BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                               AB 2005
                                                                       

                      SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                        Senator S. Joseph Simitian, Chairman
                              2011-2012 Regular Session
                                           
           BILL NO:    AB 2005
           AUTHOR:     Garrick
           AMENDED:    May 1, 2012
           FISCAL:     Yes               HEARING DATE:     July 2, 2012
           URGENCY:    Yes               CONSULTANT:       Randy Pestor
            
           SUBJECT  :    OIL SPILL PREVENTION AND RESPONSE

            SUMMARY  :    
           
            Existing law  , under the Lempert-Keene-Seastrand Oil Spill 
           Prevention and Response (OSPR) Act:

           1) Requires the Governor to establish a state oil spill 
              contingency plan (Government Code §8574.1 et seq.), 
              establishes oil spill response and contingency planning 
              requirements (§8670.1 et seq.), and establishes oil spill 
              prevention, response, containment, and cleanup programs 
              (Public Resources Code §8750 et seq.).

           2) Requires the OSPR administrator to adopt and implement 
              regulations governing the adequacy of oil spill contingency 
              plans to be prepared and implemented, taking into 
              consideration marine facility or vessel contingency plan 
              requirements of the national and California contingency 
              plans, the State Lands Commission, State Fire Marshal, and 
              California Coastal Commission.  The regulations must, among 
              other things:  a) ensure that standards set for response, 
              containment, and cleanup equipment are maintained and 
              regularly improved to protect state resources; and b) 
              ensure that each oil spill contingency plan demonstrates 
              that all protection measures are being taken to reduce the 
              possibility of an oil spill occurring as a result of the 
              operation of the marine facility or vessel.  (Government 
              Code §8670.28).

           3) Creates the Oil Spill Prevention and Administration Fund to 
              be used for the above purposes, requires the OSPR 
              administrator to administer the fund, and requires the 









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              State Board of Equalization to collect a fee in an amount 
              determined by the administrator to be sufficient to carry 
              out certain purposes.  The amount of the fee cannot exceed 
              $0.065 per barrel of crude oil or petroleum products, and 
              $0.05 per barrel beginning January 1, 2015.  The fee is 
              collected by marine terminal operators from the owner of 
              crude oil or petroleum products based on each barrel of 
              those products received by means of a vessel operating in, 
              through, or across marine waters of the state.  (§§8670.38, 
              8670.39, and 8670.40).

           4) Requires the OSPR administrator to charge a nontank vessel 
              owner or operator a reasonable fee, to be collected with 
              each application to obtain a certificate of financial 
              responsibility, in an amount that is based on the 
              administrator's costs in implementing the above 
              requirements relating to nontank vessels.  Before January 
              1, 2005, the fee must be $2,500 or less per vessel.  
              (§8670.41).

           5) Prohibits a nontank vessel that is required to have an oil 
              spill contingency plan from entering marine waters of the 
              state unless the vessel owner or operator has provided 
              evidence of financial responsibility to the administrator 
              that demonstrates the ability to pay at least $300 million 
              to cover damages caused by a spill, and the vessel owner or 
              operator has obtained a certificate of financial 
              responsibility from the administrator.  The administrator 
              may establish a lower financial responsibility standard for 
              a nontank vessel that has a carrying capacity of 6,500 
              barrels of oil or less.  (§8670.37.58).  Evidence of 
              financial responsibility must be received by the OSPR 
              administrator at least 10 calendar days prior to operating 
              or entering marine waters.  (14 Cal. Code of Regs. 
              §791.6(b)).  The oil spill contingency plan must be 
              submitted to the OSPR administrator at least 5 working days 
              prior to entering marine waters.  (14 Cal. Code of Regs. 
              §826.01(b)(1)(A)).

            This bill  , under the oil spill response and contingency 
           planning requirements (§8670.1 et seq.) of the OSPR Act:











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           1) Requires a nontank vessel that is not used for commercial 
              purposes and that weighs between 300 and 400 gross tons to 
              submit the following to the OSPR administrator at least 96 
              hours prior to arrival in the waters of the state, 
              notwithstanding other oil spill response and contingency 
              planning requirements:

              a)    Evidence of financial responsibility.

              b)    Payment of the nontank vessel fee.

              c)    Vessel particulars, such as the size and dimensions 
                 of the vessel.

           2) Requires the operator of a nontank vessel that is not used 
              for commercial purposes to submit other documents required 
              under the oil spill response and contingency planning 
              requirements (including the oil spill contingency plan) 
              within 14 days after arrival of the vessel.

           3) Sunsets January 1, 2015.

            COMMENTS  :

            1) Purpose of Bill  .  According to the author, "AB 2005 will 
              streamline the requirements for non-commercial boats to 
              enter California waters while still maintaining the 
              safeguards in place with current law.  Specifically, AB 
              2005 will require boats to provide Fish and Game officials 
              an application for a certificate of financial 
              responsibility prior to entering California waters and 
              subsequently provide an oil spill contingency plan no later 
              than 14 days after they have arrived."

           The author also notes that "As you know, San Francisco is set 
              to host the America's Cup race in 2012 and the event is 
              expected to provide a huge economic boost to the Bay Area 
              and California as a whole.  In order to ease the process in 
              which visiting boats can enter California prior to the race 
              it is imperative that this legislation be in place prior to 
              the events later this year."











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           The author asserts that under state law, a nontank vessel over 
              300 gross tons must "submit an Oil Spill Contingency plan 
              and certificate of Financial Responsibility (COFR) (7 and 
              21 days respectively) prior to entering California waters" 
              and the "U.S. Coast Guard implemented similar requirements 
              for nontank vessels at 400 gross tons or above."  The 
              author further believes that "This conflicting information 
              coupled with lack of notification and a rigid time-frame 
              has made it increasingly difficult for out of country 
              yachts to comply with these requirements before entering 
              California waters.  This has led to the industry's 
              avoidance of visiting California and a significant loss of 
              revenue to coastal cities and towns."

           According to the author, "We have had numerous meetings with 
              industry representatives and OSPR to try to resolve the 
              issue.  Several opportunities to improve the process have 
              been identified by OSPR and are in the process, however it 
              was decided that the only real solution to rectify this 
              situation before the America's Cup event in San Francisco, 
              is through legislation."

           AB 2205 is sponsored by Todd Roberts, owner of Marine Group 
              Boat Works, which is a boat and superyacht repair facility 
              located in Chula Vista (southern part of San Diego Bay) 
              with a second location in San Jose del Cabo.  The company 
              specializes in refits, repairs, and new construction of 
              boats up to 220 feet long.  
            
            2) Background  .  The Lempert-Keene-Seastrand Oil Spill 
              Prevention and Response Act requires the Governor to 
              establish a state oil spill contingency plan (Government 
              Code §8574.1 et seq.), establishes oil spill response and 
              contingency planning requirements (Government Code §8670.1 
              et seq.), and establishes oil spill prevention, response, 
              containment, and cleanup programs (Public Resources Code 
              §8750 et seq.).  SB 1644 (Thompson) Chapter 964, Statutes 
              of 1998, added a provision to the oil spill response and 
              contingency planning requirements for "nontank" vessels.

            3) Differences in state and federal nontank vessel reporting 
              requirements  .  A "nontank vessel" under state law is a 










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              vessel of 300 gross tons or greater that carries oil, but 
              does not carry that oil as cargo.  (Government Code 
              §8670.3(p)).  Under federal law, for purposes of vessel 
              response plans a "nontank vessel" weighs at least 400 gross 
              tons (33 U.S.C. §1321(a)(26)), and for financial 
              responsibility purposes a "nontank vessel" weighs over 300 
              gross tons (33 U.S.C. §2716).

           Under state law, evidence of financial responsibility must be 
              received at least 10 calendar days prior to operating or 
              entering marine waters.  (14 Cal. Code of Regs. §791.6(b)). 
               The oil spill contingency plan must be submitted to OSPR 
              at least 5 working days prior to entering marine waters.  
              (14 Cal. Code of Regs. §826.01(b)(1)(A)).    

           For nontank vessels between 300 and 400 gross tons, AB 2005 
              allows evidence of financial responsibility to be received 
              at least 96 hours prior to arrival in the marine waters of 
              the state, and the oil spill contingency plan and other 
              required documents to be submitted to OSPR within 14 days 
              after arrival of the vessel.

           Under federal law, evidence of financial responsibility must 
              be submitted at least 21 days prior to entering U.S. 
              navigable waters (33 CFR §138.50) and a response plan must 
              be submitted at least 60 days before operating upon U.S. 
              navigable waters (33 CFR §155.5065).

            4) Is AB 2005 necessary and does this bill set a precedent for 
              other vessels  ?  The owner or operator of a yacht weighing 
              between 300 and 400 gross tons visiting America's Cup 
              events, let alone operating in any other marine waters of 
              the state, has the background and financial resources 
              needed to comply with local, state, federal, and 
              international laws - and plan well ahead for such an 
              occasion.

           As noted above, financial responsibility requirements apply to 
              300 gross ton vessels under both state and federal laws.  
              And although federal contingency plan requirements apply to 
              vessels weighing over 400 gross tons, state regulations 
              allow appropriate sections of plans approved by any state, 










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              federal, or international authority to be either submitted 
              or cited, as approved by the OSPR administrator, to meet 
              certain California requirements.  (14 Cal. Code of Regs. 
              826.01(a)(2)(A)).

           Should owners and operators of 300 to 400 gross ton yachts 
              delay complying with the state's oil spill prevention and 
              response requirements?

            5) The America's Cup  .  The author believes that AB 2005 is 
              needed for large yachts visiting America's Cup events.  
              However, this bill applies to any nontank vessel weighing 
              300 to 400 tons in marine waters until January 1, 2015.  

           San Francisco America's Cup events are scheduled for August 
              21-26, 2012; October 4-7, 2012; July 4 to September 1, 
              2013; and September 7-22, 2013.

           If the Committee believes these yacht owners and operators are 
              deserving of an exception, should this carve out apply only 
              during the duration of the America's Cup with some limited 
              additional time before and after the events?

           What is the basis for receiving a contingency plan and other 
              documents after arrival of a vessel, let alone 14 days 
              after arrival of the vessel when the vessel is likely to 
              have already left the area?

            6) What "particulars" will be provided  ?  AB 2005 requires the 
              "vessel's particulars, such as the size and dimensions of 
              the vessel" to be provided at least 96 hours prior to 
              arrival.

           Since it is not known what other information may be needed 
              under these circumstances, if the Committee believes this 
              bill is needed, then the vessel owner or operator should 
              also provide any other information required by OSPR, and 
              the owner should be prohibited from using AB 2005 
              procedures if a contingency plan has been denied, revoked, 
              or suspended.

            7) Clean Coast Act requirements  .  The California Clean Coast 










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              Act, enacted by SB 771 (Simitian) Chapter 588, Statutes of 
              2005, contains various requirements relating to the release 
              of graywater, hazardous waste, oily bilgewater, and sewage 
              and sewage sludge from a large passenger vessel or 
              oceangoing ship.  A private vessel of 300 gross tons or 
              more falls under the Act's definition of "oceangoing ship." 
               Releases of sewage and graywater are prohibited in the 
              marine waters of the state (and a marine sanctuary under SB 
              1360 (Simitian) of 2012) from an oceangoing vessel with 
              sufficient holding tank capacity.

           If the Committee believes this bill is necessary, then a 
              vessel benefitting from the requirements of AB 2005 should 
              also provide the following to the administrator and the 
              State Water Resources Control Board:  a) the sewage and 
              graywater holding capacity of the vessel, and b) 
              information ensuring that the holding capacity of the 
              vessel is sufficient for the time period that the vessel is 
              within marine waters of the state or a marine sanctuary.

            8) Technical amendments also needed  .  If the committee 
              believes AB 2005 is necessary, the following clarifying 
              amendments are also needed:  a) on page 2, line 4, after 
              the comma insert:  "an owner or operator of"; b) on page 2, 
              line 6, after "the" insert:  "marine"; c) on page 2, line 
              16, after "The" insert:  "owner or"; and on page 2, line 
              18, after "vessel" insert:  "in the marine waters of the 
              state".  AB 2005 should also sunset January 1, 2014, rather 
              than January 1, 2015.

            9) Related legislation  .  AB 1112 (Huffman) Chapter 583, 
              Statutes of 2011, among other things, increased the Oil 
              Spill Prevention and Administration Fund fee from $0.05 to 
              $0.065 per barrel of crude oil or petroleum products, and 
              reverts to $0.05 per barrel beginning January 1, 2015. 

           AB 1601 (Huffman) of 2012 adds a $3,250 nontank vessel fee cap 
              that may be annually increased based on the California 
              Consumer Price Index.  AB 1601was heard by the Senate 
              Natural Resources Committee June 26, 2012 (9-0), and will 
              be heard by the Senate Environmental Quality Committee July 
              2, 2012, if approved by the Natural Resources Committee.










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           SB 1192 (Evans) of 2012 increases the Oil Spill Prevention and 
              Administration Fund fee from $0.065 to $0.068 per barrel of 
              crude oil or petroleum products, and $0.053 per barrel 
              beginning January 1, 2015; requires a $3,500 minimum 
              nontank vessel fee; and requires the OSPR administrator to 
              submit a proposed Budget appropriation of no more than $2 
              million for Oiled Wildlife Care Network purposes.  SB 1192 
              will be heard by the Assembly Natural Resources Committee 
              July 2, 2012.

            SOURCE  :        Todd Roberts, Owner, Marine Group Boat Works  

           SUPPORT  :       California Association of Harbor Masters and 
                          Port Captains, California Marine Parks and 
                          Harbors Association, California Yacht Brokers 
                          Association, Marine Recreation Association, 
                          Northern California Marina Association, Western 
                          Boaters Safety Group  

           OPPOSITION  :    None on file.