BILL ANALYSIS �
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THIRD READING
Bill No: AB 291
Author: Wieckowski (D)
Amended: 7/7/11 in Senate
Vote: 27
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 5-0, 6/27/11
AYES: Simitian, Hancock, Kehoe, Lowenthal, Pavley
NO VOTE RECORDED: Strickland, Blakeslee
SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/15/11
AYES: Kehoe, Walters, Alquist, Lieu, Pavley, Price,
Steinberg
NO VOTE RECORDED: Emmerson, Runner
ASSEMBLY FLOOR : 62-7, 6/2/11 - See last page for vote
SUBJECT : Underground storage tanks
SOURCE : CORE Environmental Reform
DIGEST : This bill extends for two years a temporary fee
paid per gallon on motor vehicle fuel (petroleum storage
fee) that the owner of an underground storage tank must pay
from 1.4 mils to 2 mils per gallon through January 1, 2014,
and removes the January 1, 2016 sunset on the existing
underground petroleum storage tank fee and funding program.
This bill becomes operative only if AB 358 (Smyth),
2011-12 Session, is enacted and becomes effective on or
before January 1, 2012.
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ANALYSIS : Existing law under the Barry Keene Underground
Storage Tank Cleanup Act of 1989 (Act):
1. Authorizes the State Water Resources Control Board
(SWRCB) to provide grants and loans to gas station
owners to assist operator in meeting the underground
tank clean-up.
2. Established a fee of two mils per gallon of motor
vehicle fuel that the owner of an underground storage
tank (UST) must pay for each gallon of petroleum that is
stored in an underground tank.
The Act created the Underground Storage Tank Cleanup Fund
(USTCF) program. The USTCF program is administered by the
SWRCB and is designed to contribute to the protection of
California's public health, safety, and water quality
through: (1) establishing a mechanism for owners and
operators of USTs to meet federal financial responsibility
requirements; and, (2) reimbursing eligible UST owners and
operators for corrective action costs incurred in the
cleanup of soil and groundwater contamination resulting
from the unauthorized release of petroleum from USTs.
Currently, the USTCF program is supported by a two 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: (1) the Emergency, Abandoned, and Recalcitrant
Account; (2) the Commingled Plume Account; (3) the Orphan
Site Cleanup Fund; (4) the Replacing, Removing, or
Upgrading Underground Storage Tanks Program; and, (5) 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.
USTCF 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
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priority is given to all other claimants, including major
corporations and larger local governmental agencies.
Over the life of the USTCF, 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
the benefit the community. The rate of new claims is on a
declining trend, with only 208 being filed in fiscal year
2008-09.
Prior Legislation
AB 1188 (Ruskin), Chapter 649, Statutes of 2009, the bill
increases the specified petroleum storage fee by $0.006 per
gallon of petroleum stored, between January 1, 2010, and
December 31, 2011. By operation of existing law, the
revenue resulting from the increase is required to be
deposited in the USTCF and be available, upon
appropriation, for expenditure for the reimbursement of
tank owners for the coast of cleaning up leaking
underground storage tanks.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
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.
The SWRCB indicates that projected revenues from the
extension of the supplemental tax will be about $180
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million over two years.
In recent years, program expenditures have exceeded
revenues, in part due to poor program oversight by the
SWRCB and in part due to unforeseen cost increases to
clean up contaminated sites. Based on the results of a
recent program audit, the SWRCB 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 SWRCB 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.
SUPPORT : (Verified 8/17/11)
CORE Environmental Reform (source)
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.
FREY Environmental, Inc.
Golden State Gasoline, Inc.
J & H Drilling Co., Inc.
Rapid Gas, Inc.
United Oil
Voss Technologies, Inc.
OPPOSITION : (Verified 8/17/11)
Western States Petroleum
ARGUMENTS IN SUPPORT : According to the author's office,
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this bill 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
this bill provides an estimated $45 million for fiscal year
2011-12. (This bill still leaves 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 this bill 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.
ASSEMBLY FLOOR : 62-7, 6/2/11
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Eng, Feuer, Fong, Fuentes, Furutani, Galgiani, Garrick,
Gatto, Gordon, Hayashi, Roger Hern�ndez, Hill, Huber,
Hueso, Huffman, Jones, Lara, Logue, Bonnie Lowenthal, Ma,
Mendoza, Miller, Mitchell, Monning, Nestande, Norby,
Olsen, Pan, Perea, V. Manuel P�rez, Portantino, Silva,
Skinner, Smyth, Solorio, Swanson, Wieckowski, Williams,
Yamada, John A. P�rez
NOES: Donnelly, Grove, Knight, Morrell, Nielsen, Valadao,
Wagner
NO VOTE RECORDED: Achadjian, Fletcher, Beth Gaines,
Gorell, Hagman, Halderman, Hall, Harkey, Jeffries,
Mansoor, Torres
DLW:kc 8/17/11 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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