BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 276


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          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  








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            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  








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            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:  









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           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  








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          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:









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          Support




          Natural Resources Defense Council


          Opposition


          None on file.


          Analysis Prepared by:Paige Brokaw / E.S. & T.M. / (916) 319-3965