BILL ANALYSIS Ó
SB 1300
Page 1
Date of Hearing: August 28, 2014
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Roger Hernández, Chair
SB 1300 (Hancock) - As Proposed to be Amended: August 28, 2014
REVISED
SENATE VOTE : 24-9
SUBJECT : Refineries: turnarounds.
SUMMARY : Enacts specified requirements related to refinery
"turnarounds." Specifically, 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)Excludes from the definition of "turnaround" 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 the Division of
Occupational Safety and Health (DOSH) a full schedule of
planned turnarounds for all affected units every September 15
for the following calendar year.
4)Requires a petroleum refinery employer, at the request of
DOSH, to provide on-site access and to allow DOSH to review
specified documentation relating to a planned turnaround at
least 60 days prior to the shutdown, including:
a) All corrosion reports and risk-based inspection reports
generated since the last turnaround.
b) Process hazard analyses generated since the last
turnaround.
c) Boiler permit schedules.
d) Management of change records related to repairs, design
modifications and process changes.
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e) Work orders scheduled to be completed in the planned
turnaround.
f) All temporary repairs made since the last turnaround.
g) Notification and description of all repairs, design
modifications, or process changes described in a corrosion
report, risk-based inspection report, process hazard
analysis, boiler permit schedule, management of change
record, work order, or other specified documents that the
petroleum refinery employer has deferred to a subsequent
operational period or turnaround.
5)Requires a petroleum refinery employer to submit notification
of any changes to the information or supporting documents
reviewed by DOSH at least 30 days before a planned turnaround,
at the request of DOSH.
6)Requires a petroleum refinery employer, at DOSH's request, to
provide physical copies, or, at DOSH's discretion, electronic
copies if available, of specified documentation.
7)Authorizes DOSH, by agreement with a petroleum refinery
employer, to modify the reporting period as to any individual
item of information.
8)Defines "trade secret" to mean a trade secret as defined under
specified existing law and shall include turnaround schedules
submitted to DOSH and the scheduling, duration, layout,
configuration and type of work to be performed that may
provide economic value to anyone other than the petroleum
refinery employer shall be deemed information used to
fabricate, produce, or compound an article of trade or a
service having commercial value and which gives its users an
opportunity to obtain a business advantage over competitors
who do not know or use it .
9)Specifies that the wages, hours, benefits, job
classifications, and training standards for employees
performing work for petroleum refinery employers is not a
trade secret.
10)Provides that if a petroleum refinery employer believes that
information submitted to DOSH may involve the release of a
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trade secret, it shall nevertheless provide this information
to DOSH.
11)Requires DOSH to not release to the public any information
designated as a trade secret, except as provided.
12)Provides that, upon the receipt of a request for the release
of information to the public that includes information that is
a trade secret, DOSH shall notify the petroleum refinery
employer in writing.
13)Provides that DOSH shall release specified information to the
public unless:
a) Within 30 days of receipt of notice of the request the
petroleum refinery employer files an action for a
declaratory judgment that the information is protected as a
trade secret and notifies DOSH; and
b) Within 120 days of receipt of notice of the request the
petroleum refinery employer obtains an order prohibiting
disclosure of the information to the public and notifies
DOSH.
14)States that, except as provided above, any information that
has been designated as a trade secret shall not be released to
the public, except that such information may be disclosed to
other officers or employees of DOSH, as specified.
15)Provides that if the person requesting the release of
information or the petroleum refinery employer files and
action to order or prohibit the disclosure of trade secret
information, the person instituting the proceeding shall name
the person or the refinery employer as a real party in
interest.
16)Provides that the petroleum refinery employer filing an
action to enjoin the disclosure of public records or related
declaratory relief shall provide notice of the action to the
person requesting the release of the information at the same
time the defendant in the action is served. The person filing
an action to compel release of public records shall provide
notice of the action to the petroleum refinery employer that
submitted the records at the same time the defendant in the
action is served.
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17)Provides that the court shall award costs and reasonable
attorney's fees to the party that prevails in litigation. The
public agency shall not bear the court costs for any party
named in litigation.
18)Provides that this bill does not prohibit the exchange of
trade secrets between local, state or federal public agencies
or state officials when those trade secrets are relevant and
reasonably necessary to the exercise of their jurisdiction.
19)Provides that an officer or employee of DOSH (including a
contractor with DOSH and an employee of the contractor) who
knowingly and willfully discloses trade secret information, as
specified, is guilty of a misdemeanor.
20)Makes related and conforming changes.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, the Department of Industrial Relations estimates
first year costs of approximately $765,000 (special funds) and
second year costs of approximately $705,000 (special funds) for
three positions to evaluate technical information provided by
the refineries and for two counsel positions to assist with
trade secrecy workload.
COMMENTS : According to the American Petroleum Institute (API),
a refinery turnaround is a planned, periodic shut down (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. Turnarounds are
scheduled at least one to two years in advance and depending on
the process unit and the amount of maintenance needed, the
length of the turnaround can vary from one to four weeks or
more. API also stated that the less often units are started up
and taken down, the safer it is since refinery incidents are
more likely to occur during turnarounds.
Background on August 2012 Explosion at Chevron Richmond Oil
Refinery
According to an Interim Investigation Report from the U.S.
Chemical Safety and Hazard Investigation Board on the Chevron
Richmond Refinery Fire:
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"On August 6, 2012, the Chevron U.S.A. Inc. Refinery in
Richmond, California experienced a catastrophic pipe failure
in the #4 Crude Unit. The pipe ruptured, releasing flammable,
hydrocarbon process fluid that partially vaporized into a
large vapor cloud that engulfed nineteen Chevron employees.
All of the employees escaped, narrowly avoiding serious
injury. The ignition and subsequent continued burning of the
hydrocarbon process fluid resulted in a large plume of unknown
and unquantified particulates and vapor traveling across the
Richmond, California, area. In the weeks following the
incident, approximately 15,000 people from the surrounding
area sought medical treatment due to the release."
Multiple agencies opened investigations in response to the
incident including the Division of Occupational Safety and
Health (DOSH), the U.S. Chemical Safety and Hazard
Investigation Board (CSB), and the U.S. Environmental Protection
Agency (U.S. EPA). Additionally, Chevron also completed its own
internal investigation. The investigations identified serious
concerns about process safety management procedures at the
refinery and expressed the need for stronger preventative
safeguards.
On January 30, 2013, DOSH issued 25 citations against Chevron
USA, with proposed penalties totaling nearly $1 million
($963,200), for state safety standard violations related to the
refinery explosion. The citations included eleven "willful
serious" and twelve "serious" violations, resulting in the
highest penalties in DOSH's history. Among DOSH's findings, they
reported that:
Chevron did not follow the recommendations of its own
inspectors and metallurgical scientists to replace the
corroded pipe that ultimately ruptured and caused the fire.
Those recommendations dated back to 2002.
Chevron did not follow its own emergency shutdown
procedures when the leak was identified, and did not
protect employees.
Improving Public and Worker Safety at Oil Refineries: Report of
the Interagency Working Group on Refinery Safety
Following the August 2012 explosion at Chevron's Richmond Oil
Refinery, Governor Brown convened a 13-agency Working Group to
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explore ways of improving public and worker safety at and around
oil refineries through enhanced oversight, and to strengthen
emergency preparedness. Over an 18-month period, the group met
internally and with industry, labor, community, environmental,
academic, local emergency response and other stakeholders.
The report details recommendations to improve emergency response
and preparedness. Specifically, the report made the following
recommendations:
Coordinating regulatory activities to avoid
duplication and increase effectiveness.
Establishing clear criteria for unified response
during emergencies and aligning radio communications
between industry firefighters and local first responders.
Improving information and data flows from refineries
to the public and state and local agencies.
Requiring refineries to implement inherently safer
systems to prevent emergencies and better protect workers
and neighboring communities.
Strengthening enforcement capacity to ensure
adequate oversight of refineries.
Assessing operational safety and organizational
structures at refineries to reduce human factors such as
lack of training, insufficient experience or fatigue that
can cause hazards.
Providing greater community access to air quality
monitoring information in and around refineries.
An Interagency Refinery Task Force was established in August
2013 to continue overseeing progress on the recommendations, and
will meet bimonthly to ensure proper implementation.
Recent Budgetary Action to Improve DOSH Staffing For Refinery
Safety
Last year's budget included changes to the Labor Code which
required DOSH to use its statutory authority to approve a fee by
March 31, 2014, to support an increase in funding and at least
15 new positions for the Process Safety Unit, which inspects oil
refineries and chemical plants. Those changes were enacted by
SB 71 (Budget and Fiscal Review Committee) and added Section
7870 to the Labor Code, which provides as follows:
"Notwithstanding the availability of federal funds to carry
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out the purposes of this part, the division shall annually
fix and collect reasonable fees for consultation,
inspection, adoption of standards, and other duties
conducted pursuant to this part. The fees shall be adopted
by March 31, 2014. All revenue collected from these fees
shall be deposited into the Occupational Safety and Health
Fund. The fees shall be sufficient to support, at a
minimum, the annual cost of 15 positions. The expenditure
of these funds shall be subject to appropriation by the
Legislature in the annual Budget Act or other measure."
In addition, the most recently-enacted budget appropriated
funding to DIR from the Occupational Safety and Health Fund for
the following purposes:
The Department of Industrial Relations shall report to
the Director of Finance, the chairpersons of the fiscal
committees of both houses of the Legislature, and the
Legislative Analyst's Office by February 1, 2015, on (a)
the status of Process Safety Management and Risk Management
Program regulatory changes, and (b) the status of all
efforts the department is making to implement
recommendations of the final report from the Governor's
Interagency Working Group on Refinery Safety.
The Department of Industrial Relations shall report to
the Director of Finance, the chairpersons of the fiscal
committees of both houses of the Legislature, and the
Legislative Analyst's Office by February 1, 2015, on (a)
the status of the department's annual workload evaluation
of the staffing needed to meet the enforcement requirements
of Section 7870 of the Labor Code, for both refinery
facilities and nonrefinery facilities that meet the
threshold for Cal-OSHA Process Safety Management regulatory
oversight, and the aggregate fees needed to support the
function, (b) the department's process or plan for
categorizing nonrefinery facilities that meet the threshold
for Cal-OSHA Process Safety Management regulatory oversight
by type of facility, risk level, and inspection cycles, (c)
the number of staffing vacancies, by classification, within
the Process Safety Management Unit, and (d) the number of
inspections performed, to date, during the current fiscal
year, by both type of facility and type of inspection.
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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 the importance of
"turnarounds," both to the refinery itself as well as the public
safety risk they pose, allowing DOSH to know this information
may allow it to conduct targeted inspections of refinery
facilities. This bill would require petroleum refineries to
annually report their schedule for "turnarounds" to the division
and would require them to also submit documentation on refinery
safety and infrastructure.
Proponents argue that in the case of Chevron, had DOSH known
that Chevron had not inspected the section of piping that caused
the explosion, it is possible that DOSH 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.
ARGUMENTS IN OPPOSITION :
The California Newspaper Publishers Association argues that the
bill allows oil companies to control DIR's duty to disclose
information under the California Public Records Act (CPRA).
Specifically, they argue that section (b) of the bill requires
DIR to notify a refiner when information is requested and
permits the refiner to go to court to seek injunctive relief.
Nothing in the bill requires the court to apply the principles
of the CPRA when it makes that determination. CNPA contends
this would lead to the following scenario: A member of the
public submits a CPRA request to DIR for information that she
believes is proper for disclosure. DIR notifies the refiner
that a request for the refiner's information has been received.
The refiner goes to court files an action against DIR for
injunctive relief to prevent the disclosure of the information.
The person who requested the information will be named as a
defendant in the lawsuit filed by the refiner. This result is
fundamentally unfair for the requester who may or may not have
been willing to go to court to enforce her rights under the CPRA
but now finds that she is an unwilling defendant in a lawsuit
and must now pay her own expenses for a lawyer and the costs
associated with the action. This is fundamentally unfair. To
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top it off she could also have to pay the attorney's fees and
costs of the oil refiner if the refiner is the prevailing party.
This is a perversion of the public's role in government
oversight and eviscerates the notion of due process.
In addition, CNPA argues that the definition of trade secret,
while better than before, will be significantly broader than
existing law. It would also allow refiners to stamp just about
anything a trade secret, whether or not it meets the criteria in
the bill and the public would have no ability challenge whether
the refiner's assertion was proper under this bill. The public
would have no ability to monitor DIR to determine whether it is
effective in overseeing this powerful industry or if it is
ineffective because of a cozy relationship with the industry or
some other reason.
PRIOR RELATED LEGISLATION :
This bill is very similar to SB 438 (Hancock) from 2013. SB 438
was held in the Assembly Appropriations Committee.
COMMITTEE STAFF COMMENTS :
Following the original policy committee hearing on this bill,
language was added to address issues related to the protection
of "trade secret" information. However, such language was not
previously heard in a policy committee. Recently, a number of
concerns have been expressed about the breadth of the trade
secret definition contained in the bill and other related
provisions.
The author has agreed to a number of amendments (to be adopted
in committee) in order to address these concerns:
1)Some stakeholders have expressed concern about the breadth of
the trade secret definition and whether it could be construed
to preclude or interfere with access to information relevant
to ensuring compliance with existing labor law related to
working conditions and other labor standards.
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Therefore, the author has agreed to the following amendment to
address this concern:
On page 4, after line 32, insert "The wages, hours, benefits,
job classifications, and training standards for employees
performing work for petroleum refinery employers is not a
trade secret."
2)Concern has also been expressed that the trade secret language
may interfere with or delay proper oversight, including
legislative oversight, of the subject matter of this bill.
Therefore, the author has agreed to the following amendment to
address this concern:
On page 6, line 10 through 13, amend subdivision (e) to read
as follows: "This section shall not be construed to prohibit
the exchange of trade secrets between local, state, or federal
public agencies or state officials when those trade secrets
are relevant and reasonably necessary to the exercise of their
authority."
3)The author has agreed to amend the section of the bill
defining trade secret so that Section 7873(a) shall read as
follows:
(a) As used in this section, "trade secret" means a trade
secret as defined in subdivision (d) of Section 6254.7 of the
Government Code or Section 1061 of the Evidence Code . For the
purposes of Section 6254.7 of the Government Code , and shall
include the schedule submitted to the division pursuant to
subdivision (b) of Section 7872 of this code, and the
scheduling, duration, layout, configuration, and type of work
to be performed during a turnaround that may provide economic
value to any person other than the petroleum refinery employer
shall be deemed information used to fabricate, produce, or
compound an article of trade or a service having commercial
value and which gives its users an opportunity to obtain a
business advantage over competitors who do not know or use it .
Upon completion of a turnaround, the scheduling and duration
of that turnaround shall no longer be considered a trade
secret.
In addition, the language discussed in Comment 1 above will be
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added to end of this subdivision.
4)In order to ensure that interested parties are informed of a
request to compel release of information or an action to
enjoin disclosure, the author has agreed to add additional
service requirements as follows:
On page 6, line 5, after "interest." insert "The petroleum
refinery employer filing an action to enjoin the disclosure of
public records or related declaratory relief shall provide
notice of the action to the person requesting the release of
the information at the same time the defendant in the action
is served. The person filing an action to compel release of
public records shall provide notice of the action to the
petroleum refinery employer that submitted the records at the
same time the defendant in the action is served."
REGISTERED SUPPORT / OPPOSITION :
Support
Asian Pacific Environmental Network
Board of Supervisors of Contra Costa County
California Environmental Justice Alliance
Ms. Sherry McCoy
State Building and Construction Trades Council of California
Opposition
California Newspaper Publishers Association
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091