BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 2005| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 2005 Author: Garrick (R) Amended: 8/6/12 in Senate Vote: 27 - Urgency SENATE NATURAL RESOURCES & WATER COMM. : 9-0, 6/12/12 AYES: Pavley, La Malfa, Cannella, Evans, Fuller, Kehoe, Padilla, Simitian, Wolk SENATE ENVIRONMENTAL QUALITY COMMITTEE : 7-0, 7/2/12 AYES: Simitian, Strickland, Blakeslee, Hancock, Kehoe, Lowenthal, Pavley SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 ASSEMBLY FLOOR : 70-0, 5/25/12 (Consent) - See last page for vote SUBJECT : Oil spills: nontank vessels: contingency plans and financial responsibility SOURCE : Marine Group Boat Works DIGEST : This bill requires, until January 1, 2014, the owner or operator of a nontank vessel within a specific range of gross tonnage that is not used for commercial purposes to submit , as specified, evidence of financial responsibility, payment of the applicable fee, graywater information, sewage information, and vessel particulars at CONTINUED AB 2005 Page 2 least 96 hours prior to the vessel's arrival in the marine waters of the state, and to submit other required documents within 14 days after the arrival of the vessel. This bill exempts from these requirements a vessel with insufficient graywater and sewage holding capacity to store graywater and sewage while the vessel is in marine waters of the state and any vessel for which a contingency plan has previously been denied or revoked. ANALYSIS : Existing law, under the Lempert-Keene-Seastrand Oil Spill Prevention and Response Act: 1. Requires the Governor to establish a state oil spill contingency plan (Government Code (GOV) Section 8574.1 et seq.), establishes oil spill response and contingency planning requirements (GOV Section 8670.1 et seq.), and establishes oil spill prevention, response, containment, and cleanup programs (Public Resources Code Section 8750 et seq.). 2. Requires the Office of Spill Prevention and Response (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. (GOV Section 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 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 CONTINUED AB 2005 Page 3 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. (GOV Sections 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. (GOV Section 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. (GOV Section 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 California Code of Regulations Section 791.6(b)). The oil spill contingency plan must be submitted to the OSPR administrator at least five working days prior to entering marine waters. (14 California Code of Regulations Section 826.01(b)(1)(A)) This bill, under the oil spill response and contingency planning requirements (GOV Section 8670.1 et seq.) of the Oil Spill Prevention and Response Act: 1. Requires an owner of, or operator of, a nontank vessel CONTINUED AB 2005 Page 4 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 marine waters of the state, notwithstanding other oil spill response and contingency planning requirements: Evidence of financial responsibility. Payment of the nontank vessel fee. Vessel particulars, such as the size and dimensions of the vessel, and any other information required by the administrator. 2. Requires the owner or 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 on January 1, 2014. Background In response to concern following significant oil spills, the Legislature passed the Lempert-Keene-Seastrand Oil Spill Prevention and Response Act (SB 2040, Chapter 1248, Statutes of 1990; GOV Section 8670.1 et seq., and others). The Act created the OSPR in the Department of Fish and Game (DFG) whose mission is to provide the best achievable protection of California's natural resources by preventing, preparing for, and responding to spills of oil and other deleterious materials; and to restore and enhance affected resources, including wildlife. Nontank vessel owners or operators whose vessel is greater than 300 gross tons in size must meet several regulatory requirements before operating in the state's marine waters. (A nontank vessel is a vessel that carries oil, but no oil cargo. For example, a sailboat may not be a nontank vessel, but a 40-meter motor yacht is.) Nontank vessel owners or operators must have a Marine Oil Spill Contingency Plan, a Certificate of Financial Responsibility (COFR), and pay the nontank vessel fee. The contingency CONTINUED AB 2005 Page 5 plan must be filed for review at least seven days before entry, and the COFR application must be submitted at least 10 days before entry. A COFR must be applied for bi-annually and requires that the owner or operator has the financial ability to pay at least $300 million for clean-up and other costs arising from an oil spill. Information on DFG's Web site indicates that the review time is often "7 days or less, depending upon the situation," but OSPR has 21 calendar days to review a COFR application and 180 days to review and approve or disapprove a submitted contingency plan. The America's Cup is the third largest sporting competition by some measures after the Olympics and soccer's World Cup. San Francisco is the host city for the 34th edition of the sailing competition. The final match is scheduled from September 7-22, 2013, and is preceded by the Louis Vuitton Cup (the racing series to determine the challenger) scheduled from July 4-September 1, 2013. Recent estimates indicate the Cup's economic impact will be on the order of $1 billion. DFG's Web page has a link guiding those vessel owners interested in attending the America's Cup to the requirements for entering California's marine waters. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 8/8/12) Marine Group Boat Works (source) 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 ARGUMENTS IN SUPPORT : According to the author, conflicting state law for applying to nontank vessels over 300 gross tons and U.S. Coast Guard regulations for similar vessels over 400 gross tons "coupled with lack of notification and a rigid time-frame has made it increasingly difficult for out of country yachts to comply with Ýoil spill-related] requirements before entering CONTINUED AB 2005 Page 6 California waters. This has led to the industry's avoidance of visiting California and a significant loss of revenue to coastal cities and towns." The author continues that "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." ASSEMBLY FLOOR : 70-0, 5/25/12 AYES: Achadjian, Alejo, Allen, Ammiano, Beall, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng, Feuer, Fong, Furutani, Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell, Hagman, Halderman, Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones, Lara, Logue, Bonnie Lowenthal, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, V. Manuel Pérez, Portantino, Skinner, Smyth, Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Atkins, Bill Berryhill, Fletcher, Fuentes, Grove, Hall, Knight, Ma, Perea, Silva CTW/RM:m 8/8/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED