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Arthur G. Baggett, Jr. • • December 23, 2002 Page 6 of 7 C. The Purpose of the Fund is Not Being Met The Barry Keene Underground Storage Tank Cleanup Fund Act of 1989 created the Underground Storage Tank Cleanup Fund Program to help owners and operators of underground storage tanks satisfy federal and state financial responsibility requirements, and to assist with the cost of cleanup of contaminated soil and groundwater caused by leaking petroleum USTs. The intent of the Legislature in developing the Fund was to protect only innocent landowners in cleaning up contamination. To do this, the Fund specifically prohibits owners/operators from being compensated when the owner/operator has been or could be compensated by another person. (CA Health & Safety Code § 25299.54(8)) This prohibition is designed to avoid a windfall that could result when an owner purchases property known to be contaminated for a lower cost, and then subsequently gets reimbursed for the cleanup, ultimately allowing the purchaser to buy a "good" piece of property for little or no cost. In this case, the Trust purchased this property for a significant amount of money. In fact, the Trust paid the approximate value of the property (if not more) prior to knowing about the contamination. Therefore, the Fund need not worry about the Claimant getting a windfall. The Trust is a very small entity whose only asset is the contaminated property— it is the very type of entity that the Fund was set up to assist. Without assistance from the Fund, the Trust will never be able to afford the corrective action being sought by the San Joaquin County Environmental Health Department and the property will never be useful and viable. To hold that this Claimant is ineligible for the Fund would contradict the board's previous decision in Quaker State and create an incredibly inequitable result that flies in the face of the very legislative purpose of the Fund. CLAIMANT'S DAMAGE It is very important to understand the difficult position that the Trust is in. The Trust neither caused the contamination nor contributed to the contamination and most importantly, did not benefit economically from the use of the Property as a gasoline station. Instead, the Trust tried to facilitate environmental improvement by lending Ms. Marler money to remove UST's. Ms. Marler started this process, but did not finish it—fleeing in bad faith from the potential additional costs of the discovered soil and water contamination from the removed tanks. The Trust now owns the property as a result of foreclosure and wants to comply with the law and clean-up the contamination. However, it simply cannot do so without assistance from the Fund. The Trust has no assets other than the contaminated property. The property has either no or a negative value while still contaminated and cannot be sold. Without assistance from the Fund, the property will likely remain in its current contaminated state and will not be put to beneficial use. The claimant will continue to incur legal fees to ward off the San Joaquin Environmental Health Department and still be unable to fund any of the remedial actions that they are requesting. \\nt_oas\prolaw\documents\1818-001\dLS\27036.doc