BILL ANALYSIS Ó
AB 275
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Date of Hearing: April 15, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
275 (Committee on Environmental Safety) - As Introduced February
11, 2015
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Urgency: No State Mandated Local Program: NoReimbursable:
SUMMARY:
This bill adds to the Department of Toxic Substance Control's
(DTSC) existing statute of limitation on cost recovery of three
years after a certified completion of removal or remedial action
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to also include a time period of within six years of the
initiation of the removal or remediation process, whichever date
is later.
This bill also deletes the requirement for DTSC to pay any
portion of the judgment in excess of the costs or expenditures
apportioned to the responsible parties.
FISCAL EFFECT:
1)Potential unknown increased revenues from cost recovery
resulting from the extended statute of limitations (Toxic
Substance Control Account).
2)Potential unknown savings resulting from no longer requiring
DTSC to pay any portion of the judgment.
COMMENTS:
1)Purpose. According to the author, DTSC may not be able to
recover all of its outstanding costs due to several factors
including when state and federal statutes of limitations
expire. According to DTSC, the statute of limitations has
expired for 76 projects totaling $13.4 million in
unrecoverable outstanding costs. This bill extends the
statute of limitations consistent with federal law.
2)Background. On August 7, 2014, the Bureau of State Audits
(BSA) released a report on DTSC's cost recovery. The BSA
found long-standing shortcomings resulting in millions of
dollars in unbilled and uncollected cleanup costs dating back
to 1987.
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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 certifying the
completion of a cleanup activity. 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, if the statute of
limitations has expired for one, DTSC may still pursue cost
recovery under the other two if they have not also expired.
U nder existing law, DTSC is required to pay any portion of the
judgment in excess of the amount apportioned to responsible
parties from its Toxic Substance Control Account (TSCA).
Under the federal Comprehensive Environmental Response,
Compensation and Liability Act (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.
Under this bill, DTSC will be more likely 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
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allow the department to pursue more cases more expeditiously
and have a greater success rate recovering its costs before
statutes of limitations expire.
3)Related Legislation. In addition to this bill, the Committee
on Environmental Safety and Toxic Materials has introduced the
following bills to address the shortcomings found in the BSA
report:
a) AB 273 (ESTM) modifies provisions relating to DTSC's
authority to require corrective actions under hazardous
waste control laws.
b) AB 274 (ESTM) allows DTSC to not expend resources to
pursue an uncollectible account, as defined.
c) AB 276 (ESTM) allows DTSC to request financial
information from specified entities who claim inability to
pay.
All four bills will be heard in this Committee on April 15,
2015
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081
AB 275
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