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 ----------------------------------------------------------------- |ASSEMBLY: |71-0 |(August 23, |SENATE: |31-4 |(August 31, | | | |2012) | | |2012) | ----------------------------------------------------------------- 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 AB 2564 Page 2 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. AB 2564 Page 3 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 AB 2564 Page 4 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 FN: 0005908