BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2891


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          CONCURRENCE IN SENATE AMENDMENTS
          AB  
          2891 (Committee on Environmental Safety and Toxic Materials)


          As Amended  August 19, 2016


          Majority vote


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          |ASSEMBLY:  |79-0  |(May 05, 2016) |SENATE: |26-13 |(August 23,      |
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                 (vote not relevant)


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          |COMMITTEE VOTE: | 5-0 | (August 25,    |RECOMMENDATION:   |concur     |
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          (E.S. & T.M.) 




          Original Committee Reference:  E.S. & T.M.


          SUMMARY:  Eliminates statutory formulas that inform how much the  
          annual Budget Act appropriates to the Department of Toxic  








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          Substances Control (DTSC) for federal Superfund site and  
          state-only orphan site cleanup and operations and maintenance  
          (O&M) costs.  Requires DTSC to estimate the funding needed to  
          meet the state's obligation at those sites for cleanup and O&M  
          and revises the state's statutory intent to provide funding  
          suitable to meet the state's financial obligation under federal  
          law.


          The Senate amendments delete the Assembly version of the bill,  
          and instead:


          1)Delete legislative intent that not less than $6,750,000 be  
            appropriated in the annual Budget Act each year to the Site  
            Remediation Account (SRA) for direct site remediation costs,  
            and replace it with intent to appropriate an amount sufficient  
            to cover the estimated costs identified by DTSC that is not  
            less than $10.75 million. 
          2)Require DTSC, at the same time as the Governor's January 10  
            Budget, and annually thereafter, to report to the Legislature  
            an estimate of the funding needed to meet the state's  
            obligation at federal Superfund orphan sites and at state-only  
            orphan sites.  Require the estimate to include projected  
            budget-year and two 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)Delete a requirement that DTSC report to the Legislature a  
            determination that the state's obligation under the federal  
            Comprehensive Environmental Response, Compensation, and  
            Liability Act (CERCLA) will exceed $3,300,000 in any fiscal  
            year (FY).


          AS PASSED BY THE ASSEMBLY, this bill authorized the Department  
          of Resources, Recycling and Recovery to consult with the State  
          Water Resources Control Board and when preparing guidelines and  
          state policy to guide the efforts of local agencies when  
          providing household hazardous waste collection, recycling, and  








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          disposal programs.  


          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, enactment of this bill could result in cost pressures  
          in the millions of dollars to appropriate funds necessary to  
          meet demonstrated need.





          COMMENTS:  


          Funding Superfund cleanup:  CERCLA, also known as Superfund, was  
          enacted to address the problem of remediating abandoned  
          hazardous waste sites.  Through CERCLA, the United States  
          Environmental Protection Agency (US EPA) and California were  
          given power to seek out those parties responsible for any  
          hazardous waste release and recovery costs from financially  
          viable individuals and companies.


          According to DTSC, both the US EPA and DTSC have identified  
          sites which represent 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-only 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 federal Superfund sites.  Ultimately,  
          California is also required to cover 100% of the long-term O&M  
          costs for NPL sites where no viable responsible party has been  
          identified.  State-only 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  








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          for both types of sites are unknown or are unwilling or unable  
          to pay for cleanup. 


          The US EPA estimates that there are between 96,000 and 212,000  
          contaminated sites in California.  DTSC has a database of  
          approximately 9,800 known contaminated sites statewide. 


          Short on funding:  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.  


          DTSC has estimated the demand for funding for state-only orphan  
          sites to be between $15 million to $20 million annually in FY  
          2015-16 through FY 2020-21.  However, based on US EPA's  
          estimates of the state's increasing financial obligations for  
          NPL sites beginning in federal FY 2016-17, the state will have  
          significantly less available for state-only orphan sites in  
          future years. 


          With today's funding levels, the state's share of remedial phase  
          and O&M costs at NPL orphan sites takes priority over state-only  
          orphan site funding.  Funding for state-only orphan sites is  
          generally available only to the extent that there are funds  
          available in the SRA after meeting federal obligations, and the  
          state is not obligated to pay any state-only orphan site costs  
          that exceed the available funding.  In some years, this means  
          that federal orphan sites can "crowd out" state-only orphan  
          sites for the limited amount of SRA funds.


          The unfortunate reality is that when DTSC doesn't have enough  
          funding to address all Superfund and state-identified orphan  
          site cleanup, some sites get lower priority, therefore leaving  
          communities to live with the contamination for years on end. 


          Legislative Analyst's Office (LAO):  The Assembly Environmental  








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          Safety & Toxic Materials Committee requested the 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,  
          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. 


          To address the projected demand for increased state spending 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.  This bill would  
          codify those recommendations while maintaining a statutory  
          minimum of $10.75 million to reflect current inflation and the  
          current appropriation to DTSC, which is $10.5 million. 


          Senate amendments:  This bill was substantially amended in the  
          Senate and the Assembly-approved version of this bill was  
          deleted.  This bill, as amended in the Senate, is inconsistent  
          with Assembly actions and the provisions of this bill, as  
          amended in the Senate, have not been heard in an Assembly policy  
          committee. 









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          Analysis Prepared by:                                             
                          Paige Brokaw/ E.S. & T.M. / (916) 319-3965  FN:   
          0004947