BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          AB 291 (Wieckowski)
          
          Hearing Date: 08/15/2011        Amended: 07/07/2011
          Consultant: Brendan McCarthy    Policy Vote: EQ 5-0
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          ____
          BILL SUMMARY: AB 291extends the sunset of a portion of the tax 
          paid by underground petroleum storage tank operators, to January 
          1, 2014.
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2011-12      2012-13       2013-14     Fund
           
          Tax revenues           ($180,000) over two calendar yearsSpecial 
          *                                                       
          * Underground Storage Tank Cleanup Fund.
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          ____

          STAFF COMMENTS: 
          
          Under current law, the State Water Resources Control Board 
          (State Water Board) provides grants and loans to replace, 
          remove, or upgrade underground storage tanks and related 
          infrastructure used to store gasoline and diesel fuel. Under the 
          program, priority for funding is first given to individual home 
          owners; then small businesses, non-profit organization, and 
          small local government agencies; and then for larger businesses 
          and government agencies. The maximum loan amount is capped at 
          $750,000. 

          This program is supported by a tax paid by owners of underground 
          petroleum storage tanks. Currently, the tax is set at $0.020 per 
          gallon of petroleum placed in an underground storage tank. The 
          tax is made up of a base tax of $0.014 per gallon that will 
          sunset in 2016, and a temporary increase of $0.006 (implemented 
          by AB 1188, Ruskin, 2009) that will sunset on January 1, 2012.

          This bill extends the sunset of the supplemental tax of $0.006 
          to January 1, 2014.









          AB 291 (Wieckowski)
          Page 1


          The State Water Board indicates that projected revenues from the 
          extension of the supplemental tax will be about $180 million 
          over two years.

          In recent years, program expenditures have exceeded revenues, in 
          part due to poor program oversight by the State Water Board and 
          in part due to unforeseen cost increases to clean up 
          contaminated sites. Based on the results of a recent program 
          audit, the State Water Board has made several changes to the 
          program, to better manage available funding and to speed up the 
          process for completing cleanup projects. The increased revenues 
          from this bill will offset a large portion of the program 
          deficiency and the State Water Board believes that recent 
          program improvements should also reduce demand for future 
          funding.

          Enactment of this bill in contingent on the enactment of AB 358 
          (Smyth), which makes several changes to the processes for 
          reporting information on leaking underground storage tanks and 
          determining that the site of a formerly leaking underground 
          storage tank has been cleaned up and is ready for reuse. That 
          bill will be heard in this committee.