BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 2201
Author: Bradford (D)
Amended: 4/25/12 in Assembly
Vote: 21
SENATE GOVERNMENTAL ORGANIZATION COMM : 12-0, 6/26/12
AYES: Wright, Anderson, Berryhill, Calderon, Corbett, De
León, Evans, Hernandez, Padilla, Walters, Wyland, Yee
NO VOTE RECORDED: Cannella
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 57-17, 5/14/12 - See last page for vote
SUBJECT : Elder California Pipeline Safety Act of 1981
SOURCE : Author
DIGEST : This bill raises the civil penalties associated
with violations of the Elder California Pipeline Safety Act
of 1981. Specifically, it raises the civil penalties for
each day that a violation of the Act persists from $10,000
to $200,000, and raises the civil penalties for any related
series of violations of the Act from $500,000 to $2
million.
ANALYSIS : Existing law:
1.Provides the State Fire Marshal (SFM), under the Elder
California Pipeline Safety Act of 1981, with safety
CONTINUED
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regulatory jurisdiction over interstate pipelines used
for the transportation of hazardous or highly volatile
liquid substances, subject to federal law.
2.Establishes that a violation of the Act, as determined by
the SFM, is a civil penalty of not more than $10,000 for
each day that the violation persists.
3.Establishes that the maximum civil penalty for any
related series of violations is not permitted to exceed
$500,000.
4.Requires the SFM to deposit these civil penalties into
the Local Training Account in the California Hazardous
Liquid Pipeline Safety Fund. The money is available,
upon appropriation by the Legislature, to the State Fire
Marshal, who is required to use the money for providing
hazardous liquid fire suppression training to local fire
departments.
Background
While the federal government is primarily responsible for
developing, issuing and enforcing pipeline safety
regulations, under the U.S. Department of Transportation's
Pipeline and Hazardous Materials Safety Administration
(PHMSA), the pipeline safety statutes provide for state
intrastate regulatory, inspection, and enforcement
responsibilities under an annual certification. To qualify
for certification, a state must adopt the minimum federal
regulations. A state must also provide for injunctive and
monetary sanctions substantially the same as those
authorized by the pipeline safety statutes.
As part of this program, PHMSA provides reimbursable
federal grant funds to state pipeline programs to offset up
to 80% of costs. According to the author, these funds
currently range from $1 million to $1.4 million. The PHMSA
uses a point system based on program performance and
available grant dollars in awarding grant amounts.
In July 2011, PHMSA notified the State of California
pipeline safety programs that they will deduct points
beginning in 2012 if the state has not achieved the desired
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penalty levels as set forth by this bill by the end of
2012.
Increases in civil penalties by the federal government: In
an effort to enhance the security and safety of pipelines,
Congress enacted the Pipeline Safety Improvement Act of
2002 which increased the civil penalties from $25,000 per
day to $100,000 per day and changed the maximum civil
penalty for a series of related violations from $500,000 to
$1 million.
Similarly, President Obama recently signed the Pipeline
Safety, Regulatory Certainty, and Job Creation Act of 2011
to increase the civil penalties once again from $100,000
per day to $200,000 and increase the maximum civil penalty
for a series of related violations from $1 million to $2
million.
Comments
According to the author's office the assessment of civil
penalties is reserved for the most serious of violations
where the risk to the public and/or damage to the
environment has occurred or could have occurred due to
operator negligence. The $10,000 maximum penalty per
violation is too low to provide an effective deterrent or
to appropriately punish an operator for serious pipeline
safety violations.
The increases in civil penalties will make California's
penalties more in line with similar federal civil
penalties, provide for an effective deterrent,
appropriately punish an operator for serious pipeline
safety violations, and ensure that the State of California
continues to receive the appropriate federal grant funds.
The office of the State Fire Marshall's Pipeline Safety
Division . The SFM regulates the safety of approximately
5,500 miles of intrastate hazardous liquid transportation
pipelines and acts as an agent of the federal Office of
Pipeline Safety concerning the inspection of more than
2,000 miles of interstate pipelines. Pipeline Safety staff
inspect, test, and investigate to ensure compliance with
all federal and state pipeline safety laws and regulations.
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Hazardous liquid pipelines are also periodically tested for
integrity using procedures approved by the Office of the
SFM. The program has been certified by the federal
government since 1981.
Kinder Morgan Example . On November 9, 2004, in Walnut
Creek, California a petroleum pipeline owned and operated
by Kinder Morgan Energy Partners was struck by a contractor
of the Mountain Cascade Inc. who was operating in the
construction of a water pipeline. A massive gasoline spill
quickly ignited aplosion that caused the deaths of five
individuals and injuries to four others. Several homes were
ignited and one was partially destroyed. After an
investigation by the SFM, it was determined that Kinder
Morgan had failed to accurately stake-out the location of
the pipeline. The SFM assessed the maximum fee of $500,000
dollars to Kinder Morgan as a result of the investigation.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
ASSEMBLY FLOOR : 57-17, 5/14/12
AYES: Achadjian, Alejo, Allen, Ammiano, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Dickinson, Eng, Feuer, Fong,
Fuentes, Furutani, Galgiani, Gatto, Gordon, Gorell,
Halderman, Hall, Hayashi, Roger Hernández, Hill, Huber,
Hueso, Huffman, Jones, Lara, Bonnie Lowenthal, Ma,
Mendoza, Mitchell, Monning, Nestande, Olsen, Pan, V.
Manuel Pérez, Portantino, Skinner, Smyth, Solorio,
Swanson, Torres, Wieckowski, Williams, Yamada, John A.
Pérez
NOES: Conway, Donnelly, Beth Gaines, Garrick, Grove,
Hagman, Harkey, Jeffries, Knight, Logue, Mansoor, Miller,
Morrell, Nielsen, Norby, Silva, Wagner
NO VOTE RECORDED: Atkins, Cook, Davis, Fletcher, Perea,
Valadao
DLW:nl 8/7/12 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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