BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Wieckowski, Chair
2015 - 2016 Regular
Bill No: AB 275
-----------------------------------------------------------------
|Author: |Committee on Environmental Safety and Toxic |
| |Materials |
-----------------------------------------------------------------
|-----------+-----------------------+-------------+----------------|
|Version: |5/27/2015 |Hearing |6/17/2015 |
| | |Date: | |
|-----------+-----------------------+-------------+----------------|
|Urgency: |No |Fiscal: |Yes |
------------------------------------------------------------------
-----------------------------------------------------------------
|Consultant:|Rachel Machi Wagoner |
| | |
-----------------------------------------------------------------
SUBJECT: Hazardous substances: liability recovery actions
ANALYSIS:
Existing law:
1) Under the Carpenter-Presley-Tanner Hazardous Substance
Account Act, imposes liability for hazardous substances
removal or remedial actions and requires the Attorney General
to recover from the liable person, as defined, certain costs
incurred by the Department of Toxic Substances Control (DTSC)
or a California regional water quality control board
(regional board), upon the request of DTSC or regional board.
2) Authorizes, except as specified, a party found liable for any
costs or expenditures recoverable under the act for those
actions to establish, as specified, that only a portion of
those costs or expenditures are attributable to the party,
and requires the party to pay only for that portion. If each
party does not establish its liability, the act requires a
court to apportion those costs or expenditures, as specified,
among the defendants and the remaining portion of the
judgment is required to be paid from the Toxic Substances
Control Account (TSCA).
3) Authorizes the money deposited in the TSCA in the General
Fund to be appropriated to the DTSC for specified purposes,
including the payment of the costs incurred by the state for
AB 275 (Committee on Environmental Safety and Toxic Materials)
Page 2 of ?
those actions.
This bill:
Revises the DTSC's statute of limitations on cost recovery.
Specifically:
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;
2)Requires that if operation and maintenance is required as part
of the corrective action, the cost recovery action shall be
commenced by the department within three years of
certification of operation and maintenance.
3)Deletes the requirement that the TSCA shall pay any portion of
the judgment in excess of the aggregate amount of costs or
expenditures apportioned to responsible parties; and
4)Deletes reference to Health & Safety Code §25356.6, which was
repealed by SB 1018 (Budget and Fiscal Review Committee,
Chapter 39, Statutes of 2012).
Background
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.
AB 275 (Committee on Environmental Safety and Toxic Materials)
Page 3 of ?
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."
2) 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
AB 275 (Committee on Environmental Safety and Toxic Materials)
Page 4 of ?
obligations and State's orphan funding needs will be more
than what is currently appropriated annually."
Comments
Purpose of Bill. According to the author, "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 author states that "the requirement that taxpayer dollars
support cleanup costs is inconsistent with federal law. Under
the 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."
The author further states that 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."
Related/Prior 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
AB 275 (Committee on Environmental Safety and Toxic Materials)
Page 5 of ?
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.
SOURCE: Committee on Environmental Safety and Toxic Materials
SUPPORT:
California League of Conservation Voters
Environment California
Environmental Working Group
Natural Resources Defense Council
OPPOSITION:
None received
-- END --