San Gabriel Basin Demonstration Project Act of 1991

San Gabriel Basin Demonstration Project Act of 1991 - Authorizes any public agency, with the prior approval of the Administrator of the Environmental Protection Agency (EPA) and the Los Angeles Regional Water Quality Board (Regional Board), to carry out a plan to construct facilities to assist in the restoration of the San Gabriel Aquifer whether or not the demonstration project authorized by this Act is being implemented.

Amends the Federal Water Pollution Control Act to direct the EPA Administrator to enter into a cooperative agreement with the Regional Board to provide water treatment to remove volatile organic compounds and other contaminants from water in the San Gabriel Aquifer. Requires the agreement to provide for consultation with specified regional water districts and authorities. Directs the Regional Board, pursuant to the agreement, to: (1) withdraw, treat, and reinject water from the San Gabriel Valley Groundwater Basin (Basin); or (2) provide treatment for water withdrawn by qualified public water systems from the Basin. Provides for such treatment without reimbursement from the owners or operators of such systems.

Denies treatment pursuant to the agreement until the Administrator finds that: (1) State and local governments have made commitments to provide advance reimbursement for ten percent of total costs incurred by the Administrator in carrying out this Act; (2) the State has established a board to enforce rules governing the location of wells used to withdraw water from the Basin and governing the quantity of water to be withdrawn (prohibits more than 50 percent of a board's members from being representatives of persons entitled to withdraw water); and (3) 85 percent of potentially responsible parties (persons who may be liable under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (Superfund) for the cleanup of hazardous substances in the Basin and who represent 80 percent of the anticipated revenue from all identified parties) have entered into contracts providing for annual reimbursements to the Administrator for costs incurred in carrying out this Act. Designates persons entering into contracts as participating parties.

Requires participating parties entering into such contracts to: (1) conduct environmental audits of all of their property in the San Gabriel Valley; and (2) carry out removal and remedial actions with respect to hazardous substances in the soil of such property to comply with Superfund standards.

Directs the Administrator to establish a cost allocation formula for such parties. Bases the share of costs to be paid by a party on the following: (1) the Standard Industrial Code Number (SIC) of the party and the Administrator's estimate of the likelihood that industrial operations having that SIC Number contributed to contamination of the Basin; (2) the gross sales of the party in a baseline year established by the Administrator; (3) the ability of the party to pay; and (4) prior expenditures made by the party for groundwater remediation in the Basin. Requires the total contribution of such parties to equal 80 percent of the costs of carrying out the treatment project, except that the maximum obligation of a party shall not exceed 200 percent of such party's share of estimated total costs.

Requires water treatment to be adequate to insure compliance with standards applicable to drinking water under the Safe Drinking Water Act or any more stringent State law.

Authorizes appropriations to the Administrator to cover ten percent of the costs of carrying out this Act. Makes Federal and State costs under this Act recoverable under Superfund from potentially responsible parties not participating in contracts. Absolves participating parties of liability for the removal or response costs with respect to hazardous substances in the Basin or for damages to natural resources to the extent that releases occurred before the enactment of this Act and are identified in site assessments. Removes the exemption from liability if the party: (1) has failed to make any portion of the contribution required by the contract or to carry out required activities; or (2) has filed a suit against another person for contribution of costs. Prohibits participating parties from bringing actions against other persons for contributions of costs.

Absolves owners or operators of public water systems of liability in suits for recovery of response costs brought by potentially responsible parties who are not participating in the project under this Act.

Sets forth requirements for environmental audits.