BILL ANALYSIS Ó
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1112|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 1112
Author: Huffman (D), et al.
Amended: 8/15/11 in Senate
Vote: 21
SENATE NATURAL RES. AND WATER COMMITTEE : 6-3, 6/28/11
AYES: Pavley, Evans, Kehoe, Padilla, Simitian, Wolk
NOES: La Malfa, Cannella, Fuller
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 5-1, 7/6/11
AYES: Simitian, Hancock, Kehoe, Lowenthal, Pavley
NOES: Strickland
NO VOTE RECORDED: Blakeslee
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/15/11
AYES: Kehoe, Alquist, Lieu, Pavley, Steinberg
NOES: Walters, Emmerson
NO VOTE RECORDED: Price, Runner
ASSEMBLY FLOOR : 42-26, 6/3/11 - See last page for vote
SUBJECT : Oil spill prevention and administration fee:
State Lands Commission
SOURCE : San Francisco BayKeeper
Pacific Environment
DIGEST : This bill authorizes the Office of Spill
Prevention and Response (OSPR) to raise the maximum fee on
imported oil from the current level of $0.0500 per barrel
CONTINUED
AB 1112
Page
2
to $0.0650 in 2012 and $0.0675 in 2014. This bill requires
OSPR to monitor certain ship fueling operations.
ANALYSIS :
Existing law:
1. Requires OSPR to direct prevention, removal, abatement,
response, containment, and cleanup efforts with regard
to all aspects of an oil spill in the marine waters of
the state.
2. Requires OSPR to adopt and implement regulations that
govern the adequacy of oil spill contingency plans and
provide for the best achievable protection of coastal
and marine resources. These regulations are required to
include, among other things, rules regarding the
transfer of oil between vessels (i.e. bunkering and
lightering). OSPR is allowed to conduct vessel
inspections for the purposes of determining compliance
with oil spill prevention and response laws.
3. Requires the State Lands Commission (Commission) to
adopt rules, regulations, guidelines, and leasing
policies related to all existing and proposed marine
terminals in the state to minimize the possibilities of
a discharge of oil. These rules, regulations,
guidelines, and leasing policies must provide the best
achievable protection of public health and safety and
the environment.
4. Requires the Commission to inspect, on a regular basis,
all marine facilities along with associated equipment.
The Commission is also required to monitor marine
facility operations and the effect they have on public
health and safety and the environment.
5. Establishes the Oil Spill Prevention and Administration
Fund (OSPAF), which finances OSPR and the Commission's
oil spill prevention programs. OSPAF is supported by a
fee not to exceed $0.05 imposed on each barrel of crude
oil or petroleum products received at a marine terminal
and a $2,500 fee imposed on nontank vessels every two
years.
CONTINUED
AB 1112
Page
3
6. Requires offshore oil drilling facilities under the
Commission's jurisdiction to conform to various
pollution prevention regulations.
This bill:
1. Requires OSPR to develop a risk-based monitoring program
for fuel transfers to ships docked or at anchor in state
waters.
2. Requires OSPR to screen vessels for potential risks
during fueling operations and then to monitor high-risk
fueling operations.
3. Authorizes (but does not require) OSPR to raise the
maximum per-barrel fee to $0.0650 in 2012 and $0.0675 in
2014.
4. Authorizes OSPR to increase the maximum fee in the
future by the rate of inflation.
5. Prohibits the loan of monies in the OSPAF to any other
fund.
6. Requires OSPR and the Commission to contract with the
Department of Finance for audits of the program by 2013
and at least every four years thereafter.
7. Requires the Commission to prepare a report on safety
issues surrounding offshore oil drilling by March 1,
2012.
8. Requires the Commission to address several topics in the
report, including preventative measures, response plans,
and other issues.
Background
The Department of Fish and Game's OSPR was created in 1990
by the Lempert-Keene-Seastrand Oil Spill Prevention and
Response Act (Act) (commencing with Section 8670.1 of the
Government Code ÝGOV]). The Act establishes the position
of the Administrator to direct activities relating to oil
CONTINUED
AB 1112
Page
4
spill prevention and response including drills and
preparedness and oil spill containment and clean up (GOV
Section 8670.5).
GOV Section 8670.38 creates the OSPAF which funds the
OSPR's prevention and response activities as well as oil
spill prevention programs at the State Lands Commission,
Coastal Commission, and the San Francisco Bay Conservation
and Development Commission. It also funds the Oiled
Wildlife Care Network's training and field collection, and
search and rescue activities. OSPAF is financed through
(1) a $0.05 maximum assessment on each barrel of crude oil
or petroleum products brought into the state (GOV Section
8670.40), and (2) a $2500 maximum fee imposed on nontank
vessels biennially (GOV Section 8670.41).
The Administrator is required, among other things, to
conduct regular inspections of the vessels engaged in
bunkering (an operation where one vessel loads another
vessel with fuel and lubricants) and lightering (transfer
of the oil as cargo from one vessel to another) to evaluate
their compliance with existing OSPR laws.
Section 8670.42 of GOV requires DFG to contract with the
Department of Finance to prepare and submit a report on the
financial basis and programmatic effectiveness of OSPR in
oil spill prevention and response to the Governor and the
Legislature, on or before January 1, 2005.
The Commission is responsible for oil and gas and mineral
leases (commencing with Section 6801 of the Public
Resources Code). This includes jurisdiction over the
offshore oil drilling facilities. The Division of Oil,
Gas, and Geothermal Resources within Department of
Conservation also has extensive and broad authority to
regulate activities associated with the production and
removal oil and gas (Public Resources Code Section 3106).
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
CONTINUED
AB 1112
Page
5
Major Provisions 2011-12 2012-13 2013-14 Fund
Monitoring fuel transfers $3,000
$2,000Special *
Auditing Up to $100 every four yearsSpecial *
Potential additional fee ($3,700) ($7,400)
($7,400) Special *
revenues
* Oil Spill Prevention and Administration Fund.
SUPPORT : (Verified 8/15/11)
San Francisco BayKeeper (co-source)
Pacific Environment (co-source)
Blue Frontier Campaign
California Association of Professional Scientists
California Coast Keeper Alliance
California Coastal Commission
California State Lands Commission
California Statewide Law Enforcement Association
Center for Biological Diversity
Center for Oceanic Awareness, Research, and Education
City of Monterey
Clean Water Action
Crab Boat Owners Association
Defenders of Wildlife
East Bay Bird Advocates
Environment California
Environmental Action Committee
Environmental Defense Center
Friends of the Earth
Greenpeace
Natural Resources Defense Council
Ocean Champions
Ocean Conservation Research
Ocean Conservancy
Ocean Defenders Alliance
Ocean Revolution
Oceana
Pacific Coast Federation of Fisherman's Associations
CONTINUED
AB 1112
Page
6
Professional Engineers in California Government
Save Our Shores
Save The Bay
Sierra Club California
Surfrider Foundation, Marin County Chapter
Turtle Island Restoration Network
United Anglers
Waterways Restoration Institute
OPPOSITION : (Verified 8/15/11)
British Petroleum
California Independent Petroleum Association
California Manufacturing and Technology Association
California Chamber of Commerce
California Taxpayers Association
Western States Petroleum Association
ARGUMENTS IN SUPPORT : According to the author's office,
this bill will ensure adequate funding for the OSPAF and
increase oversight of vessels conducting oil transfers and.
Regarding the fee portion of the bill the author states, "A
June 3, 2011 fund condition statement of the OSPAF from the
Department of Fish & Game shows the fund being deficient $9
million in 2011-12 and $17 million in 2012-13. This
statement is based on an assumption that FY 11-12 and
beyond funding is at previous levels (i.e., no furloughs
and no other program reductions). Without an increase in
the fees or a new funding source, the projected deficits in
OSPAF will force both SLC and OSPR to cut positions
essential to their respective programs. For fiscal year
2011-12, the estimated deficit is approximately 17% of the
cost to operate the programs funded by OSPAF. As such, the
author is concerned that OSPR and SLC will likely have to
cut 17% of their payroll, which could mean the loss of oil
spill prevention specialists, environmental scientists,
enforcement agents, engineers, field inspectors, and
support staff. Since the deficit is estimated to continue
after 2011-12, additional cuts will be required. These
cuts will seriously jeopardize the protection SLC and
OSPR's programs provide to the public and the environment
from oil spills."
CONTINUED
AB 1112
Page
7
Regarding the oil transfer provisions of this bill the
author states, "AB 1112 will better ensure Californians
that oil transfer units have the equipment and trained
personnel on site and ready to respond in the event of a
spill during an oil-transfer operation by requiring OSPR to
develop and implement a screening mechanism and
comprehensive risk based monitoring program for the
inspection of bunkering and lightering operations at
anchorage and alongside that pose the highest risk of a
pollution incident."
ARGUMENTS IN OPPOSITION : The Western States Petroleum
Association states:
"According to the official reports from the Office of
Spill Prevention and Response, the Oil Spill Prevention
and Administration Fund (OSPAF) will finish the 2011-2012
fiscal year with a surplus of more than $1.7 million,
without a fee increase. Recent audits of OSPR have found
inappropriate use of the OSPAF for non-oil spill related
activities by its parent agency. The Oil Spill Technical
Advisory Committee (TAC) has recommended reforms to help
avoid inappropriate use of the Fund. The TAC's most
recent biennial report, issued last week, recommends some
important reforms that should be pursued before funding
is increased for the spill prevention program.
"Since the OSPAF will be intact through the coming fiscal
year, our view is that AB 1112 should be a two year bill,
and that immediate efforts should be focused on
implementing the recommendations of the TAC to ensure
that OSPR's resources (staff and funding) are protected
from inappropriate use in the future."
ASSEMBLY FLOOR : 42-26, 6/3/11
AYES: Allen, Ammiano, Atkins, Beall, Block, Blumenfield,
Bradford, Brownley, Buchanan, Butler, Campos, Cedillo,
Chesbro, Davis, Dickinson, Eng, Feuer, Fong, Fuentes,
Furutani, Galgiani, Gatto, Gordon, Hayashi, Hill, Huber,
Hueso, Huffman, Bonnie Lowenthal, Ma, Mendoza, Mitchell,
Monning, Pan, Portantino, Skinner, Solorio, Swanson,
Wieckowski, Williams, Yamada, John A. Pérez
CONTINUED
AB 1112
Page
8
NOES: Achadjian, Bill Berryhill, Conway, Cook, Donnelly,
Fletcher, Beth Gaines, Garrick, Grove, Hagman, Halderman,
Harkey, Jeffries, Jones, Knight, Logue, Mansoor, Miller,
Morrell, Nielsen, Norby, Olsen, Silva, Smyth, Valadao,
Wagner
NO VOTE RECORDED: Alejo, Bonilla, Charles Calderon,
Carter, Gorell, Hall, Roger Hernández, Lara, Nestande,
Perea, V. Manuel Pérez, Torres
CTW:kc 8/17/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED