BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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                                 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 
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          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 

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             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 

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             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 

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          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 

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          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

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