BILL ANALYSIS Ó
AB 275
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ASSEMBLY THIRD READING
AB
275 (Committee on Environmental Safety and Toxic Materials)
As Introduced February 11, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
|----------------+------+---------------------+---------------------|
|Environmental |4-0 |Alejo, Gonzalez, | |
|Safety | |McCarty, Ting | |
|----------------+------+---------------------+---------------------|
|Appropriations |11-0 |Gomez, Bonta, | |
| | |Calderon, Daly, | |
| | |Eggman, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Holden, Quirk, | |
| | |Rendon, Weber, Wood | |
| | | | |
| | | | |
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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
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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) Section 25356.6,
which was repealed by SB 1018 (Budget and Fiscal Review
Committee), Chapter 39, Statutes of 2012.
FISCAL
EFFECT: According to the Assembly Appropriations Committee, there
are potentially unknown increased revenues from cost recovery
resulting from the extended statute of limitations, and potential
unknown savings resulting from no longer requiring DTSC to pay any
portion of the judgment.
COMMENTS:1)
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.
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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 [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.
"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."
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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 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.
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.
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Analysis Prepared by:
Paige Brokaw / E.S. & T.M. / (916) 319-3965 FN:
0000158