BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    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





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          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. 








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             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  







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            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;







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             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  







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          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

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