BILL ANALYSIS Ó SB 295 Page 1 Date of Hearing: August 26, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair SB 295 (Jackson) - As Amended August 19, 2015 ----------------------------------------------------------------- |Policy |Rules |Vote:|10 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | |Environmental Safety and Toxic | |6 - 1 | | |Materials | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | |Governmental Organization | |18 - 0 | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill beginning January 1, 2017, requires the State Fire Marshal to annually inspect all intrastate pipelines and pipeline operators under its jurisdiction to ensure compliance SB 295 Page 2 with applicable laws and regulations. Additionally, this bill: 1) Requires the State Fire Marshal to adopt regulations for annual inspections by January 1, 2017. 2) Prohibits the State Fire Marshal from becoming an inspection agent for interstate pipelines unless the federal Pipeline and Hazardous Materials Safety Administration transfers regulatory and enforcement authority to the State Fire Marshal. 3) Requires the State Fire Marshal to revise fees to a level sufficient to cover the costs of the annual inspections. FISCAL EFFECT: 1)One-time costs of approximately $3.3 million (special fund) to establish regulations and administer the inspection program in the first year. 2)Ongoing annual costs of approximately $2.4 million (special fund) to administer the inspection program. 3)Unknown potential increases in fees charged to pipeline operators and independent hydrostatic testing firms. The current fee schedule for pipeline operations is $6,000 per pipeline operator and $550 per mile of pipeline operated for intrastate pipelines. There is also a fee on the registration of the independent hydrostatic testing firms. SB 295 Page 3 Fee revenues have not been raised since 2007. The special fund into which these fees are placed had a significant fund balance of $8.8 million at the end of 2014-15. COMMENTS: 1)Purpose. According to the author, oil pipeline owners should be required to ensure their pipelines operate safely and meet applicable laws and regulations. According to proponents, this bill will protect Californians against a repeat of the May 2015 Refugio oil spill where an onshore pipeline carrying crude oil ruptured and spilled over 100,000 gallons of oil. The pipeline that ruptured was being inspected biennially. By providing an annual inspection schedule, any pipeline corrosion will be detected earlier, thus preventing future ruptures. SB 295 Page 4 2)Background. The Lempert-Keene-Seastrand Oil Spill Prevention and Response Act (Act) requires the Governor to establish a state oil spill contingency plan and establishes oil spill prevention, response, containment, and cleanup programs. Under the Act, the Oil Spill Administrator promulgates regulations that provide for the best achievable protection of waters and natural resources of the state. This bill revises the Act to provide further inspection and financial responsibility. Analysis Prepared by:Jennifer Galehouse / APPR. / (916) 319-2081