Amended in Assembly July 7, 2015

Amended in Senate June 2, 2015

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 6604, 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 the first person to file an application to partially remove an offshore oil structure to pay, in addition to other specified costs, the startup costs incurred by the department or the State Lands Commission to implement the act, including the costs to develop and adopt regulations, and requires the payment of startup costs to be reimbursed by the department, as specified. 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 act.

Before the first application to partially remove an offshore oil structure is filed, this bill would authorize a prospective applicant to pay a portion of the startup costs in an amount determined by the department to be necessary for staff and other costs in anticipation of receipt of the first application. The bill would require an applicant, upon conditional approval for partial removal of an offshore oil structure, to apportion and 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 the prescribed begin delete schedule. end delete begin insert schedule to the specified entities if certain criteria are satisfied. The bill would require the department to apportion the cost-savings funds received from the first application in accordance with the prescribed schedule based on when the application was submitted rather than when the cost savings are transmitted. 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, including startup costs, submitted to process the application that have not been expended as of the date of receipt of the notification of withdrawal. begin insert The bill would require the department to promptly return the cost savings end insert begin insert to the applicant if the partial removal of the offshore oil structure is not permitted by a court or governmental agency and the applicant is required to carry out full removal of the structure. end insert

(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 commission to serve as the lead agency for the environmental review under CEQA.

The bill would require the council, 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 Board, among other entities. 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.

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

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

SECTION 1.  

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 commission shall serve as the lead agency for the
environmental review of any project proposed pursuant to this
chapter.

SEC. 2.  

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 department, council, commission, 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 council, commission,
and conservancy in determining appropriate funding for activities
to be carried out by those agencies.

(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 or the
commission to implement this chapter, including the costs to
develop and adopt regulations pursuant to this chapter. Before the
first application is filed, a prospective applicant may elect to pay,
and the department may accept payment of, a portion of the startup
costs, in an amount determined by the department to be necessary
for staff and other costs in anticipation of receipt of the first
application. The payment of startup costs shall be reimbursed by
the department as provided in paragraph (3) of subdivision begin delete (c) end delete begin insert (e) end insert
of Section 6618.

(d) As soon as feasible after the applicant provides financial
assurances pursuant to subdivision (b), the lead agency 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 by the applicant under subdivisions
(b) and (c) that have not been expended as of the date of receipt
of notification of withdrawal.

SEC. 3.  

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

6613.  

(a) The council 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 council shall, upon receipt
of its initial application from the department pursuant to Section
6610, establish appropriate criteria, based on begin delete credible end delete begin insert the best
available end insert science, 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 council shall consult with
appropriate entities, including, but not limited to, the department,
the commission, the State Air Resources Board, the California
Coastal Commission, and the California Ocean Science Trust.

(4) The council 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 council 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 council 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.

(d) In making the determination pursuant to subdivision (c), the
council shall determine the appropriate begin delete weight end delete begin insert weight, based on
the best available science, end insert to be assigned to adverse impacts to air
quality or greenhouse gas emissions as compared to adverse
impacts to biological resources or water quality.

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

(f) The council 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.

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

(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.

SEC. 4.  

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

6614.  

(a) Upon certification of the appropriate environmental
documents, the commission 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 commission shall ensure that any cost savings are
accurately and reasonably calculated. The commission 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 commission 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 commission 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 commission’s determination of cost
savings and any other estimates of cost savings the commission
considered.

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

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

(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.

SEC. 5.  

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
application and environmental document pursuant to the California
Environmental Quality Act.

(c) Hold public hearings for comment on the application and
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.

SEC. 6.  

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.

SEC. 7.  

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)  begin delete Upon end delete begin insert Except as provided in subdivision (c), upon end insert 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 transmitted begin insert by the applicant to the
department end insert before January 1, 2017.

(2) Sixty-five percent, if transmitted begin insert by the applicant to the
department end insert on or after January 1, 2017, and before January 1,
2023.

(3) Eighty percent, if transmitted begin insert by the applicant to the
department end insert on or after January 1, 2023.

begin delete

(c) Of the total amount of the cost savings to be transmitted
pursuant to subdivision (b),

end delete begin insert

(c) Upon receipt of conditional approval pursuant to Section
6617, the applicant who files the first application to partially
remove an offshore oil structure shall apportion and directly
transmit a portion of the total amount of the cost savings resulting
from the first application to the department as follows:

end insert begin insert

(1) Fifty-five percent, if the application was submitted before
January 1, 2017.

end insert begin insert

(2) Sixty-five percent, if the application was submitted on or
after January 1, 2017, and before January 1, 2023.

end insert begin insert

(3) Eighty percent, if the application was submitted on or after
January 1, 2023.

end insert begin insert

(d) If the department’s final approval pursuant to Section 6619
or any other federal, state, or local permit or approval required
for the partial removal of the offshore oil structure is permanently
enjoined, vacated, invalidated, rejected, or rescinded by a court
or governmental agency as the result of litigation challenging the
permit or approval, and the applicant is required to carry out full
removal of the structure, the department shall promptly return the
cost savings to the applicant.

end insert

begin insert (e) end insert begin insert   end insert begin insert Upon final, nonappealable judicial decisions upholding the
department’s final approval pursuant to Section 6619 and all
permits and approvals required for the partial removal of the
offshore oil structure or the running of the statutes of limitations
applicable to all the permits and approvals, whichever is later, end insert
the department shall directly transmit the following amounts begin insert from
the total amount of the cost savings transmitted pursuant to
subdivision (b) or (c) end insert 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.