California Legislature—2013–14 Regular Session

Assembly Bill No. 207

Introduced by Assembly Member Rendon

January 30, 2013

An act to amend Sections 6602, 6612, 6613, 6616, and 6618 of the Fish and Game Code, relating to marine resources.

LEGISLATIVE COUNSEL’S DIGEST

AB 207, as introduced, Rendon. Marine resources and preservation.

The California Marine Resources Legacy Act establishes a program, administered by the Department of Fish and Wildlife, to allow partial removal of offshore oil structures. The act authorizes the department to conditionally approve the partial removal of offshore oil structures, if specified criteria are satisfied, including a finding that the alternative of partial removal provides a net environmental benefit and substantial cost savings compared to the alternative of full removal of these structures. The act requires the first person to file an application on and after January 1, 2011, to partially remove an offshore oil structure to pay, in addition to other specified costs, the startup costs incurred by the department or the State Lands Commission to implement the act, including the costs to develop and adopt regulations. The act requires the payment of startup costs to be reimbursed by the department, as specified. The act requires the Ocean Protection Council, for purposes of determining whether partial removal provides a net environmental benefit, to establish specified criteria, to consult with the department, the California Coastal Commission, the State Lands Commission, the California Ocean Science Trust, and other responsible agencies as to those criteria, and requires certification that partial removal complies with the California Environmental Quality Act, among other things. The act requires the State Lands Commission to determine the cost savings of partial removal, and requires the applicant, upon conditional approval for conversion, to apportion a percentage of the cost-savings funds in accordance with a prescribed schedule to specified entities and funds. The act defines “cost savings” to mean the difference between the estimated cost to the applicant of complete removal of an oil platform, as required by state and federal leases, and the estimated costs to the applicant of partial removal of the oil platform pursuant to the act, and specifically provides for the inclusion of certain costs in cost savings.

This bill would include certain additional costs in cost savings calculations for purposes of these provisions.

The bill would specify additional costs in cost savings calculations to be used for applications submitted on or before January 1, 2022. The bill would not require the payment of startup costs to be reimbursed by the department for those applications, as specified.

The bill would require the council, in determining whether partial removal of the structure would provide a net benefit to the marine environment compared to full removal of the structure, to take certain adverse impacts to air quality into account and to consult with the State Air Resources Board, among other entities.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 6602 of the Fish and Game Code is
amended to read:

6602.  

For purposes of this chapter, the following terms have
the following meanings:

(a) “Applicant” means the owner or operator of an offshore oil
structure in state or federal waters or another party responsible for
decommissioning an offshore oil structure in state or federal waters
who applies pursuant to this chapter to carry out partial removal
of the structure.

(b) “Commission” means the State Lands Commission.

(c) “Conservancy” means the State Coastal Conservancy.

(d) “Cost savings” means the difference between the estimated
cost to the applicant of complete removal of an oil platform as
required by state and federal leases and the estimated costs to the
applicant of partial removal of the oil platform pursuant to this
begin delete chapter. end delete begin insert chapter, including all costs to the applicant of end insert
begin insert participation in either program. end insert

(e) “Council” means the Ocean Protection Council.

(f) “Endowment” means the California Endowment for Marine
Preservation established in Division 37 (commencing with Section
71500) of the Public Resources Code.

(g) “Exclusive economic zone (EEZ)” means the zone as
measured from the mean high tide line seaward to 200 nautical
miles, as set forth in Presidential Proclamation 5030 of March 10,
1983, in which the United States proclaimed jurisdiction over the
resources of the ocean within 200 miles of the coastline.

(h) “National Fishing Enhancement Act of 1984” means Title
II of Public Law 98-623.

(i) “Offshore oil structure” means platforms, piers, and artificial
islands located seaward of mean lower low water, used for oil and
gas exploration, development, production, processing, or storage.

(j) “Oil” means any kind of petroleum, liquid hydrocarbons,
natural gas, or petroleum products or any fraction or residues
therefrom.

(k) “Open coastal marine resources” means those marine
resources that use open coastal waters as their habitat.

(l) “Open coastal waters” means the area composed of the
submerged lands of the state that are below the mean lower low
water, extending seaward to the boundaries of the exclusive
economic zone.

(m) “Partial removal” means an alternative to full removal of
an offshore oil structure, in compliance with all requirements of
this chapter.

(n) “State waters” means waters within the seaward boundary
of the state as identified in Section 2 of Article III of the California
Constitution.

SEC. 2.  

Section 6612 of the Fish and Game Code is amended
to read:

6612.  

(a) Upon receipt of an application to partially remove
an offshore oil structure pursuant to this chapter, the department
shall determine whether the application is complete and includes
all information needed by the department.

(b) (1) Upon a determination that the application is complete,
the applicant shall provide surety bonds executed by an admitted
surety insurer, irrevocable letters of credit, trust funds, or other
forms of financial assurances, determined by the department to be
available and adequate, to ensure that the applicant will provide
sufficient funds to the department, council, commission, and
conservancy to carry out all required activities pursuant to this
article, including all of the following:

(A) Environmental review of the proposed project pursuant to
Section 6604.

(B) A determination of net environmental benefit pursuant to
Section 6613.

(C) A determination of cost savings pursuant to Section 6614.

(D) Preparation of a management plan for the structure pursuant
to Section 6615.

(E) Implementation of the management plan and ongoing
maintenance of the structure after the department takes title
pursuant to Section 6620.

(F) Development of an advisory spending plan pursuant to
Section 6621.

(G) Other activities undertaken to meet the requirements of this
article, including the costs of reviewing applications for
completeness, and reviewing, approving, and permitting the
proposed project, which includes the costs of determining whether
the project meets the requirements of all applicable laws and
regulations and the costs of environmental assessment and review.

(2) The department shall consult with the council, commission,
and conservancy in determining appropriate funding for activities
to be carried out by those agencies.

(3) The funds provided pursuant to paragraph (1) shall not be
considered in the calculation of cost savings pursuant to Section
6614 or the apportionment of cost savings pursuant to Section
6618.

(c) The first person to file an application on and after January
1, 2011, to partially remove an offshore oil structure pursuant to
this chapter, shall pay, in addition to all costs identified under
subdivision (b), the startup costs incurred by the department or the
commission to implement this chapter, including the costs to
develop and adopt regulations pursuant to this chapter. This
payment of startup costs shall be reimbursed by the department as
provided in paragraph (3) of subdivision (c) of Section 6618.

(d) As soon as feasible after reaching the agreement pursuant
to subdivision (b), the lead agency shall begin the environmental
review of the proposed project as required pursuant to Section
6604.

begin insert

(e) For applications submitted on or before January 1, 2022,
the provisions of subdivisions (a) through (d) shall apply, except
as follows:

end insert begin insert

(1) The funds provided pursuant to paragraph (1) of subdivision
(b) and subdivision (c) shall be included in the calculation of cost
savings pursuant to Section 6614 and the apportionment of cost
savings pursuant to Section 6618.

end insert begin insert

(2) The funds paid by the first person to file an application, as
specified in subdivision (c), shall be included in the calculation of
the first applicant’s cost savings pursuant to Section 6614.
Notwithstanding paragraph (3) of subdivision (c) of Section 6618,
the payment of startup costs shall not be reimbursed by the
department.

end insert

SEC. 3.  

Section 6613 of the Fish and Game Code is amended
to read:

6613.  

(a) The council shall determine whether the partial
removal of an offshore oil structure pursuant to this chapter
provides a net benefit to the marine environment compared to the
full removal of the structure.

(b) As a necessary prerequisite to determining net environmental
benefit as required in subdivision (a), the council shall, upon receipt
of its initial application from the department pursuant to Section
6610, establish appropriate criteria for evaluating the net
environmental benefit of full removal and partial removal of
offshore oil structures.

(1) The criteria shall include, but are not limited to, the depth
of the partially removed structure in relation to its value as habitat
and the location of the structure, including its proximity to other
reefs, both natural and artificial.

(2) The criteria shall not include any consideration of the funds
to be generated by the partial removal of the structure.

(3) In determining the criteria, the council shall consult with
appropriate entities, including, but not limited to, the department,
the commission, the begin insert State Air Resources Board, the end insert California
Coastal Commission, and the California Ocean Science Trust.

(4) The council shall establish the criteria in time to use them
in making its initial determination of net environmental benefit
pursuant to this section.

(c) Upon certification of environmental documents pursuant to
the California Environmental Quality Act begin insert (Division 13 end insert
begin insert (commencing with Section 21000) of the Public Resources Code) end insert ,
the council shall, based on the criteria developed pursuant to
subdivision (b) and other relevant information, determine whether
partial removal of the structure would provide a net benefit to the
marine environment compared to full removal of the structure. In
making the determination, the council shall, at a minimum, take
into account the following:

(1) The contribution of the proposed structure to protection and
productivity of fish and other marine life.

(2) Any adverse impacts to biological begin delete resources or end delete begin insert resources, end insert
water quality, or begin insert air quality, or end insert any other marine environmental
impacts, from the full removal of the facility that would be avoided
by partial removal as proposed in the application.

(3) Any adverse impacts to biological begin delete resources or end delete begin insert resources, end insert
water quality, or begin insert air quality, or end insert any other marine environmental
impacts, from partial removal of the structure as proposed in the
application.

(4) Any benefits to the marine environment that would result
from the full removal of the structure or from partial removal as
proposed in the application.

(5) Any identified management requirements and restrictions
of the partially removed structure, including, but not limited to,
restrictions on fishing or other activities at the site.

(d) Benefits resulting from the contribution of cost savings to
the endowment shall not be considered in the determination of net
environmental benefit.

(e) The council may contract or enter into a memorandum of
understanding with any other appropriate governmental or
nongovernmental entity to assist in its determination of net
environmental benefit.

(f) The determination made pursuant to this section and
submitted to the department by the council shall constitute the
final determination and shall not be revised except by the council.

(g) The council shall take all feasible steps to complete its
determination in a timely manner that accommodates the
department’s schedule for consideration of the application.

SEC. 4.  

Section 6616 of the Fish and Game Code is amended
to read:

6616.  

The department may grant conditional approval of an
application for partial removal of an offshore oil structure only if
all of the following criteria are satisfied:

(a) The partial removal of the offshore oil structure and the
planning, development, maintenance, and operation of the structure
would be consistent with all applicable state, federal, and
international laws, including, but not limited to, all of the
following:

(1) The federal Magnuson-Stevens Fishery Conservation and
Management Act (16 U.S.C. Sec. 1801 et seq.).

(2) The federal National Fishing Enhancement Act of 1984 (33
U.S.C. Sec. 2101 et seq.).

(3) The federal Coastal Zone Management Act begin insert of 1972 end insert (16
U.S.C. Sec. 1451 et seq.).

(4) The California Coastal Management Program.

(5) The Marine Life Management Act (Part 1.7 (commencing
with Section 7050)).

(6) The Marine Life Protection Act (Chapter 10.5 (commencing
with Section 2850) of Division 3).

(7) State and federal water quality laws.

(8) Navigational safety laws.

(b) The partial removal of the offshore oil structure provides a
net benefit to the marine environment compared to full removal
of the structure, as determined pursuant to Section 6613.

(c) The cost savings that would result from the conversion of
the offshore oil platform or production facility have been
determined pursuant to Section 6614.

(d) The applicant has provided sufficient funds consistent with
subdivision (b) of Section 6612.

(e) The department and the applicant have entered into a
contractual agreement whereby the applicant will provide sufficient
funds for overall management of the structure by the department,
including, but not limited to, ongoing management, operations,
maintenance, monitoring, and enforcement as these relate to the
structure.

(f) The department has entered into an indemnification
agreement with the applicant that indemnifies the state and the
department, to the extent permitted by law, against any and all
liability that may result, including, but not limited to, active
negligence, and including defending the state and the department
against any claims against the state for any actions the state
undertakes pursuant to this article. The agreement may be in the
form of an insurance policy, cash settlement, or other mechanism
as determined by the department. In adopting indemnification
requirements for the agreement, the department shall ensure that
the state can defend itself against any liability claims against the
state for any actions the state undertakes pursuant to this article
and pay any resulting judgments. The department shall consult
with and, as necessary, use the resources of the office of the
Attorney General in preparing and entering into the indemnification
agreement. begin insert The cost to the applicant of providing indemnification end insert
begin insert by agreement, insurance policy, cash settlement, or other end insert
begin insert mechanism shall be included in the calculation of cost savings end insert
begin insert pursuant to Section 6614 only for applications submitted on or end insert
begin insert before January 1, 2022. end insert

(g) The applicant has applied for and received all required
permits, leases, and approvals issued by any governmental agency,
including, but not limited to, a lease issued by the commission if
the proposed project involves state tidelands and submerged lands.
For structures located in federal waters, all of the following
requirements shall be met:

(1) The department and the owner or operator of the structure
reach an agreement providing for the department to take title to
the platform or facility as provided in Section 6620.

(2) The department acquires the permit issued by the United
States Army Corps of Engineers.

(3) The partial removal of the structure is approved by the
Bureau of Ocean Energy Management, Regulation and
Enforcement of the United States Department of the Interior.

SEC. 5.  

Section 6618 of the Fish and Game Code is amended
to read:

6618.  

(a) The cost savings from the partial removal of an
offshore oil structure, as determined pursuant to Section 6614,
shall be apportioned and transmitted as described in this section.

(b) Upon receipt of conditional approval pursuant to Section
6617, the begin delete owner or operator of the structure end delete begin insert applicant end insert shall
apportion and directly transmit a portion of the total amount of the
cost savings to the entities in subdivision (c) as follows:

(1) Fifty-five percent, if begin delete transmitted end delete begin insert the application was end insert
begin insert submitted end insert before January 1, begin delete 2017 end delete begin insert 2022 end insert .

(2) Sixty-five percent, if begin delete transmitted end delete begin insert the application was end insert
begin insert submitted end insert on or after January 1, begin delete 2017 end delete begin insert 2022 end insert , and before January 1,
begin delete 2023 end delete begin insert 2028 end insert .

(3) Eighty percent, if begin delete transmitted end delete begin insert the application was submitted end insert
on or after January 1, begin delete 2023 end delete begin insert 2028 end insert .

(c) Of the total amount of the cost savings to be transmitted
pursuant to subdivision (b), the applicant shall directly transmit
the following amounts to the following entities:

(1) Eighty-five percent shall be deposited into the California
Endowment for Marine Preservation established pursuant to
Division 37 (commencing with Section 71500) of the Public
Resources Code.

(2) Ten percent shall be deposited into the General Fund.

(3) Two percent shall be deposited into the Fish and Game
Preservation Fund for expenditure, upon appropriation by the
Legislature, by the department to pay any costs imposed by this
chapter that are not otherwise provided for pursuant to subdivision
(b) of Section 6612 and subdivision (e) of Section 6616. Any
moneys remaining in the Fish and Game Preservation Fund, after
providing for these costs, shall be used, upon appropriation by the
Legislature, first to reimburse the payment of the startup costs
described in subdivision (c) of Section 6612, and thereafter to
conserve, protect, restore, and enhance the coastal and marine
resources of the state consistent with the mission of the department.

(4) Two percent shall be deposited into the Coastal Act Services
Fund, established pursuant to Section 30620.1 of the Public
Resources Code, and shall be allocated to support state agency
work involving research, planning, and regulatory review
associated with the application and enforcement of coastal
management policies in state and federal waters pursuant to state
and federal quasi-judicial authority over offshore oil and gas
development.

(5) One percent shall be deposited with the board of supervisors
of the county immediately adjacent to the location of the facility
prior to its decommissioning. The amount paid to the county shall
be managed pursuant to paragraph (1) of subdivision (d) of Section
6817 of the Public Resources Code.