BILL ANALYSIS Ó
AB 275
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Date of Hearing: March 24, 2015
ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS
Alejo, Chair
AB
275 (Committee on Environmental Safety and Toxic Materials) - As
Introduced February 11, 2015
SUBJECT: Hazardous substances: liability recovery actions.
SUMMARY: Revises the California Department of Toxic Substances
Control's (DTSC) statute of limitations on cost recovery.
Specifically, this bill:
1)Revises the state's statute of limitations on the recovery of
the costs of removal or remedial actions to allow DTSC to
recover costs within three years after the completion of a
removal or remedial action has been certified by DTSC or
within six years of the initiation of a removal or remedial
process action, whichever date is later;
2)Deletes the requirement that the Toxic Substances Control
Account (TSCA) shall pay any portion of the judgment in excess
of the aggregate amount of costs or expenditures apportioned
to responsible parties; and
3)Deletes reference to Health & Safety Code (H&S) § 25356.6,
which was repealed by Chapter 39 of Statutes of 2012 (Senate
Bill 1018).
EXISTING LAW:
1)Establishes DTSC to protect California against threats to
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public health and degradation to the environment and to
restore properties degraded by past environmental
contamination, and requires DTSC to regulate management of
hazardous wastes, clean up existing contamination, and prevent
pollution by working with businesses to reduce their hazardous
waste and use of toxic materials. (H&S § 25360.1, et seq.)
2)Requires DTSC to commence recovery of the costs of removal or
remedial action or related administrative costs within three
years after completion of the removal or remedial action has
been certified by the department. (H&S § 25360.4)
3)Requires any party found liable for any costs or expenditures
recoverable, who establishes by a preponderance of the
evidence that only a portion of those costs or expenditures
are attributable to that party's actions, shall be required to
pay only for that portion. (H&S § 25363)
4)Pursuant to the Carpenter-Presley-Tanner Hazardous Substance
Account Act, makes available adequate funds in order to permit
the State of California to assure payment of its
10% share of the costs mandated under federal Superfund
requirements, Section 104(c)(3) of
the federal act (42 U.S.C. Sec. 9604(c)(3)). (H&S § 25301)
5)Establishes the TSCA (H&S Sec. 25173.6), allows the DTSC
director to expend federal funds in the TSCA consistent with
the requirements specified in Section 114 of the federal
Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA) of 1980 (42 U.S.C. Sec. 9614) (H&S §
25173.6(d)), and defines the Toxic Substances Control Account
as the "State Account." (H&S § 25324)
6)Establishes the Site Remediation Account (SRA), to be funded
by money transferred from the TSCA, and may be expended by
DTSC for direct site remediation costs consistent with the
requirements of Section 114(c) of the federal act (42 U.S.C.
Sec. 9614(c)). (H&S § 25337)
7)Establishes CERCLA. (42 U.S.C. § 9601 et seq.)
FISCAL EFFECT: Unknown.
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COMMENTS:
State Audit Report : On August 7, 2014, the Bureau of State
Audits (BSA) released a report on DTSC's cost recovery. The BSA
found that long-standing shortcomings with DTSC's recovery of
costs have resulted in millions of dollars in unbilled and
billed but uncollected cleanup costs dating back to 1987.
DTSC may not be able to recover all of its outstanding costs due
to several factors, including when the federal and state
statutes of limitations for cost recovery have expired on
projects. DTSC's preliminary determinations indicated that the
statute of limitations had expired for 76 projects with a total
of $13.4 million in outstanding costs, which DTSC may not
recover.
According to the BSA, "under federal law, an initial action to
recover costs from responsible parties must commence within
three years of completing removal activities, or within six
years of beginning the implementation of remedial activities.
Similarly, state law requires the initiation of a cost recovery
action within three years of [DTSC] certifying the completion of
a cleanup activity. According to a [DTSC] attorney, for the
purposes of recovering costs, [DTSC] can file an action against
a responsible party under federal law, state law, or upon a
provision in a contract. Therefore, she explained, if the
statute of limitations has expired for one, [DTSC] may still
pursue cost recovery under the other two if they have not
expired."
Orphan funding : According to DTSC, "Both US EPA and DTSC have
identified sites which represent an immediate threat to public
health and environment and/or for which no viable responsible
parties have been identified to address these projects. US
EPA's list is referred to as the Federal Superfund List and the
DTSC's list is referred to as the State Orphan's list.
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"Annually, DTSC's budget contains a line item that covers
cleanup activities for both Federal Superfund match and State
Orphan sites. For FY 12/13 roughly $9.2 million was allocated.
Each year the amount increases slightly. Federal regulations
require that the State must provide a 10% match for the
construction of final remedy and initial operation and
maintenance costs. After a specific time period, then the State
must assumed 100% of the costs to operate that system. This
same funding allocation covers the State Orphan sites as well.
"It is anticipated that within the next 2-3 years, the amount of
money needed to cover our Federal Superfund match obligations
and State's orphan funding needs will be more than what is
currently appropriated annually."
Need for the bill : Under state law, the state's TSCA is
required to pay any portion of the judgment in excess of the
amount of the apportioned costs to responsible parties. That
means DTSC's general fund, which is used for cleanup, is then
used to partially cover costs that responsible party(ies), under
federal law, are compelled to pay. When cost recovery is
pursued in state court, it puts the burden on TSCA to help fund
the judgment, which puts taxpayers on the hook to partially fund
the cleanup and creates an unnecessary cost burden on the
state's already underfunded accounts for toxic waste site
cleanup.
The requirement that taxpayer dollars support cleanup costs is
inconsistent with federal law. Under CERCLA, there is no federal
taxpayer funding required or available to support the judgment.
Therefore, DTSC currently pursues many, perhaps most of its cost
recovery cases through federal court under CERCLA.
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Though DTSC tends to pursue cost recovery under CERCLA more
often, the state's statute of limitations would be more
desirable to use to pursue cost recovery if the state's
responsibility to pay were eliminated.
With these changes to the state's statute of limitations, DTSC
will be more apt to pursue cases through state court under state
law. While many cases will likely continue to be pursued under
CERCLA, having more flexibility to seek cost recovery through
state court will allow the department to pursue more cases more
expeditiously and have a greater success rate recovering its
costs before statutes of limitations expire.
REGISTERED SUPPORT / OPPOSITION:
Support
Natural Resources Defense Council
Opposition
None on file.
Analysis Prepared
by: Paige Brokaw / E.S. & T.M. / (916) 319-3965
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