ITEM 4: PROPOSED RESOLUTION AMENDING THE CIRCLE K CORPORATION SETTLEMENT FUND PRIORITY LIST - AMENDMENT NO. 3

DISCUSSION: Through bankruptcy proceedings, Circle K Corporation has abandoned numerous petroleum underground storage tank (UST) sites in California. The State Water Resources Control Board (SWRCB) has executed a settlement agreement with Circle K and affiliated debtors, which was effective July 26, 1993. Under the agreement, California was awarded approximately $3.9 million, to be provided in annual payments over a seven year period, to pay landlords and other persons for costs associated with tank removal and cleanup at designated sites.

Section 25299.50 of the Health and Safety Code authorizes the SWRCB to create accounts within the Underground Storage Tank Cleanup Fund (USTCF). The Circle K Settlement Trust Fund (Settlement Fund) which is comprised of the monies awarded to the SWRCB pursuant to the Circle K settlement agreement, was created pursuant to the SWRCB's authority expressed in Section 25299.50. The SWRCB has established procedures for administering the Settlement Fund in the SWRCB, Administrative Procedures Manual, Water Quality, Chapter 20.

The initial priority list was adopted May 18, 1994. This, the third amendment of the priority list (Priority List not available electronically but can be obtain by calling Jennifer White at (916) 227-0744), adds 59 claims. All claims are listed in order of date received.

A claim must appear on the priority list to be funded. However, placement on the list does not guarantee funding. A final decision on the eligibility and amount payable for each claim will be made at the time the claim is removed from the list for processing. Claims will be paid in rank order.

It is estimated that approximately $463,000 is available for Circle K claim payments for Fiscal Year (FY) 1997/98. Existing funding and the expected July 1997 annual payment from Circle K will provide sufficient funding to pay all listed claims.

POLICY ISSUE: Should the SWRCB amend the Circle K Priority List to add 59 claims which have been determined to be eligible for placement on the list?

FISCAL ISSUE: The staff effort required to administer Circle K claims is funded by the Settlement Fund. Staffing levels approved for the Division for Fiscal Year 1997-98 are sufficient to review and process claims for which funds are available.

RWQCB: Yes - All regions

STAFF RECOMMENDATION: That the State Water Resources Control Board adopt a resolution amending the Circle K Priority List to add 59 claims, and to authorize the Division of Clean Water Programs to process and pay claims in approximate priority order.

June 23, 1997 DRAFT

WHEREAS:

1. Through bankruptcy proceedings, Circle K Corporation has abandoned numerous petroleum underground storage tank (UST) sites in California and many of the USTs have leaked petroleum into the soil and groundwater;

2. Under a settlement agreement executed between the State Water Resources Control Board (SWRCB) and Circle K Corporation (effective July 26, 1993), California was awarded approximately $3.9 million, to be provided in seven annual payments, to pay landlords and other persons for costs associated with tank removal and cleanup at designated sites;

3. Section 25299.50 of Article 6 of Chapter 6.75, Division 20, California Health and Safety Code authorizes the SWRCB to create accounts within the Underground Storage Tank Cleanup Fund (USTCF);

4. The SWRCB has established procedures (Water Quality APM Chapter 20) for administering the Circle K Settlement Fund, which was created by virtue of the SWRCB's authority expressed in Section 25299.50;

5. The SWRCB adopted its initial priority list on May 18, 1994;

6. The amended priority list includes 59 claims submitted after July 23, 1996 (the date Amendment No. 2 was adopted) but prior to June 1, 1997. Claims will be paid in rank order.

7. It is estimated that approximately $463,000 is available for claim payments for Fiscal Year (FY) 1997-98. This is sufficient funding to pay all claims listed on the amended claims list.

THEREFORE BE IT RESOLVED THAT:

The State Water Resources Control Board hereby amends the Circle K priority list to add 59 claims, and authorizes the Division of Clean Water Programs to process and pay claims in priority order.

The undersigned, Administrative Assistant to the Board, does hereby certify that the foregoing is a full, true, and correct copy of a resolution duly and regularly adopted at a meeting of the State Water Resources Control Board held on July 17, 1997.

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Maureen Marchè

Administrative Assistant to the Board