BILL ANALYSIS �
AB 291
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2011-2012 Regular Session
BILL NO: AB 291
AUTHOR: Wieckowski
AMENDED: June 1, 2011
FISCAL: Yes HEARING DATE: June 27, 2011
URGENCY: No CONSULTANT: Caroll
Mortensen
SUBJECT :
SUMMARY :
Existing law , under the Barry Keene Underground Storage Tank
Cleanup Act (Act) of 1989:
1)Establishes the Underground Storage Tank Cleanup Fund (Fund)
for the deposit of fees collected pursuant to the Act
(Health and Safety Code �25299.50).
2)Establishes a base storage fee of $0.014 (14 mils) for each
gallon of petroleum placed in an underground storage tank
(�25299.41).
3)Establishes, until January 1, 2012, an additional storage
fee of $0.006 (6 mils) for each gallon of petroleum placed
in an underground storage tank for a total of $0.02 per
gallon (�25299.43).
4)Authorizes the State Water Resources Control Board (SWRCB)
to expend the moneys in the Fund, upon appropriation by the
Legislature, for various purposes, including the payment of
claims to aid owners and operators of petroleum underground
storage tanks who take corrective action to clean up
unauthorized releases from those tanks, corrective actions
undertaken by specified agencies, the cleanup and oversight
of unauthorized releases at abandoned tank sites, and grants
to small businesses to retrofit certain hazardous substance
underground storage tanks.
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This bill extends the assessment of the 6 mils per gallon
($0.006) fee in #3 from January 1, 2012, until January 1,
2014.
COMMENTS :
1)Purpose of Bill . According to the author, AB 291 is
necessary to help bridge the gap and promote reform of the
Fund and other related reforms resulting in more efficient
review and closures, where appropriate. There is
insufficient funding to fulfill commitments for the
financial assurance program for operators of USTs for
cleanups of leaks and spills. Based on current demand of
$240 million, the Fund projects $126 million revenue
deficiency for fiscal year 2011-12. The fee extension by AB
291 would provide an estimated $45 million for fiscal year
2011-12. (AB 291 would still leave an estimated $81 million
revenue deficiency for 2011-12, which would be carried
forward.) With an assumed annual demand of $240 million,
plus carried forward deficiency, the revenue deficiency in
following fiscal years 2012-13 and 2013-14 will be partially
offset by AB 291 for all of fiscal year 2012-13 and 1/2 of
fiscal year 2013-14. SWRCB reforms are proceeding with
closures resulting from 5 year review of all sites, and
development of a "low threat" closure policy. Both of these
will reduce Fund expenditures. In the meantime, the Fund is
paying down an accrued backlog of pending claims for
reimbursement of costs.
2)Previous Fee Increase . In 2009, there was an
over-expenditure of the Fund of approximately $80 million
and payments for costs already incurred were suspended.
That caused hardship on the business owners and consulting
firms that performed the work to clean up leaking tanks but
had not been reimbursed for their efforts. Also during that
time an internal audit of the UST Program and the Fund was
being implemented and reforms to improve program
implementation were undertaken. AB 1188 (Ruskin) Chapter
649, Statutes of 2009, increased the petroleum storage fee
by $0.006 per gallon between January 1, 2010, and December
31, 2011, to bridge part of the shortfall. AB 291 seeks to
extend that increase for two more years.
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3)UST reforms ongoing . The SWRCB is working with stakeholders
to make improvements in administration of the fund. The
SWRCB is holding meetings and has developed a task force to
coordinate these efforts. The efforts have cumulated in a
low-risk closure policy that is likely to expedite the
closure process. AB 358 (Smyth) contains provisions to
further streamline and provide guidance to SWRCB on this
issue.
4)UST Program Background . Currently, the UST program is
supported by a 2 cent mils per gallon fee collected
quarterly from petroleum UST owner/operators by the State
Board of Equalization. The fee currently generates about
$270 million per year for claims reimbursement and other
authorized accounts including: the Emergency, Abandoned,
and Recalcitrant (EAR) Account; the Commingled Plume (CP)
Account; the RUST program; and the Drinking Water Treatment
and Research Fund (DWTRF). With the exception of the DWTRF,
which is administered by the Department of Public Health,
these accounts are all managed by the SWRCB.
Claims are paid in priority order based on criteria
established in statute: "A" or first priority is given to
homeowners; "B" or second priority is for small business,
non-profit, or small local government agencies with revenue
below a specified level; "C" or third priority is given to
parties with fewer than 500 employees; and, "D" or lowest
priority is given to all other claimants, including major
corporations and larger local governmental agencies.
Over the life of the Fund, some 19,300 claims for
reimbursement have been filed with the program, and $2.5
billion has been paid to claimants. Cleanups have been
completed at over 6,800 sites, and costs at another 4,100
active sites are currently being paid. A closed site
indicates the contaminants have been investigated,
monitored, and removed to a level protective of health,
safety, and the environment, and allows the property to
continue in its current use or return to productive use to
benefit the community. The rate of new claims is on a
declining trend, with only 208 being filed in fiscal year
2008-09.
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5)Related Legislation .
a) AB 358 (Smyth) set for hearing in the Environmental
Quality Committee on June 27, 2011, proposes improvements
to the UST program to expedite case closures.
b) AB 1188 (Ruskin) Chapter 649, Statutes of 2009,
increased the petroleum storage fee by $0.006 per gallon,
between January 1, 2010, and December 31, 2011.
c) SB 1161 (Lowenthal) Chapter 616, Statutes of 2008,
extended the sunset date for the UST fund to January 1,
2016, changed the definition of "tank" to include
components attached to the tank, and allocated funding to
brownfield cleanups.
d) AB 2729 (Ruskin) Chapter 644, Statutes of 2008, as it
relates to USTs, allocated $10 million to schools and
revises the priority ranking used by the SWRCB by
prioritizing large school districts above otherwise
un-ranked tank owners and operators to receive financial
awards for claims submitted to the SWRCB for UST
remediation costs.
6)Amendments Needed . To ensure that the reforms needed to get
maximum benefit from the fee extension are implemented, AB
291 should be amended to included contingent enactment
language with AB 358 (Smyth) that deals with those reforms.
SOURCE : CORE Environmental Reform
SUPPORT : AF Evans
ALTA EM, Inc.
Buy Rite Gasoline, Inc.
California Association of Environmental Health
Administrators
California Independent Oil Marketers
Association
California Service State and Automotive Repair
Association
Food N. Fuel, Inc.
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Golden State Gasoline, Inc.
J & H Drilling Co., Inc.
Rapid Gas, Inc.
United Oil
Voss Technologies, Inc.
1 Individual
OPPOSITION : None on file