Senate Bill 445 was recently passed in California to amend current laws regulating underground storage tanks that are used to store hazardous substances, petroleum, groundwater and surface water contamination. SB 445 Chapter 547 changes a number of requirements of the Underground Storage Tank Cleanup Fund (USTCF). Most significantly, the establishment of the Site Cleanup Subaccount (SCSA) expands the scope of contaminated properties that are eligible for funds to offset cost of investigation and remediation. This may help property owners get access to funds to clean up contaminated properties, and ease the financial burden on business owners to comply with regulations by offering a reimbursement (funded by an increase in the storage fee that UST owners are required to pay for each gallon of petroleum)

Specifics of SB 445, Chapter 547

SB 445 – Chapter 547, establishes a Subaccount Pilot Test Program in fiscal year 2015-16 with funding of $100,000,000; with no more than $1,000,000 available per site. The site priority for entrance into the program is primarily based on financially disadvantaged sites, specifically where “the responsible parties lack sufficient financial resources to pay for the required response actions.” A limited number of sites will be allowed into the pilot test program. The effectiveness and efficiency of the pilot test program will be evaluated through January 1, 2018. Up to 25% of the funds placed in the UST Fund program can be transferred into the Subaccount Pilot Test Program. The requirements for entry into the program include:

A. The degree to which human health, safety and the environment are threatened by contamination at the location;
B. Whether the location is located in a small or financially disadvantaged community;
C. The cost and potential environmental benefit of the investigation or cleanup;
D. Whether there are other potential sources of funding for the investigation or cleanup; and
E. Any other information the board identifies a necessary for consideration.

What Does This Mean For My Drycleaner Site?
Although the Site Cleanup Subaccount may cover the assessment and remediation of contaminated properties regardless of the source of contamination, this does not necessarily mean the fund extends to the cleanup of drycleaner operations.

Basically, the terms as noted in the bill do not specify that dry cleaners are the subject of the intention of the subaccount but they are not excluded. However, many smaller operations are unlikely to meet the minimum requirements discussed above. I interpret the language of the bill to mean that if a dry cleaner has an immediate and eminent threat to human health, it's possible to divert USTCF monies to such circumstances. However, this may be a lengthy and tedious process and would not likely be available for a dry cleaner with minimal impacts.

Regardless, in order to qualify the drycleaner would have to undergo some amount of site characterization such the general extent of the PCE in soil, soil gas and groundwater had been defined in order to assess whether a dry cleaner meets the requirements noted above.

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Kathryn Peacock

Kathryn Peacock serves as Principal and National Client Manager for Partner Engineering and Science, Inc. With 20 years of experience under her belt, Kathryn has worked on thousands of transactions, subsurface investigations, and site remediation projects for some of the nation’s largest lenders and investors. She holds a bachelor’s degree in Soil Science from Prescott College and a Master’s in Education from the Arizona Teachers Institute. Kathryn speaks and writes frequently on a wide range of environmental due diligence topics, and is dedicated to advancing standards and best practices through her active involvement with industry associations such as ASTM. Kathryn is also a founding member of EFMR (Environmental Facilities Management Roundtable). Environmental Professionals are frequently unique within their companies, having few peers who understand the unique challenges of their day-to-day.  

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