Legislative Update: Stuck in the Middle Again? UST Owners Hope AB 1715 Will Provide Regulatory Relief

Environmental Law  

November 26, 2012

Governor Brown recently signed into law AB 1715 (Smyth) which prohibits a regional water quality control board or local oversight agency from issuing a correction action directive, or from enforcing an existing corrective action directive, at underground storage tank (UST) cleanup sites that are being evaluated for closure by the State Water Resources Control Board (State Water Board) on the recommendation of the Underground Storage Tank Cleanup Fund Manager (Fund Manager).

Every contaminated UST cleanup that is financed through the State Water Board’s Underground Storage Tank Cleanup Fund (Fund) is eligible for annual Fund Manager closure review if that site has been open and received funding for five years.  In cases where the Fund Manager determines that closure is appropriate, a summary report must be submitted to the applicable regional water quality control board (regional board) and local agency summarizing the reason for this determination and providing the agencies an opportunity to comment on the summary report.  Following this process, the Fund can make a recommendation to the State Water Board for closure of that site.  The case is not officially closed, however, until the State Water Board issues a decision regarding the closure of the UST case.  Once a closure recommendation has been made, the Fund is required to limit reimbursement for subsequently incurred corrective action costs, including groundwater monitoring, to $10,000 in most situations.

Before AB 1715, the law did not prevent the applicable regional board or local oversight agency from issuing corrective action directives or enforcing existing corrective action directives while the closure recommendation was being evaluated.  As a result, the costs incurred by the responsible party to comply with regulatory directives could be determined by the Fund to not be reimbursable.  By way of background, the Fund will only reimburse “reasonable and necessary costs”.  It follows then that the costs to perform further work at the site may not meet this requirement if the Fund has made an independent determination that no further work is necessary at the site and that closure should be granted.  However, a responsible party who decides to not incur additional costs for fear that they won’t be reimbursed could be assessed penalties by the regional board or local agency for failure to comply with corrective action orders.   AB 1715 will now provide protection to UST owners and operators who were “stuck in the middle” of conflicting agency opinions regarding whether site conditions warranted site closure.  Once the Fund’s summary report is submitted to the applicable regional board and local agency, UST owners and operators will receive AB 1715’s protection and the agencies will be prohibited from mandating additional or enforcing existing corrective actions.

Originally published in the Real Property Law Section E-Bulletin (November 2012 Edition)