BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                              Senator Wieckowski, Chair
                                2015 - 2016  Regular 
           
          Bill No:            AB 2891
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          |Author:    |Committee on Environmental Safety and Toxic          |
          |           |Materials                                            |
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          |Version:   |5/25/2016              |Hearing      |6/15/2016       |
          |           |                       |Date:        |                |
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          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Rachel Machi Wagoner                                 |
          |           |                                                     |
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          SUBJECT:  Hazardous waste:  funding.

            ANALYSIS:
          
          Existing law:  
          
             1)   Establishes Comprehensive Environmental Response,  
               Compensation, and Liability Act (CERCLA) of 1980 to provide  
               a Federal "Superfund" to clean up uncontrolled or abandoned  
               hazardous waste sites as well as accidents, spills, and  
               other emergency releases of pollutants and contaminants  
               into the environment. 

             2)   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 U.S.C. Sec. 9604(c)(3)).  

             3)   Establishes the Toxic Substances Control Account (TSCA),  
               and allows the DTSC director to expend federal funds in the  
               TSCA consistent with the requirements specified in Section  
               114 of CERCLA and defines TSCA as the "State Account."  

             4)   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  







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               federal act.  

             5)   Authorizes use of funds from DTSC's State Account to  
               provide the state share of a removal or remedial action  
               pursuant to CERCLA if the site is the subject of a final  
               remedial action plan. 

             6)   Establishes, pursuant to the Johnston-Filante Hazardous  
               Substance Cleanup Bond Act of 1984, the Orphan Share  
               Reimbursement Trust Fund to pay specified costs and claims  
               relating to response actions at hazardous substance release  
               sites under circumstances in which the share of liability  
               for those costs is attributable to the activities of  
               persons who are defunct or insolvent. 

          This bill:  Revises the annual appropriation requirements for  
          funding federal hazardous waste cleanup requirements.   
          Specifically, this bill:  

             1)   Deletes legislative intent that not less than $6,750,000  
               be appropriated in the annual Budget Act each year to the  
               Site Remediation Account for direct site remediation costs  
               and replaces with intent to appropriate an amount  
               sufficient to cover the estimated costs identified by the  
               Department of Toxic Substances Control (DTSC). 



             2)   Requires DTSC, at the same time as the Governor's  
               January 10 Budget, and annually thereafter, to report to  
               the Legislative budget committees an estimate of the  
               funding needed to meet the state's obligation at federal  
               Superfund orphan sites and at state-only orphan sites.   
               Requires the estimate to include projected budget-year and  
               out-year costs for new and ongoing operations and  
               maintenance budget obligations at federal Superfund sites,  
               and new and ongoing remediation, and any other related  
               orphan site costs. 



             3)   Deletes a requirement that DTSC report to the  
               Legislature a determination that the state's obligation  
               under CERCLA will exceed $3,300,000 in any fiscal year.








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            Background
          
          1) Superfund.  The federal Comprehensive Environmental Response,  
             Compensation, and Liability Act (CERCLA), also known as  
             Superfund, was enacted to address the problem of remediating  
             abandoned hazardous waste sites.  Through CERCLA, the US  
             Environmental Protection Agency (US EPA) and California were  
             given power to seek out those parties responsible for any  
             hazardous waste release and recover costs from financially  
             viable individuals and companies once cleanup is completed.

             According to the Department of Toxic Substances Control  
             (DTSC), both the US EPA 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.  These are  
             known as National Priorities List (NPL) sites and State  
             orphan sites.

             The state's Site Remediation Account (SRA) funds DTSC's work  
             at sites on the NPL and at state orphan sites.  Sites on the  
             NPL, also known as the federal Superfund list, are the  
             nation's worst hazardous substances sites and pose a  
             significant threat to the environment and public health. 

             Under federal law, the state is required to provide at a  
             minimum a 10% match for design and implementation of  
             remediation, or cleanup. Ultimately, California is also  
             required to cover 100% of the long-term operation and  
             maintenance (O&M) for NPL sites where no viable responsible  
             party has been identified. State orphan sites are not on the  
             NPL, but also are contaminated by hazardous substances that  
             pose an environmental or public health threat; the  
             responsible parties for both types of sites are unknown or  
             are unwilling or unable to pay for cleanup. 

          2) The Legislative Analysts' Office (LAO) Report on California  
             Superfund Site Cost Obligations.  The Assembly Environmental  
             Safety & Toxic Materials Committee requested LAO to complete  
             a review of DTSC's federal requirements and cost share  
             obligations under CERCLA as it relates to Superfund cleanup;  
             the anticipated resource demand for Superfund site cleanup  








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             and the gap between resource need and resource availability;  
             and programmatic and/or policy changes that could be made at  
             DTSC to better manage the growing cleanup demand. 

             The LAO found that annual combined California costs for  
             remediation and O&M at federal NPL sites are projected to  
             range from $2.2 million to $17.3 million between Fiscal Years  
             2015-2016 and 2020-2021.  The funds in the SRA to support  
             these costs are projected to grow over this period from $10.6  
             million to $12 million.  Under federal regulation, California  
             is required to pay its share of the NPL site cleanup and O&M  
             first, which means state-designated orphan sites are second  
             priority. Given the estimated increases in future state costs  
             for NPL sites, California will have significantly less  
             available in the SRA for state orphan sites, and may end up  
             with no funds for state orphan site cleanup. 

            Comments
          
          Purpose of Bill.  According to the author, US EPA estimates  
          between 96,000 and 212,000 contaminated sites in California.  
          DTSC has identified approximately 9,800 contaminated sites  
          statewide. 

          The author states that DTSC's Independent Review Panel (IRP)  
          reported in its January 28, 2016, report that there are  
          projected shortfalls in DTSC's SRA for funding orphan and  
          Superfund site cleanup. The report states, "The DTSC currently  
          spends approximately $10 million per year from the SRA for both:  
          a) California's operations and maintenance oversight obligations  
          at federal Superfund NPL sites, and b) California orphan site  
          clean-ups where there is no responsible party to pay for  
          clean-up."

          According to the author, "the IRP is concerned that this $10  
          million annual allocation in the SRA is insufficient, since the  
          State's NPL obligations are projected to grow as more sites are  
          turned over to California to assume operations and maintenance  
          oversight obligations.  In fact, by Fiscal Year 2020-2021, there  
          is a concern that no SRA funds will be available for orphan  
          sites, even though those sites impact groundwater or release  
          toxic vapors from underground contamination into occupied  
          buildings."
            








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          The author states, "to address the projected demand on state  
          resources to meet the state's financial obligations at Superfund  
          and state-only orphan sites, the LAO recommends the Legislature  
          require DTSC to prepare an annual estimate of its funding  
          demand, and adopt legislation to move away from a statutory  
          funding formula to an annual appropriation as part of the state  
          budget process, among other recommendations.  AB 2891 would  
          codify those recommendations." 
            

          SOURCE:                    Assembly Committee on Environmental Safety  
                         and Toxic Materials  

           SUPPORT:               

          None received  

           OPPOSITION:    

          None received  


           
                                          
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