NatLUST Hires Investment Banking Firm to Put Together Financing.
Sacramento, California, November 19, 2009 – California's Governor Arnold Schwarzenegger signed AB 1188, a key piece of legislation for the state’s UST program. Among other things, the legislation raises the UST fee by 6/10 of 1 cent per gallon for the next two years. The measure is expected to generate an additional $100 million per year that will be available to reimburse claims.
California's PMAA affiliate, the California Independent Oil Marketers Association was a key supporter of the legislation. Jay McKeeman, head of CIOMA government affairs, said “AB 1188 (Ruskin) was a difficult, but absolutely necessary, legislative effort. In the end the legislature & Governor recognized that AB 1188 was a bipartisan, problem-solving measure. Attempting to pass a measure that increased fees in this time of budget-slashing mentality was an up-hill effort. But the flip-side of the devastation it would have brought to small environmental consulting firms, small petroleum marketers and property owners, and the halting of necessary remediation efforts far outweighed the fee-increase resistance. We owe a special debt of gratitude to Assemblyman Ruskin and his tenacious staff for not giving up in the face continuing roadblocks. AB 1188 is only a stop-gap measure. The real work of streamlining the UST Fund operations and achieving safe but efficient site closures lies in the months ahead - and CIOMA is committed to achieving meaningful UST program and cleanup standard reform in the near future.”
Approximately one year ago the Water Board, in response the the UST fund's then declining cash balance, suspended the eligibility of many C class sites, essentially putting the state's clean up program on a pay-as-you-go basis. Work at many of the suspended sites was halted, and environmental contractors across the state began winding down operations and laying off staff. In response to the legislation, California's Water Control Board last week reactivated some 1,300 suspended 'C' class sites, thereby allowing the site owners to once again access to the UST program.
California operates the nation’s largest UST program. Prior to the passage of the recent legislation, their UST program received over $200 million a year in revenues annually, leaving free cash flow sufficient to reimburse approximately $175 million a year of claims.
Separately , NatLUST has redoubled its efforts to raise financing to expand its program to California, and has retained the public finance firm Westhoff, Cone & Holmstedt and attorney Andrew Rose of Waste Finance. NatLUST estimates it may need to raise as much as $75 million for a California tax-exempt bond issue.
11/23/2009
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