BILL ANALYSIS Ó
AB 275
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
275 (Committee on Environmental Safety and Toxic Materials)
As Amended August 19, 2015
Majority vote
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|ASSEMBLY: | 63-5 | (April 20, |SENATE: |28-9 | (August 31, |
| | |2015) | | |2015) |
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Original Committee Reference: E.S. & T.M.
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
costs incurred by DTSC related to overseeing or carrying out a
response or corrective action to commence within three years
after completion of all response or corrective actions have
been certified by DTSC or a regional water quality control
board (regional board).
2)Requires action for cost recovery for operation and
maintenance (O&M) costs to commence within three years after
completion of O&M has been certified by DTSC or a regional
board.
3)States that the statutes of limitation in this section do not
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apply to a cost recovery action brought by a regional board
under the Water Code.
4)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.
5)Deletes reference to Health and Safety Code (H&S) Section
25356.6, which was repealed by SB 1019 (Budget and Fiscal
Review Committee), Chapter 30, Statutes of 2012.
The Senate amendments:
1)Revise the timeframe for the recovery of costs incurred by
DTSC related to overseeing or carrying out a response or
corrective action from six years of the initiation of a
removal or remedial action to within three years after
completion of all response or corrective actions have been
certified by DTSC or a regional board.
2)Authorize DTSC to pursue cost recovery for O&M costs
associated with response or corrective actions and require
cost recovery to be commenced within three years after DTSC
has certified the O&M.
3)State that the statutes of limitation in Section 25360.4 do
not apply to a cost recovery action brought by a regional
board under the Water Code.
4)Make technical changes to remove unnecessary terms, and
conform terminology used in H&S Chapters 6.5 and 6.8.
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EXISTING LAW:
1)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 Section 25360.4)
2)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 Section 25363)
3)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 United States Code
(U.S.C.) Section 9604(c)(3)). (H&S Section 25301)
4)Establishes the TSCA (H&S Section 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. Section 9614) (H&S
Section 25173.6(d)), and defines the Toxic Substances Control
Account as the "State Account." (H&S Section 25324)
5)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.
Section 9614(c)). (H&S Section 25337)
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FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
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 [United States] EPA
[Environmental Protection Agency] and DTSC have identified sites
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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 [Fiscal Year] 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 this 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 the responsible party(ies),
under federal law, is 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
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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.
Analysis Prepared by:
Paige Brokaw / E.S. & T.M. / (916) 319-3965 FN:
0001484