BILL ANALYSIS �
SB 574
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Jerry Hill, Chair
2013-2014 Regular Session
BILL NO: SB 574
AUTHOR: Nielsen
AMENDED: As Introduced
FISCAL: Yes HEARING DATE: April 3, 2013
URGENCY: No CONSULTANT: Rachel Machi
Wagoner
SUBJECT : UNDERGROUND STORAGE TANKS: CORRECTIVE ACTION
SUMMARY :
Existing law , under the Barry Keene Underground Storage Tank
Cleanup Trust Fund Act of 1989, every owner of an underground
storage tank is required to pay a storage fee for each gallon
of petroleum placed in the tank. The fees are required to be
deposited in the Underground Storage Tank Cleanup Fund
(USTCF). The money in the fund may be expended by the State
Water Resources Control Board (SWRCB), upon appropriation by
the Legislature, for various purposes, including the payment
of claims of up to $1,500,000 per occurrence, as defined, to
aid owners and operators of petroleum underground storage
tanks (USTs) who take corrective action to clean up
unauthorized releases from those tanks and the payment of
claims for certain third party injuries and damages. SWRCB is
required to pay a claim for the costs of corrective action to
a person who owns property on which is located a release from
a petroleum UST that has been the subject of a corrective
action, and for which additional corrective action is required
because of additionally discovered contamination from the
previous release, if the person who carried out the earlier
and completed corrective action was eligible for, and applied
for, reimbursement pursuant to specified provisions, only to
the extent that the amount of reimbursement for the earlier
corrective action did not exceed the amount of $1,500,000.
This bill :
1) Imposes additionally, as a requirement for that
reimbursement, that the subject tank has been removed.
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2) Requires SWRCB to pay a claim for the costs of
corrective action to a person who owns property on which
is located a release from a petroleum UST that has been
removed, the site has been the subject of a corrective
action, and for which additional corrective action is
required because of additionally discovered contamination
from the previous release if the person owns the property
and is required to perform corrective action pursuant to
those provisions because of additionally discovered
contamination, if the person who carried out the earlier
and completed corrective action did not apply for
reimbursement, as prescribed.
COMMENTS :
1) Purpose of Bill . According to the author, this
measure seeks to fix a narrow gap in code that has,
anecdotally, prevented a pair of property owners from
obtaining reimbursement for cleanup mandated as a result
of additional UST leak contamination. This contamination
was discovered after they had taken ownership with an
understanding that the site had been adequately scrubbed.
The location is up-to-date on payments to the USTCF.
2) Background . The Barry Keene Underground Storage Tank
Cleanup Fund Act of 1989 established USTCF. The mission
of USTCF is to contribute to the protection of
California's water quality, public health, and safety,
through: Establishing an alternative mechanism to meet
federal financial responsibility requirements for owners
and operators of USTs; reimbursing eligible corrective
action costs incurred for the cleanup of pollution
resulting from the unauthorized release of petroleum from
USTs.
The USTCF benefits a large number of small businesses and
individuals by providing reimbursement for expenses
associated with the cleanup of leaking petroleum USTs.
USTCF also provides money to the nine regional water
quality control boards (regional water boards) and local
regulatory agencies to abate emergency situations or to
undertake corrective action at abandoned sites that pose
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a threat to human health, safety, and the environment, as
a result of a UST petroleum release.
The regional water boards, County Local Oversight Program
agencies (LOP Agencies), and other local agencies direct
corrective action to clean up soil and groundwater
contamination at petroleum UST sites that have had
unauthorized releases. USTCF also supports other special
accounts authorized by the Legislature.
USTCF's revenues are generated by a storage fee for every
gallon of petroleum product placed into a UST. The
current fee is 2.0 cents per gallon. The State Board of
Equalization (BOE) collects the fee quarterly from owners
of active USTs. The fee is scheduled to drop to 1.4 cents
per gallon on January 1, 2014. Fund statutes set forth a
claim priority system based on specified claimant
characteristics relating to the claimant's ability to
pay. There are four priorities:
Class A: is reserved for residential
tank owners.
Class B: is reserved for small
California businesses, governmental agencies, and
nonprofit organizations with gross receipts and
employees below a specified maximum.
Class C: is for certain California
businesses, governmental agencies, and nonprofit
organizations not meeting the criteria for Class
B, but who have less than 500 employees.
Class D: is given to all other
eligible claimants.
The law establishing USTCF is scheduled to sunset on
January 1, 2016.
According to SWRCB's 2011 report, over the life of 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
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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.
SWRCB indicated that the projected revenues from the
extension of the supplemental tax is about $180 million
over two years.
In recent years, program expenditures have exceeded
revenues, in part due to poor program oversight by
SWRCB and in part due to unforeseen cost increases to
clean up contaminated sites. Based on the results of a
recent program audit, SWRCB has made several changes to
the program, to better manage available funding and to
speed up the process for completing cleanup projects.
Additionally, the statute changes made over the last
several years and the increased revenues from AB 291
(Wieckowski), Chapter 579, Statutes of 2011 offset a
large portion of the program deficiency. SWRCB
believes that recent program improvements should also
reduce demand for future funding. However, there
remains an ongoing backlog of thousands of claims that
there is not sufficient funding to pay.
1) Amendments needed .
a. Due to the fact that there are already
thousands of claims in the queue to be paid from
USTCF, and that the $0.006 increase is due to expire
at the end of this year, does it make sense to put
additional pressure on the fund to pay additional
claimants? This bill should be amended to be
contingent on AB 282 (Wieckowski), which provides a
two-year extension of the additional $0.006 per
gallon on the specified petroleum storage fee until
January 1, 2016, in order to ensure that these
additional claimants do not put added pressure on
USTCF.
b. Per Senate Engrossing and Enrolling, the
bill needs to be amended to address several drafting
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errors.
c. The author would also like to add coauthors.
2) Related Legislation .
AB 282 (Wieckowski) requires a two-year extension of the
additional $0.006 per gallon on the specified petroleum
storage fee until January 1, 2016. This bill is
currently awaiting hearing in the Assembly Policy
Committee.
AB 1566 (Wieckowski), Chapter 532, Statutes of 2012,
authorizes the Office of the State Fire Marshal to
regulate the Aboveground Petroleum Storage Act and makes
conforming changes to the APSA. This bill is
double-jointed with AB 1701 (Wieckowski).
AB 1701 (Wieckowski), Chapter 536, Statutes of 2012,
provided for state certification of cities and counties
to oversee the cleanup of underground storage tanks.
This bill is double-jointed with AB 1566 (Wieckowski).
AB 358 (Smyth), Chapter 571, Statutes of 2011, (1)
required the owner or operator of a UST to send specified
information to SWRCB regarding an unauthorized release of
hazardous substances in USTs to local agencies on a
written or electronic form developed by the board, (2)
required each regional board and local agency to submit a
report to SWRCB for all unauthorized releases using the
board's Internet-accessible database, (3) allowed SWRCB
to adopt regulations to specify reporting requirements to
implement the provisions of the bill, including
electronic submission requirements for these reports and
requires the regulations to be adopted as emergency
regulations and exempts the adoption of these regulations
from certain requirements regarding review by the Office
of Administrative Law, (4) allowed a person required to
perform corrective action under certain federal laws to
apply to the board for payment of a claim, and (5)
changes made by this bill were contingent on AB 291
(Wieckowski) being chaptered.
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AB 291 (Wieckowski), Chapter 579, Statutes of 2011,
required a two-year extension of the additional $0.006
per gallon on the specified petroleum storage fee until
January 1, 2014. Changes made by this bill were
contingent on AB 358 (Smyth) being chaptered.
AB 1188 (Ruskin), Chapter 649, Statutes of 2009,
increased the specified petroleum storage fee by $0.006
per gallon of petroleum stored, between January 1, 2010,
and December 31, 2011.
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.
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 SWRCB by
prioritizing large school districts, above otherwise
un-ranked tank owners and operators to receive financial
awards for claims submitted to SWRCB for UST remediation
costs.
SOURCE : California Independent Oil Marketers
Association
California Service State and Automotive Repair
Association
SUPPORT : None on file
OPPOSITION : None on file