BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2891| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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: AB 2891 Page 2 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 AB 2891 Page 3 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 AB 2891 Page 4 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 AB 2891 Page 5 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 AB 2891 Page 6 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 AB 2891 Page 7 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 **** END ****