torre, De Leon, DeVore,
Duvall, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,
Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,
Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
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Huber, Huffman, Jeffries, Jones, Knight, Krekorian, Lieu,
Logue, Bonnie Lowenthal, Ma, Mendoza, Monning, Nava,
Niello, Nielsen, John A. Perez, V. Manuel Perez,
Portantino, Price, Ruskin, Salas, Saldana, Silva,
Skinner, Solorio, Audra Strickland, Swanson, Torlakson,
Torres, Torrico, Tran, Villines, Yamada, Bass
NO VOTE RECORDED: Carter, Miller, Nestande, Smyth
TSM:cm 7/1/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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