BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2564
                                                                  Page 1

          (  Without Reference to File  )

          CONCURRENCE IN SENATE AMENDMENTS
          AB 2564 (Ma)
          As Amended  August 31, 2012
          2/3 vote.  Urgency 
           
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          |ASSEMBLY:  |71-0 |(August 23,     |SENATE: |31-4 |(August 31,    |
          |           |     |2012)           |        |     |2012)          |
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          Original Committee Reference:   NAT. RES.  
           
          SUMMARY  :  Expands the application of an existing California 
          Environmental Quality Act (CEQA) exemption for pipeline projects 
          less than one mile in length.  

           The Senate amendments  :

          1)Sunset the bill's provisions on January 1, 2018, at which 
            point existing law will become operative.

          2)Delete the provision that requires an applicant for a natural 
            gas pipeline safety enhancement activity to agree to the 
            amount of the fees charged by the public agency to contract 
            with third parties to assist in determining whether to approve 
            the activity.
           
           EXISTING LAW  :

          1)Requires lead agencies with the principal responsibility for 
            carrying out or approving a proposed project to prepare a 
            negative declaration, mitigated negative declaration, or 
            environmental impact report for this action, unless the 
            project is exempt from CEQA (CEQA includes various statutory 
            exemptions, as well as categorical exemptions in the CEQA 
            Guidelines).

          2)Provides that CEQA does not apply to a pipeline project less 
            than one mile in length within a public street or highway or 
            any other public right-of-way for the installation of a new 
            pipeline or the maintenance, repair, restoration, 
            reconditioning, relocation, replacement, removal, or 
            demolition of an existing pipeline.  Excludes any surface 








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            facility related to the operation of the underground pipeline.

          3)Requires the CEQA Guidelines to include a list of classes of 
            projects that have been determined by the Secretary of the 
            Natural Resources Agency to not to have a significant effect 
            on the environment and that shall be exempt from CEQA.  
            Included in this list of "categorical exemptions" are:

             a)   Repair and maintenance of existing public or private 
               facilities, involving negligible or no expansion of use, 
               including existing facilities of both investor and publicly 
               owned utilities used to provide electric power, natural 
               gas, sewerage, or other public utility services.  
               (Guidelines Section 15301)

             b)   Replacement or reconstruction of existing facilities on 
               the same site with the same purpose and capacity, including 
               existing utility systems and/or facilities involving 
               negligible or no expansion of capacity.  (Guidelines 
               Section 15302)

          4)Require each gas utility to prepare and submit to the PUC a 
            proposed comprehensive pressure testing implementation plan 
            and implementation timeline for all intrastate transmission 
            lines to either pressure test those lines or to replace all 
            segments of intrastate transmission lines that were not 
            pressure tested or that lack sufficient details related to 
            performance of pressure testing.  

           FISCAL EFFECT  :  According to the Assembly Appropriations 
          Committee, minor, absorbable state costs to consider 
          applicability of the exemption to a pipeline enhancement safety 
          project and potential costs of an unknown amount, but likely no 
          more than tens of thousands of dollars, to a state agency that 
          elects to establish a process to allow an applicant for a 
          natural gas pipeline safety enhancement project to voluntarily 
          pay fees to be used by the agency for a third-party contract to 
          determine whether to approve the project (various funds).
           
          AS PASSED BY THE ASSEMBLY  , this bill  
           
          1)Required a "resource agency," in determining whether a 
            "natural gas pipeline safety enhancement activity" is eligible 
            for the one-mile exemption, to consider only the length of 
            pipeline that is within the agency's legal jurisdiction.








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          2)Revised the definition of "pipeline" to include surface 
            accessories or appurtenances to a pipeline (all surface 
            facilities are currently excluded).

          3)Defined "resource agency" as the State Lands Commission, 
            Coastal Commission, Department of Fish and Game, State Water 
            Resources Control Board, regional water quality control 
            boards, and local or regional agencies with coastal permitting 
            authority.

          4)Defined "natural gas pipeline safety enhancement activity" as 
            an activity undertaken by a public utility as part of a 
            program to enhance the safety of intrastate natural gas 
            pipelines in accordance with a decision, rule, or regulation 
            adopted by the Public Utilities Commission (PUC).

          5)Authorized public agencies to allow the applicant for a 
            natural gas pipeline safety enhancement activity to pay for a 
            contract with a third party to assist the public agency in 
            reviewing the project.

          6)Contained findings regarding natural gas pipeline safety, 
            including statutory and PUC requirements for pressure testing 
            and replacement established in response to the September 9, 
            2010 pipeline rupture, explosion and fire in San Bruno.

           COMMENTS  :  CEQA provides a process for evaluating the 
          environmental effects of applicable projects undertaken or 
          approved by public agencies.  If a project is not exempt from 
          CEQA, an initial study is prepared to determine whether the 
          project may have a significant effect on the environment.  If 
          the initial study shows that there would not be a significant 
          effect on the environment, the lead agency must prepare a 
          negative declaration.  If the initial study shows that the 
          project may have a significant effect on the environment, the 
          lead agency must prepare an EIR.

          Generally, an EIR must accurately describe the proposed project, 
          identify and analyze each significant environmental impact 
          expected to result from the proposed project, identify 
          mitigation measures to reduce those impacts to the extent 
          feasible, and evaluate a range of reasonable alternatives to the 
          proposed project.  Prior to approving any project that has 
          received environmental review an agency must make certain 








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          findings.  If mitigation measures are required or incorporated 
          into a project, the agency must adopt a reporting or monitoring 
          program to ensure compliance with those measures.

          CEQA includes limited exemptions for relatively small-scale 
          pipeline maintenance and installation projects.  A general 
          exemption is available for projects under one mile in length.  A 
          more specific exemption is available for projects up to eight 
          miles in length involving maintenance and replacement, but not 
          expansion, of pipelines regulated under the Pipeline Safety Act 
          (e.g., petroleum pipelines).

          This bill would direct a resource agency which is the lead 
          agency for CEQA review of a natural gas safety enhancement 
          activity to consider only the length of pipeline within the 
          agency's legal jurisdiction.  For an agency with a 
          clearly-defined geographic jurisdiction, such as the Coastal 
          Commission, the bill appears to expand the application of the 
          one-mile exemption by allowing part of a project of more than 
          one mile to qualify for the exemption if less than one mile of 
          the project lies within the Coastal Zone.  For an agency with 
          jurisdiction throughout the state, such as Fish and Game, the 
          bill appears to have negligible effect.

           
          Analysis Prepared by  :    Mario DeBernardo / NAT. RES. / (916) 
          319-2092 


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