BILL ANALYSIS Ó AB 276 Page 1 Date of Hearing: April 15, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 276 (Environmental Safety and Toxic Materials) - As Amended March 17, 2015 ----------------------------------------------------------------- |Policy |Environmental Safety and Toxic |Vote:|6 - 0 | |Committee: |Materials | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: No SUMMARY: This bill authorizes the Department of Toxic Substance Control (DTSC), or local officer or agency, to request financial AB 276 Page 2 information from any person that is managing hazardous waste, including those applying for permits. Specifically, this bill: 1)Authorizes DTSC to issue an order directing compliance with a request for information if a person intentionally or negligently fails to provide requested information. 2)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). 3)Requires any person providing the specified information to DTSC to identify all of the information that is considered a trade secret and imposes penalties for failure to comply with the measures protecting information. 4)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. 5)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 to disclose the information consistent with Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). 6)Authorizes DTSC to impose penalties if a person intentionally or negligently fails to furnish the required information or makes false statements or representations. FISCAL EFFECT: AB 276 Page 3 1)Ongoing increased costs to DTSC (Toxic Substance Control Account) in the $200,000 per year range for the increased workload associated with requesting, processing, and collecting financial information. 2)Potential unknown revenue increases and cost savings (Toxic Substance Control Account) achieved from increased collections and avoided litigation. COMMENTS: 1)Rationale. Existing law authorizes DTSC to ask certain parties for information related to hazardous waste, but does not allow DTSC to request information about the party's finances. Financial information would 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. Currently, DTSC must sue parties to obtain the relevant financial information. The authority provided in this bill will expedite the cost recovery process by obviating the need for costly litigation and increasing DTSC's ability to recover costs effectively. 2)Background. 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 report determined DTSC was limited in its ability to recover costs effectively because it lacks the authority to AB 276 Page 4 require a potentially responsible party to provide information related to the financial ability to pay cleanup costs. According to the Auditor, the ability to require this type of information will better inform decision making about whether to file cost recovery actions by differentiating between parties capable of paying for cleanup costs and others. This bill is consistent with the Auditor's recommendation. 3)CERCLA. Under CERCLA, the US EPA has authority to request financial information from potentially responsible parties. The US EPA typically uses a tiered approach when 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, and market appraisals. 4)Related Legislation. Related 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 274 (ESTM) allows DTSC to not expend resources to pursue an uncollectible account, as defined. b) AB 274 (ESTM) allows DTSC to not expend resources to pursue an uncollectible account, as defined. AB 276 Page 5 c) AB 275 (ESTM) revises DTSC's statute of limitation for cost recovery. All four bills will be heard in this Committee on April 15, 2015 Analysis Prepared by:Jennifer Galehouse / APPR. / (916) 319-2081