BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1300| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 1300 Author: Hancock (D) Amended: 4/21/14 Vote: 21 SENATE LABOR & INDUSTRIAL RELATIONS COMMITTEE : 3-0, 3/26/14 AYES: Hueso, Leno, Padilla NO VOTE RECORDED: Wyland, Yee SENATE APPROPRIATIONS COMMITTEE : 4-2, 5/23/14 AYES: De León, Hill, Padilla, Steinberg NOES: Walters, Gaines NO VOTE RECORDED: Lara SUBJECT : Refineries: turnarounds SOURCE : Author DIGEST : This bill requires the Department of Industrial Relations (DIR) to recoup from the owner of a refinery, the full costs of extraordinary expenditures resulting from the Division of Occupational Safety and Health's (Cal/OSHA's) response to an emergency hazardous material release or similar occurrence and requires oil refineries to annually report their schedule for "turnarounds" to Cal/OSHA, as specified. ANALYSIS : Existing law establishes Cal/OSHA, within DIR, to protect workers from health and safety hazards on the job through research and standards, enforcement and consultation programs. Among other things, Cal/OSHA promotes worker safety CONTINUED SB 1300 Page 2 through implementation of training and process safety management in refineries and other facilities, as specified. Existing law, under the California Refinery and Chemical Plant Worker Safety Act (Act) of 1990: 1.Declares that the potential consequences of explosions, fires, and releases of dangerous chemicals may be catastrophic; thus immediate and comprehensive government action must be taken to ensure that workers in petroleum refineries, chemical plants, and other related facilities are thoroughly trained and that adequate process safety management practices are implemented. 2.Defines "process safety management" as the application of management programs, as specified, when dealing with the risks associated with handling or working near hazardous chemicals and is intended to prevent or minimize the consequences of catastrophic releases of acutely hazardous, flammable, or explosive chemicals. 3.Among other things, "Process Safety Management Standards" requires: A. The Occupational Safety and Health Standards Board to adopt process safety management standards for refineries, chemical plants, and other manufacturing facilities. B. An employer to develop and maintain a compilation of written safety information to enable the employer and employees operating the machinery to identify and understand the hazards posed by processes involving acutely hazardous and flammable material. A copy of this information is to be accessible to all workers. C. An employer to perform a hazard analysis for identifying, evaluation, and controlling hazards involved in the process. D. An employer to develop, implement, and update periodically written operating procedures that provide clear instructions for safely conducting activities involved in each process consistent with the process safety information. SB 1300 Page 3 E. Each employee whose primary duties includes the operating or maintenance of a process to be trained in an overview of the process with an emphasis on the specific safety and health hazards, procedures, and safe practices applicable to the employee's job tasks as well as refresher and supplemental training documented by the employer's certification record. F. An employer to inform contractors performing work on, or near, a process of the known potential fire, explosion, or toxic release hazards related to the contractor's work; and requires that contractors have trained their employees to a level adequate to safely perform their job. 1.Requires Cal/OSHA to annually fix and collect reasonable fees for consultation, inspection, adoption of standards, and other duties conducted pursuant to the Act. The fees shall be sufficient to cover, at a minimum, the annual cost of 15 staff positions. All revenue collected is to be deposited into the Occupational Safety and Health Fund and subject to appropriation by the Legislature in the annual Budget Act. This bill: 1.Expands on the requirements for fees collected from refineries. 2.Defines what a "turnaround" at refineries is and establishes specific requirements of refineries in notifying the state of any planned turnarounds. 3.Prohibits certain information submitted to the state as a trade secret from being released to the public. With regards to the fees collected from owners for refinery safety, this bill: 1.Authorizes DIR (instead of the division within Cal/OSHA) to fix and collect reasonable fees to cover all necessary expenses, including administrative and indirect costs, for the existing consultation, inspection, adoption of standards and other duties required under the Act. 2.Additionally, authorizes the fees to be used to fund SB 1300 Page 4 participation in interagency efforts to improve safety in refineries and chemical plants. 3.Deletes the requirement in law that the fees must be sufficient to cover 15 staff positions. 4.Requires the Director of DIR to adopt rules and regulations governing the criteria and procedures to fix and collect the fees, including emergency regulations as necessary. 5.Requires the Director of DIR to recoup from the owner of a refinery (by adding the amount expended to next year's assessment), the full costs of extraordinary expenditures resulting from the division's response to a hazardous material release or similar occurrence. The Director shall document expenses for which reimbursement is sought. 6.Authorizes DIR to credit against the owner's subsequent year's assessment, any unexpended funds or hold them in reserve as a contingency fund for expenditures required by an emergency response to a hazardous material release or other situation. With regards to "turnarounds," this bill: 1.Defines "turnaround" as a planned, periodic shutdown, total or partial, of a refinery process unit or plant to perform maintenance, overhaul, and repair operations and to inspect, test, and replace process materials and equipment. 2.Specifies that "turnaround" does not include unplanned shutdowns that occur due to emergencies or other unexpected maintenance matters in a process unit or plant, or routine maintenance, as specified. 3.Requires a refinery employer to submit to Cal/OSHA a full schedule of planned "turnarounds" for the various units on September 15 of each year. 4.At the requests of Cal/OSHA, requires a refinery employer to provide on-site access and specified documentation relating to a planned turnaround at least 60 days prior to the shutdown of a process unit or plant, including: A. Corrosion reports and risk-based inspection reports; SB 1300 Page 5 B. Process Hazard Analyses; C. Boiler permit schedules; D. Management of change records related to repairs, design modifications and process changes; E. Work orders scheduled to be completed in the planned turnaround; and F. Temporary repairs since the last turnaround. 1.Requires the refinery employer to submit notification of any changes and supporting documents at least 30 days prior to a planned turnaround. 2.Authorizes Cal/OSHA, by agreement with a refinery employer, to modify the reporting period as to any individual item of information. 3.Requires Cal/OSHA to develop an electronic information management system to facilitate monitoring of petroleum refineries. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes According to the Senate Appropriations Committee, DIR estimates that it would incur annual costs of roughly $250,000 (special funds) to implement the provisions of this bill, to fund three positions required to evaluate the technical information provided by refineries. SUPPORT : (Verified 5/23/14) Asian Pacific Environmental Network Board of Supervisors of Contra Costa County Environmental Justice Alliance ARGUMENTS IN SUPPORT : According to the author, oil refineries have no obligation under state law to report their "turnaround" schedule to any part of state or local government. Nor are they required to disclose important information, such as repair schedules or corrosion reports. The author argues that given SB 1300 Page 6 the importance of "turnarounds," both to the refinery itself as well as the public safety risk they pose allowing Cal/OSHA to know this information may allow it to conduct targeted inspections of refinery facilities. This bill requires petroleum refineries to annually report their schedule for "turnarounds" to DIR and requires them to also submit documentation on refinery safety and infrastructure. Proponents argue that in the case of Chevron, had Cal/OSHA known that Chevron had not inspected the section of piping that caused the explosion, it is possible that Cal/OSHA could have done their own inspection. Doing so, they argue, could have prevented an incident that threatened public health, affected the environment, and imposed severe financial costs. PQ:e 5/25/14 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****