BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 2891 (Committee on Environmental Safety and Toxic Materials) - Hazardous waste: funding ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: May 25, 2016 |Policy Vote: E.Q. 7 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 1, 2016 |Consultant: Narisha Bonakdar | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 2891 revises the annual appropriation requirements for funding federal hazardous waste cleanup requirements. Fiscal Impact: Cost pressures in the millions of dollars to appropriate funds necessary to meet demonstrated need. (See staff comments) 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 AB 2891 (Committee on Environmental Safety and Toxic Materials) Page 1 of ? an immediate threat to public health and the 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, respectively. 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 a match of at least 10% for design and implementation of remediation, or cleanup. Ultimately, California is also required to cover 100% of the long-term operation and maintenance 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. The Legislative Analysts' Office Report on California Superfund Site Cost Obligations. At the request of the Assembly Environmental Safety & Toxic Materials Committee, the Legislative Analyst Office (LAO) reviewed DTSC's cost share obligations under CERCLA; the gap between anticipated resource demand and availability for Superfund site cleanup; 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 operations and maintenance 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 operations and maintenance before using funds for state-designated orphan sites. Given the estimated lack of resources and requirement that the state prioritize NPL sites for funding, California may end up with no funds for state orphan site cleanup. Proposed Law: AB 2891 (Committee on Environmental Safety and Toxic Materials) Page 2 of ? This bill: 1.Revises the annual appropriation requirements for funding federal hazardous waste cleanup requirements. 2.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 DTSC. 3.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. 4.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. 5.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. Staff 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 AB 2891 (Committee on Environmental Safety and Toxic Materials) Page 3 of ? 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." 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." Staff notes that this bill changes DTSC current "funding formula" for SRA allocation to cleanup NPL and state orphan sites. That is, the current statutory floor and ceiling will be removed and instead replaced with an annual report outlining DTSC's estimated costs that must be considered throughout the annual budget process. While no requirement for funding or specific appropriation is made in this bill. It is likely intended to ensure sufficient funds are appropriated for site cleanup. -- END --