BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       AB 2891|
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                                   THIRD READING 


          Bill No:  AB 2891
          Author:   Committee on Environmental Safety and Toxic Materials   
                     
          Amended:  8/19/16 in Senate
          Vote:     21 

           SENATE ENVIRONMENTAL QUALITY COMMITTEE:  7-0, 6/15/16
           AYES:  Wieckowski, Gaines, Bates, Hill, Jackson, Leno, Pavley

           SENATE APPROPRIATIONS COMMITTEE:  5-2, 8/11/16
           AYES:  Lara, Beall, Hill, McGuire, Mendoza
           NOES:  Bates, Nielsen

           ASSEMBLY FLOOR:  79-0, 5/5/16 (Consent) - See last page for  
            vote

           SUBJECT:   Hazardous waste:  funding


          SOURCE:    Author
          
          DIGEST:   This bill revises and updates the annual appropriation  
          requirements for funding federal hazardous waste cleanup  
          requirements.  


          Senate Floor Amendments of 8/19/16 specify that that amount not  
          be less than $10,750,000 and make other technical changes.


          ANALYSIS:  


          Existing law:  









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          1)Establishes the 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)Makes, pursuant to the Carpenter-Presley-Tanner Hazardous  
            Substance Account Act, 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 Department of Toxic Substances Control's (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 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  








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            are defunct or insolvent. 


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


          1)Amends the legislative intent in statute to state that not  
            less than $10,750,000 be appropriated in the annual Budget Act  
            each year to the SRA for direct site remediation costs and  
            replaces with intent to appropriate an amount sufficient to  
            cover the estimated costs identified by 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. And replaces with an  
            expression of intent of the Legislature that those rates are  
            intended to provide sufficient revenue to fund appropriations  
            in any given fiscal year to fund the state's obligation under  
            the Federal Superfund Act.


          Background


          1)Superfund.  CERCLA, also known as Superfund, was enacted to  








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            address the problem of remediating abandoned hazardous waste  
            sites.  Through CERCLA, the U.S. 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 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 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 and 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 and  
            the gap between resource need and resource availability; and  








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            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  








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          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." 




          FISCAL EFFECT:   Appropriation:    No         Fiscal  
          Com.:YesLocal:   No


          According to the Senate Appropriations Committee, this bill has  
          cost pressures in the millions of dollars to appropriate funds  
          necessary to meet demonstrated need. 




          SUPPORT:   (Verified8/11/16)


          None received


          OPPOSITION:   (Verified8/11/16)


          None received

          ASSEMBLY FLOOR:  79-0, 5/5/16








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          AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  
            Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,  
            Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier,  
            Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,  
            Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger  
            Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,  
            Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes,  
            McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,  
            O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,  
            Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,  
            Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
          NO VOTE RECORDED:  Beth Gaines

          Prepared by:Rachel Machi Wagoner / E.Q. / (916) 651-4108
          8/22/16 23:10:21


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