BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 275|
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THIRD READING
Bill No: AB 275
Author: Committee on Environmental Safety and Toxic Materials
AmendedAmended:7/13/15 in Senate
Vote: 21
SENATE ENVIRONMENTAL QUALITY COMMITTEE: 6-1, 6/17/15
AYES: Wieckowski, Bates, Hill, Jackson, Leno, Pavley
NOES: Gaines
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 63-5, 4/20/15 - See last page for vote
SUBJECT: Hazardous substances: liability recovery actions
SOURCE: Author
DIGEST: This bill revises the Department of Toxic Substances
Control's (DTSC) statute of limitations on cost recovery.
ANALYSIS:
Existing law:
1)Imposes, under the Carpenter-Presley-Tanner Hazardous
Substance Account Act (Act), 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 DTSC or a California
regional water quality control board (regional board), upon
the request of the DTSC or regional board.
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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
those actions.
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 all
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 DTSC or regional water quality control board
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.
4)Deletes reference to Health and Safety Code Section 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.
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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 [United
States Environmental Protection Agency] 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
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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 Legislation
In addition to this bill, the Assembly Committee on
Environmental Safety and Toxic Materials (ESTM) has introduced
the following bills to address the shortcomings found in the BSA
report:
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Page 5
1)AB 273 (ESTM, 2015) modifies provisions relating to DTSC's
authority to require corrective actions under hazardous waste
control laws.
2)AB 274 (ESTM, 2015) allows DTSC to not expend resources to
pursue an uncollectible account, as defined.
3)AB 276 (ESTM, 2015) allows DTSC to request financial
information from specified entities who claim inability to
pay.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified7/10/15)
California League of Conservation Voters
Environment California
Environmental Working Group
Natural Resources Defense Council
OPPOSITION: (Verified7/10/15)
None received
ASSEMBLY FLOOR: 63-5, 4/20/15
AYES: Alejo, Travis Allen, Bloom, Bonilla, Bonta, Brown, Burke,
Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,
Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer,
Lackey, Levine, Lopez, Low, Maienschein, Mathis, McCarty,
Medina, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark
Stone, Thurmond, Ting, Waldron, Weber, Wilk, Williams, Wood,
Atkins
NOES: Baker, Brough, Chávez, Harper, Wagner
NO VOTE RECORDED: Achadjian, Bigelow, Chang, Dahle, Gallagher,
Grove, Kim, Linder, Mayes, Melendez, Patterson, Steinorth
AB 275
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Prepared by:Rachel Machi Wagoner / E.Q. / (916) 651-4108
7/15/15 17:42:31
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