Amended in Senate April 21, 2015

Amended in Senate March 19, 2015

Senate Bill No. 233

Introduced by Senator Hertzberg

(Coauthor: Assembly Member Rendon)

February 13, 2015

An act to amend Sections begin delete 6603, end delete 6604, begin delete 6610, 6611, end delete 6612, 6613, 6614, 6615, 6616, and 6618 of the Fish and Game Code, relating to ocean resources.

LEGISLATIVE COUNSEL’S DIGEST

SB 233, as amended, Hertzberg. Marine resources and preservation.

(1) The California Marine Resources Legacy Act establishes a program, administered by the Department of Fish and Wildlife, to allow partial removal of offshore oil structures. The act authorizes the department to approve the partial removal of offshore oil structures, if specified criteria are satisfied. The act requires an applicant, upon conditional approval for removal, to apportion a percentage of the cost-savings funds in accordance with a prescribed schedule to specified entities and funds. The act defines “cost savings” to mean the difference between the estimated cost to the applicant of complete removal of an oil platform, as required by state and federal leases, and the estimated costs to the applicant of partial removal of the oil platform pursuant to the begin delete act, and specifically provides for the inclusion of certain costs in cost savings. end delete begin insert act. end insert

The bill would require an applicant, upon conditional approval for partial removal of an offshore oil structure, to begin insert apportion and end insert transmit a portion of the cost savings to the department, instead of to the specified entities and funds. The bill would require the department to apportion those cost-savings funds received from the applicant in accordance with a prescribed begin delete schedule based on the date the application was submitted to the department. end delete begin insert schedule. end insert The bill would authorize the applicant to withdraw the application at any time before final approval and would require the department to return specified funds submitted to process the application that have not been expended as of the date of receipt of the notification of withdrawal.

(2) Existing law requires the Natural Resources Agency to serve as the lead agency for the environmental review under the California Environmental Quality Act (CEQA) of a proposed project to partially remove an offshore oil structure pursuant to the California Marine Resources Legacy Act. Upon certification of environmental documents pursuant to CEQA, the California Marine Resources Legacy Act requires the State Lands Commission to determine the cost savings of partial removal compared to full removal of the structure and requires the Ocean Protection Council to determine whether partial removal provides a net environmental benefit to the marine environment compared to the full removal of the structure.

This bill would instead require the begin delete department end delete begin insert commission end insert to serve as the lead agency for the environmental review under begin delete CEQA, to determine the cost savings of partial removal compared to full removal of the structure, and to determine whether partial removal provides a net environmental benefit to the marine environment compared to the full removal of the structure. end delete begin insert CEQA. end insert

The bill would require the begin delete department, end delete begin insert council, end insert in determining whether partial removal of the structure would provide a net benefit to the marine environment compared to full removal of the structure, to take certain adverse impacts to air quality and greenhouse gas emissions into account and to consult with the State Air Resources begin delete Board and the Ocean Protection Council, end delete begin insert Board, end insert among other entities. begin insert In making that determination, the bill would require the council to determine the appropriate weight to be assigned to adverse impacts to air quality and greenhouse gas emissions as compared to adverse impacts to biological resources and water quality. end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

begin delete

SECTION 1.  

Section 6603 of the Fish and Game Code is
amended to read:

6603.  

(a) This chapter establishes a program through which
an applicant may voluntarily apply to the department to carry out
partial removal of the structure.

(b) The program established pursuant to this chapter shall be
deemed consistent with, and part of, the California Artificial Reef
Program pursuant to Article 2 (commencing with Section 6420)
of Chapter 5 for purposes of compliance with federal law including
the National Fishing Enhancement Act of 1984.

(c) The department shall serve as the primary authority for
carrying out the program, including review and approval of
applications to partially remove an offshore oil structure in state
or federal waters and management and operation of
decommissioned offshore oil structures in state or federal waters
approved pursuant to this chapter.

(d) Final approval of an application shall not be granted until
the applicant complies with all requirements of the chapter,
including the payment of all costs to the state to review and approve
the proposed project as required by subdivision (b) of Section 6612
and the transmittal of the required portion of cost savings to the
endowment and other parties as required by Section 6618.

(e) The department may obtain funds for the planning,
development, maintenance, and operation of an offshore oil
structure transferred to the department pursuant to this chapter and
may accept gifts, subventions, grants, rebates, reimbursements,
and subsidies from any lawful source.

(f) The department may adopt regulations to implement this
chapter.

end delete

begin delete SEC. 2. end delete
begin insert SECTION 1. end insert   

Section 6604 of the Fish and Game Code is
amended to read:

6604.  

(a) A proposed project to partially remove an offshore
oil structure pursuant to this chapter is a project as defined in
subdivision (c) of Section 21065 of the Public Resources Code
and is therefore subject to the California Environmental Quality
Act (Division 13 (commencing with Section 21000) of the Public
Resources Code) and shall be reviewed pursuant to the time limits
established in Section 21100.2 of the Public Resources Code.

(b) The begin delete department end delete begin insert commission end insert shall serve as the lead agency
for the environmental review of any project proposed pursuant to
this chapter.

begin delete

SEC. 3.  

Section 6610 of the Fish and Game Code is amended
to read:

6610.  

(a) An owner or operator, or other party responsible for
decommissioning, of an offshore oil structure may apply to the
department for approval to partially remove the structure pursuant
to the requirements of this chapter.

(b) The department shall design and make available to potential
applicants an application process that will facilitate review of the
application by the department in a timely manner, consistent with
Section 6604.

(c) Upon receipt of an application pursuant to this section, the
department shall transmit a copy of the application to the
endowment.

SEC. 4.  

Section 6611 of the Fish and Game Code is amended
to read:

6611.  

(a) The application for partial removal shall include, at
a minimum, all of the following:

(1) The applicant’s plan and schedule for partial removal of the
offshore oil structure, including removal of any portion of the
structure as appropriate to maintain navigational safety.

(2) A determination of the estimated cost of partial removal and
the estimated cost of full removal.

(3) A determination of the environmental impacts and benefits
to the marine environment from partial removal and full removal
of the structure.

(4) Identification of all permits, leases, and approvals required
by any governmental agency, including a permit issued by the
United States Army Corps of Engineers if required for offshore
oil structures, and a lease issued by the commission if the proposed
project involves state tidelands and submerged lands, and a
proposed schedule for the applicant or the state to receive those
permits, leases, and approvals.

(b) The department may require the applicant to submit a
management plan for the structure following partial removal,
including maintenance in a manner consistent with navigational
safety, enforcement, and monitoring.

(c) The information submitted pursuant to subdivisions (a) and
(b) shall be used by the department for advisory purposes only.
Final determinations regarding the partial removal and management
of the offshore oil structure, net benefit to the marine environment
from partial removal, and cost savings from partial removal shall
be made solely by the department, as specified in this chapter,
based on its independent review and judgment.

end delete

begin delete SEC. 5. end delete
begin insert SEC. 2. end insert   

Section 6612 of the Fish and Game Code is amended
to read:

6612.  

(a) Upon receipt of an application to partially remove
an offshore oil structure pursuant to this chapter, the department
shall determine whether the application is complete and includes
all information needed by the department.

(b) (1) Upon a determination that the application is complete,
the applicant shall provide surety bonds executed by an admitted
surety insurer, irrevocable letters of credit, trust funds, or other
forms of financial assurances, determined by the department to be
available and adequate, to ensure that the applicant will provide
sufficient funds to the begin delete department end delete begin insert department, council, commission, end insert
and conservancy to carry out all required activities pursuant to this
article, including all of the following:

(A) Environmental review of the proposed project pursuant to
Section 6604.

(B) A determination of net environmental benefit pursuant to
Section 6613.

(C) A determination of cost savings pursuant to Section 6614.

(D) Preparation of a management plan for the structure pursuant
to Section 6615.

(E) Implementation of the management plan and ongoing
maintenance of the structure after the department takes title
pursuant to Section 6620.

(F) Development of an advisory spending plan pursuant to
Section 6621.

(G) Other activities undertaken to meet the requirements of this
article, including the costs of reviewing applications for
completeness, and reviewing, approving, and permitting the
proposed project, which includes the costs of determining whether
the project meets the requirements of all applicable laws and
regulations and the costs of environmental assessment and review.

(2) The department shall consult with the begin insert council, commission,
and end insert conservancy in determining appropriate funding for activities
to be carried out by begin delete the conservancy. end delete begin insert those agencies. end insert

(3) The funds provided pursuant to paragraph (1) shall not be
considered in the calculation of cost savings pursuant to Section
6614 or the apportionment of cost savings pursuant to Section
6618.

(c) The first person to file an application on and after January
1, 2011, to partially remove an offshore oil structure pursuant to
this chapter, shall pay, in addition to all costs identified under
subdivision (b), the startup costs incurred by the department begin insert or
the commission end insert to implement this chapter, including the costs to
develop and adopt regulations pursuant to this chapter. This
payment of startup costs shall be reimbursed by the department as
provided in paragraph (3) of subdivision (c) of Section 6618.

(d) As soon as feasible after the applicant provides financial
assurances pursuant to subdivision (b), the begin delete department end delete begin insert lead agency end insert
shall begin the environmental review of the proposed project as
required pursuant to Section 6604.

(e) The applicant may withdraw the application at any time
before final approval. Upon notification that the applicant has
withdrawn the application, the department shall return to the
applicant any funds provided under subdivisions (b) and (c) that
have not been expended as of the date of receipt of notification of
withdrawal.

begin delete SEC. 6. end delete
begin insert SEC. 3. end insert   

Section 6613 of the Fish and Game Code is amended
to read:

6613.  

(a) The begin delete department end delete begin insert council end insert shall determine whether the
partial removal of an offshore oil structure pursuant to this chapter
provides a net benefit to the marine environment compared to the
full removal of the structure.

(b) As a necessary prerequisite to determining net environmental
benefit as required in subdivision (a), the begin delete department end delete begin insert council end insert shall,
upon receipt of its initial application begin insert from the department end insert pursuant
to Section 6610, establish appropriate begin delete criteria end delete begin insert criteria, based on
credible science, end insert for evaluating the net environmental benefit of
full removal and partial removal of offshore oil structures.

(1) The criteria shall include, but are not limited to, the depth
of the partially removed structure in relation to its value as habitat
and the location of the structure, including its proximity to other
reefs, both natural and artificial.

(2) The criteria shall not include any consideration of the funds
to be generated by the partial removal of the structure.

(3) In determining the criteria, the begin delete department end delete begin insert council end insert shall
consult with appropriate entities, including, but not limited to, the
begin delete council, end delete begin insert department, end insert the commission, the State Air Resources
Board, the California Coastal Commission, and the California
Ocean Science Trust.

(4) The begin delete department end delete begin insert council end insert shall establish the criteria in time
to use them in making its initial determination of net environmental
benefit pursuant to this section.

(c) Upon certification of environmental documents pursuant to
the California Environmental Quality Act, the begin delete department end delete begin insert council end insert
shall, based on the criteria developed pursuant to subdivision (b)
and other relevant information, determine whether partial removal
of the structure would provide a net benefit to the marine
environment compared to full removal of the structure. In making
the determination, the begin delete department end delete begin insert council end insert shall, at a minimum,
take into account the following:

(1) The contribution of the proposed structure to protection and
productivity of fish and other marine life.

(2) Any adverse impacts to biological resources or water quality,
air quality or greenhouse gas emissions, or any other marine
environmental impacts, from the full removal of the facility that
would be avoided by partial removal as proposed in the application.

(3) Any adverse impacts to biological resources or water quality,
air quality or greenhouse gas emissions, or any other marine
environmental impacts, from partial removal of the structure as
proposed in the application.

(4) Any benefits to the marine environment that would result
from the full removal of the structure or from partial removal as
proposed in the application.

(5) Any identified management requirements and restrictions
of the partially removed structure, including, but not limited to,
restrictions on fishing or other activities at the site.

begin insert

(d) In making the determination pursuant to subdivision (c), the
council shall determine the appropriate weight to be assigned to
adverse impacts to air quality or greenhouse gas emissions as
compared to adverse impacts to biological resources or water
quality.

end insert begin delete

(d)

end delete

begin insert ( end insert begin insert e) end insert  Benefits resulting from the contribution of cost savings to
the endowment shall not be considered in the determination of net
environmental benefit.

begin delete

(e)

end delete

begin insert ( end insert begin insert f) end insert  The begin delete department end delete begin insert council end insert may contract or enter into a
memorandum of understanding with any other appropriate
governmental or nongovernmental entity to assist in its
determination of net environmental benefit.

begin delete

(f)

end delete

begin insert ( end insert begin insert g) end insert  The determination made pursuant to this section begin insert and
submitted to the department by the council end insert shall constitute the final
determination and shall not be revised except by the begin delete department. end delete
begin insert council. end insert

begin insert

(h) The council shall take all feasible steps to complete its
determination in a timely manner that accommodates the
department’s schedule for consideration of the application.

end insert

begin delete SEC. 7. end delete
begin insert SEC. 4. end insert   

Section 6614 of the Fish and Game Code is amended
to read:

6614.  

(a) Upon certification of the appropriate environmental
documents, the begin delete department end delete begin insert commission end insert shall determine, or cause
to be determined, the cost savings that will result from the partial
removal of an offshore oil structure as proposed in the application
compared to full removal of the structure.

(b) The begin delete department end delete begin insert commission end insert shall ensure that any cost
savings are accurately and reasonably calculated. The begin delete department end delete
begin insert commission end insert may contract or enter into a memorandum of
understanding with any other appropriate governmental agency or
other party, including an independent expert, to ensure that cost
savings are accurately and reasonably calculated.

(c) The begin delete department end delete begin insert commission end insert shall consider any estimates of
cost savings made by any governmental agency, including, but not
limited to, the Internal Revenue Service, the Franchise Tax Board,
and the United States Department of the Interior. The begin delete department end delete
begin insert commission end insert shall include in its determination a written explanation,
which shall be available to the public, of the differences, and the
reasons for the differences, between the begin delete department’s end delete begin insert commission’s end insert
determination of cost savings and any other estimates of cost
savings the begin delete department end delete begin insert commission end insert considered.

(d) The applicant shall provide all necessary documentation, as
determined by the begin delete department, end delete begin insert commission, end insert to allow the begin delete department end delete
begin insert commission end insert to calculate the amount of cost savings. Failure to
provide information requested by the begin delete department end delete begin insert commission end insert in
a timely manner may result in rejection of the application.

(e) The determination made pursuant to this section begin insert and
submitted to the department by the commission end insert shall constitute the
final determination and shall not be revised except by the
begin delete department. end delete begin insert commission. end insert

begin insert

(f) The commission shall take all feasible steps to complete its
determination in a timely manner that accommodates the
department’s schedule for consideration of the application.

end insert

begin delete SEC. 8. end delete
begin insert SEC. 5. end insert   

Section 6615 of the Fish and Game Code is amended
to read:

6615.  

Prior to granting conditional approval of an application
for partial removal of an offshore oil structure, the department
shall do all of the following:

(a) Prepare a plan to manage the offshore oil structure after its
partial removal. The plan shall include measures to manage fishery
and marine life resources at and around the structure in a manner
that will ensure that the net benefits to the marine environment
identified pursuant to Section 6613 are maintained or enhanced.
Consistent with state and federal law, management measures may
include a buffer zone in which fishing or removal of marine life
is restricted or prohibited.

(b) Provide an opportunity for public comment on the
begin insert application and end insert environmental document pursuant to the California
Environmental Quality Act.

(c) Hold begin delete a end delete public begin delete hearing end delete begin insert hearings end insert for comment on the
begin insert application and end insert environmental document pursuant to the California
Environmental Quality Act in the county nearest to the location
of the offshore oil structure that is the subject of the application.

begin delete SEC. 9. end delete
begin insert SEC. 6. end insert   

Section 6616 of the Fish and Game Code is amended
to read:

6616.  

The department may grant conditional approval of an
application for partial removal of an offshore oil structure only if
all of the following criteria are satisfied:

(a) The partial removal of the offshore oil structure and the
planning, development, maintenance, and operation of the structure
would be consistent with all applicable state, federal, and
international laws, including, but not limited to, all of the
following:

(1) The federal Magnuson-Stevens Fishery Conservation and
Management Act (16 U.S.C. Sec. 1801 et seq.).

(2) The federal National Fishing Enhancement Act of 1984 (33
U.S.C. Sec. 2101 et seq.).

(3) The federal Coastal Zone Management Act (16 U.S.C. Sec.
1451 et seq.).

(4) The California Coastal Management Program.

(5) The Marine Life Management Act (Part 1.7 (commencing
with Section 7050)).

(6) The Marine Life Protection Act (Chapter 10.5 (commencing
with Section 2850) of Division 3).

(7) State and federal water quality laws.

(8) Navigational safety laws.

(b) The partial removal of the offshore oil structure provides a
net benefit to the marine environment compared to full removal
of the structure, as determined pursuant to Section 6613.

(c) The cost savings that would result from the conversion of
the offshore oil platform or production facility have been
determined pursuant to Section 6614.

(d) The applicant has provided sufficient funds consistent with
subdivision (b) of Section 6612.

(e) The department and the applicant have entered into a
contractual agreement whereby the applicant will provide sufficient
funds for overall management of the structure by the department,
including, but not limited to, ongoing management, operations,
maintenance, monitoring, and enforcement as these relate to the
structure.

(f) The department has entered into an indemnification
agreement with the applicant that indemnifies the state and the
department, to the extent permitted by law, against any and all
liability that may result, including, but not limited to, active
negligence, and including defending the state and the department
against any claims against the state for any actions the state
undertakes pursuant to this article. The agreement may be in the
form of an insurance policy, cash settlement, or other mechanism
as determined by the department. In adopting indemnification
requirements for the agreement, the department shall ensure that
the state can defend itself against any liability claims against the
state for any actions the state undertakes pursuant to this article
and pay any resulting judgments. The department shall consult
with and, as necessary, use the resources of the office of the
Attorney General in preparing and entering into the indemnification
agreement.

(g) The applicant has applied for and received all required
permits, leases, and approvals issued by any governmental agency,
including, but not limited to, a lease issued by the commission if
the proposed project involves state tidelands and submerged lands.
For structures located in federal waters, all of the following
requirements shall be met:

(1) The department and the owner or operator of the structure
reach an agreement providing for the department to take title to
the platform or facility as provided in Section 6620.

(2) The department acquires the permit issued by the United
States Army Corps of Engineers.

(3) The partial removal of the structure is approved by the
Bureau of Safety and Environmental Enforcement of the United
States Department of the Interior.

begin delete SEC. 10. end delete
begin insert SEC. 7. end insert   

Section 6618 of the Fish and Game Code is amended
to read:

6618.  

(a) The cost savings from the partial removal of an
offshore oil structure, as determined pursuant to Section 6614,
shall be apportioned and transmitted as described in this section.

(b) Upon receipt of conditional approval pursuant to Section
6617, the applicant shall apportion and directly transmit a portion
of the total amount of the cost savings to the department as follows:

(1) Fifty-five percent, if begin delete the application was submitted end delete
begin insert transmitted end insert before January 1, begin delete 2023. end delete begin insert ____. end insert

(2) Sixty-five percent, if begin delete the application was submitted end delete
begin insert transmitted end insert on or after January 1, begin delete 2023, end delete begin insert ____, end insert and before January
1, begin delete 2028. end delete begin insert ____. end insert

(3) Eighty percent, if begin delete the application was submitted end delete begin insert transmitted end insert
on or after January 1, begin delete 2028. end delete begin insert ____. end insert

(c) Of the total amount of the cost savings to be transmitted
pursuant to subdivision (b), the department shall directly transmit
the following amounts to the following entities:

(1) Eighty-five percent shall be deposited into the California
Endowment for Marine Preservation established pursuant to
Division 37 (commencing with Section 71500) of the Public
Resources Code.

(2) Ten percent shall be deposited into the General Fund.

(3) Two percent shall be deposited into the Fish and Game
Preservation Fund for expenditure, upon appropriation by the
Legislature, by the department to pay any costs imposed by this
chapter that are not otherwise provided for pursuant to subdivision
(b) of Section 6612 and subdivision (e) of Section 6616. Any
moneys remaining in the Fish and Game Preservation Fund, after
providing for these costs, shall be used, upon appropriation by the
Legislature, first to reimburse the payment of the startup costs
described in subdivision (c) of Section 6612, and thereafter to
conserve, protect, restore, and enhance the coastal and marine
resources of the state consistent with the mission of the department.

(4) Two percent shall be deposited into the Coastal Act Services
Fund, established pursuant to Section 30620.1 of the Public
Resources Code, and shall be allocated to support state agency
work involving research, planning, and regulatory review
associated with the application and enforcement of coastal
management policies in state and federal waters pursuant to state
and federal quasi-judicial authority over offshore oil and gas
development.

(5) One percent shall be deposited with the board of supervisors
of the county immediately adjacent to the location of the facility
prior to its decommissioning. The amount paid to the county shall
be managed pursuant to paragraph (1) of subdivision (d) of Section
6817 of the Public Resources Code.