ITEM 4: PROPOSED RESOLUTION AMENDING THE CIRCLE K CORPORATION SETTLEMENT FUND PRIORITY LIST - AMENDMENT NO. 5

DISCUSSION: Through bankruptcy proceedings, the Circle K Corporation has abandoned numerous petroleum underground storage tank sites in California. The State Water Resources Control Board has executed a settlement agreement with the Circle K Corporation 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 State Water Resources Control Board to create accounts within the Underground Storage Tank Cleanup Fund. The Circle K Settlement Trust Fund which is comprised of the moneys awarded to the State Water Resources Control Board pursuant to the Circle K Settlement Agreement, was created pursuant to the authority listed above. The State Water Resources Control Board has established procedures for administering the Circle K Settlement Trust Fund.

The initial priority list was adopted May 18, 1994. This is the fifth amendment of the priority list (see attached) and adds 44 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 priority order.

It is estimated that approximately $784,700.00 is available for Circle K claim payments for Fiscal Year (FY) 1999/2000. Existing funding and the expected July 1999 annual payment from Circle K Settlement Trust Fund will provide sufficient funding to pay all listed claims.

POLICY ISSUE: Should the State Water Resources Control Board amend the Circle K Annual Priority List to add 44 claims which have been determined to be eligible for placement on the list?

RWQCB IMPACT: None

FISCAL ISSUE: The staff effort required to administer the Circle K claims is funded by the Circle K Settlement Trust Fund. Staffing levels approved for the Underground Storage Tank Cleanup Fund for Fiscal Year 1999-2000 are sufficient to review and process claims for which funds are available.

STAFF RECOMMENDATION: That the State Water Resources Control Board adopt a resolution amending the Circle K Annual Priority List to add 44 claims and authorize the Underground Storage Tank Cleanup Fund to process and pay claims in priority order.

[A copy of the 1999/2000 Circle K Priority List is not available electronically but can be obtained by calling Jennifer White at (916) 227-0744.]

1. Through bankruptcy proceedings, the Circle K Corporation 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 the 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;

4. The SWRCB has established procedures for administering the Circle K Settlement Trust Fund, which was created by virtue of the SWRCB's authority expressed in Section 25299.50;

5. The SWRCB adopted its initial Circle K Annual Priority List on May 18, 1994;

6. The amended Circle K Annual Priority List includes 44 claims submitted after July 17,1998 (the date Amendment No. 4 was adopted) but prior to June 1, 1999. Claims will be paid in priority order.

7. It is estimated that approximately $784,700.00 is available for claim payments for Fiscal Year (FY) 1999-2000. 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 Annual Priority List to add 44 claims, and authorizes the Underground Storage Tank Cleanup Fund to process and pay claims in priority order.

Maureen Marché
Administrative Assistant to the Board