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 AB 2005 Page 2 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: AB 2005 Page 3 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." AB 2005 Page 4 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 AB 2005 Page 5 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, AB 2005 Page 6 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 AB 2005 Page 7 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. AB 2005 Page 8 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.