BILL ANALYSIS Ó AB 276 Page 1 Date of Hearing: March 24, 2015 ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS Luis Alejo, Chair AB 276 (Committee on Environmental Safety and Toxic Materials) - As Amended March 17, 2015 SUBJECT: Department of Toxic Substances Control: response actions: cleanup ability information SUMMARY: Authorizes the California Department of Toxic Substances Control (DTSC) to request financial information from specifies entities. Specifically, this bill: 1)Requires any person that is managing or has managed hazardous waste, including those that have applied for a permit, to provide information to DTSC regarding the ability of those persons to pay for or perform a cleanup; 2)Authorizes DTSC to issue an order directing compliance with a request for information if a person intentionally or negligently fails to provide requested information; 3)Authorizes DTSC to disclose the information under certain circumstances to authorized representatives, contractors, or government agencies, including the United States Environmental Protection Agency (US EPA); 4)Requires any person providing the specified information to DTSC to identify all of the information that is considered a AB 276 Page 2 trade secret and imposes penalties for failure to comply with the measures protecting information; 5)Allows DTSC to request information related to the ability of a person to pay for or perform a cleanup when there is a reasonable basis to believe there has been or may be a release or threatened release of a hazardous substance; 6)Authorizes DTSC to require a person who has or may have information or documents relevant to the ability of a responsible party or liable person to pay for or perform a cleanup, consistent with Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA); 7)Authorizes DTSC to impose penalties if a person intentionally or negligently fails to furnish the required information or makes false statements or representations; 8)Finds and declares that the need to protect the competitiveness of entities paying for or performing cleanups outweighs the interest in public disclosure of financial information; and 9)Provides that there will be no reimbursement by the state for any costs incurred by a local agency. EXISTING LAW: 1)Establishes DTSC to protect California against threats to public health and degradation to the environment and to restore properties degraded by past environmental contamination, and requires DTSC to regulate management of hazardous wastes, clean up existing contamination, and prevent AB 276 Page 3 pollution by working with businesses to reduce their hazardous waste and use of toxic materials. (Health & Safety Code (H&S) § 25360.1, et seq.) 2)Authorizes DTSC to incur direct cleanup costs and oversight costs (response costs) in remediating contaminated properties. (H&S § 25360, et seq.) 3)Authorizes DTSC to recover those costs from responsible parties. (H&S § 25360) 4)Permits DTSC or any local officer or agency authorized to enforce the Hazardous Waste Control Law to require specified parties to furnish and transmit certain information relating to hazardous substances, hazardous wastes, and hazardous materials. (H&S § 25185.6) 5)Pursuant to the Carpenter-Presley-Tanner Hazardous Substance Account Act, authorizes DTSC to require any potentially responsible party, or any person who has, or may have acquired certain information relating to hazardous substances and hazardous substance release sites in the course of a commercial, ownership, or contractual relationship with a potentially responsible party to furnish that information. (H&S § 25358.1) 6)Authorizes the US EPA to request information relating to the ability to pay for or to perform a cleanup. (42 U.S.C. § 9604) FISCAL EFFECT: Unknown. COMMENTS: AB 276 Page 4 Need for the bill : Under existing state law, DTSC may ask certain parties for information related to hazardous waste, but cannot request information about the party's finances that could demonstrate the party's ability to pay for or perform cleanup. This lack of authority is inconsistent with federal law, which permits the US EPA to request financial information from potential responsible parties. Having the authority to compel parties to submit pertinent financial information would allow DTSC to identify those potentially responsible parties who genuinely lack the ability to pay for cleanup and no longer require DTSC to first sue these parties to obtain the relevant financial information. This authority could expedite the cost recovery process by obviating the need for costly litigation to obtain the necessary financial information, thus increasing DTSC's ability to recover costs effectively. 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. The BSA found that as of March 2014, DTSC's spreadsheet for tracking projects with outstanding costs shows that it has 1,661 projects totaling almost $194 million in outstanding costs, of which nearly $142 million was unbilled and almost $52 million was billed but uncollected. These outstanding costs were incurred between July 1987 and December 2013. According to the State Auditor : "[DTSC] is also limited in its ability to recover costs effectively because it lacks the authority to require a potentially responsible party to provide AB 276 Page 5 information related to the financial ability to pay cleanup costs. Unlike the U.S. Environmental Protection Agency, [DTSC] does not have the authority to require that potentially responsible parties provide financial information when searching for responsible parties. Instead, [DTSC] can only request potentially responsible parties to provide financial information voluntarily. Having the authority to compel parties to submit pertinent financial information would allow [DTSC] to identify those potentially responsible parties who genuinely lack the ability to pay for cleanup and no longer require [DTSC] to first sue these parties to obtain financial information... The ability to require this type of information could better inform the [DTSC's] decision making about whether to file cost recovery actions because it could better differentiate between parties capable of paying for cleanup costs, thus increasing the department's ability to recover costs effectively." What information does the U.S. EPA ask for? : Under CERCLA, the US EPA has authority to request financial information from potentially responsible parties. The US EPA typically uses a tiered approach to invoking this authority; first, the US EPA will ask a party if it has the ability to pay or perform a cleanup. If the party does have that ability, then the US EPA typically does not ask for further information. If the party indicates it cannot pay or perform a cleanup, then the US EPA will request information supporting that claim, including, but not limited to, bank statements, financial statements, proposed budgets, market appraisals, etc. As this bill proposes to model this authority for DTSC verbatim after the US EPA's existing authority under CERCLA, any party affected by this legislation is already or can be covered under existing federal law. REGISTERED SUPPORT / OPPOSITION: AB 276 Page 6 Support Natural Resources Defense Council Opposition None on file. Analysis Prepared by:Paige Brokaw / E.S. & T.M. / (916) 319-3965