BILL ANALYSIS �
AB 207
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Date of Hearing: April 16, 2013
ASSEMBLY COMMITTEE ON WATER, PARKS AND WILDLIFE
Anthony Rendon, Chair
AB 207 (Rendon) - As Introduced: January 30, 2013
SUBJECT : Marine Resources and Preservation
SUMMARY : Revises requirements of an existing program governing
partial removal of offshore oil structures by modifying the
calculation of cost savings which are to be shared with the
state, the determination of net environmental benefit, and
requirements for indemnification of the state from liability.
Specifically, this bill :
1)Revises the calculation of "cost savings" for purposes of the
partial oil structure removal program to include consideration
of all costs to the applicant of participation in either the
partial or full removal program.
2)Provides that for applications for partial removal submitted
on or before January 1, 2022, the costs to the applicant of
providing surety bonds or other forms of financial assurances
to cover the state's program costs, the costs to the first
applicant to cover the state's startup costs, and the costs of
providing indemnity agreements to the state, shall be included
in the calculation of cost savings.
3)Revises the factors to be taken into account in determining
"net benefit to the marine environment" to include air quality
impacts, and requires the Ocean Protection Council (OPC) to
consult with the Air Resources Board (ARB) in determining the
criteria for evaluating net environmental benefit.
4)Extends the time period before which an application for
partial removal must be submitted in order to qualify for
certain cost sharing apportionments as follows:
a) applicant must transmit 55% of the total cost savings to the
state and other specified
entities if the application is submitted before January 1,
2022;
b) applicant must transmit 65% if application is submitted after
January 1, 2022 but before
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January 1, 2028; and
c) applicant must transmit 80% if application is submitted after
January 1, 2028.
5)Makes other technical changes.
EXISTING LAW :
1)Authorizes partial removal of a decommissioned offshore oil
platform, as an alternative to full removal, if specified
conditions are met, including but not limited to, a finding by
the OPC that partial removal would result in a net
environmental benefit to the marine environment as compared to
full removal.
2)Requires that a portion of the cost savings to the applicant
be shared with the state, a marine endowment, and other
specified entities, with the share the applicant must transmit
ranging from 55% to 80% based on the date of application. The
share of the cost savings the applicant must transmit is 55%
for applications submitted prior to January 1, 2017, 65% for
applications submitted on or after January 1, 2017 and before
January 1, 2023, and 80% for applications submitted after
January 1, 2023. Requires that the state's share be
apportioned as follows: 10% to the state General Fund, 2% to
the Fish and Game Preservation Fund, 85% to the California
Endowment for Marine Preservation, 2% to the Coastal Act
Services Fund, and 1% to the board of supervisors of the local
county.
3)Requires an applicant for partial removal of an offshore oil
structure, as a condition for approval, to enter into an
agreement with the state to indemnify the state and DFG from
liability, to the extent permitted by law, for any claims
against the state for actions the state undertakes in
implementing the program. Among other things, the program
requires DFG to take over title to, and responsibility for,
management of the remaining structure.
FISCAL EFFECT : Unknown
COMMENTS : AB 2503 (John A. P�rez), Chapter 687, Statutes of
2010, enacted the California Marine Life Legacy Act, authorizing
partial removal as an alternative to full removal of
decommissioned offshore oil structures if certain conditions are
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met. Conditions include a finding that conversion to an
artificial reef would provide a "net benefit" to the marine
environment as compared to complete removal of the facility from
the marine environment, and requires a portion of the cost
savings to the operator to be shared with the state, with a
portion being credited to the state General Fund, and a portion
to a California Endowment for Marine Preservation. The amount
of the cost savings required to be shared with the state and the
Endowment increases over time from 55% if the application is
submitted before 2017, to 65% if submitted after 2017 but before
2023, and 80% if submitted on or after 2023. This bill makes
revisions to several of the provisions of AB 2503.
Specifically, this bill allows certain costs incurred by the
applicant to be considered in determining the cost savings if
the application is submitted on or before January 1, 2022,
allows impacts to air quality to be considered in determining
"net benefit" to the marine environment, and extends by five
years the time period that companies have to submit applications
for partial removal and still retain a larger percentage of the
cost savings.
The author indicates the purpose of this bill is to create
incentives for oil companies to decommission their offshore oil
platforms. As a result of high oil prices, the program has yet
to see the first decommissioning of an offshore oil platform and
its conversion into an artificial reef. Consequently, the state
has not yet received the revenue that would flow into the
California Endowment for Marine Preservation from the
rigs-to-reef project.
Support Arguments : Supporters emphasize this bill is needed to
ensure that all actual costs incurred by applicants are
considered in determining the cost savings that are shared with
the state and the environmental endowment. Supporters believe
by allowing these costs to be included it will create a greater
incentive for owners of oil platforms to submit applications for
partial removal and to do so at an earlier date (though the
deadline for filing an application is also being extended by
this bill). Supporters also assert that all environmental
impacts, including air quality impacts and the carbon footprint
of removal, should be considered in determining the net
environmental benefit of partial versus full removal.
Related Legislation : This bill is substantially similar to AB
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2267(Hall) of last session which passed the Assembly but was
held in the Senate Appropriations Committee, except that AB 2267
did not include the provisions in this bill extending the
deadlines for filing of applications tied to apportionment of
the cost savings.
REGISTERED SUPPORT / OPPOSITION :
Support
California Sportfishing Conservancy
Coalition of Enhanced Marine Resources
Opposition
None on file.
Analysis Prepared by : Diane Colborn / W., P. & W. / (916)
319-2096