BILL ANALYSIS                                                                                                                                                                                                    ”



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          SENATE THIRD READING


          SB  
          295 (Jackson)


          As Amended  August 19, 2015


          Majority vote


          SENATE VOTE:  38-0


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Environmental   |6-1  |Alejo, Dahle,         |Gallagher           |
          |Safety          |     |Gonzalez, Gray,       |                    |
          |                |     |McCarty, Ting         |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Governmental    |18-0 |Gray, Linder, Alejo,  |Gallagher           |
          |Organization    |     |Bigelow, Campos,      |                    |
          |                |     |Cooley, Cooper, Daly, |                    |
          |                |     |Cristina Garcia,      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |Eduardo Garcia,       |                    |
          |                |     |Gipson,               |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |Roger HernŠndez,      |                    |
          |                |     |Levine, Mayes, Perea, |                    |








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          |                |     |Salas, Steinorth,     |                    |
          |                |     |Wilk                  |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |16-1 |Gomez, Bigelow,       |Gallagher           |
          |                |     |Bloom, Bonta,         |                    |
          |                |     |Calderon, Chang,      |                    |
          |                |     |Nazarian, Eggman,     |                    |
          |                |     |Eduardo Garcia,       |                    |
          |                |     |Holden, Jones, Quirk, |                    |
          |                |     |Rendon, Wagner,       |                    |
          |                |     |Weber, Wood           |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
           ------------------------------------------------------------------ 


          SUMMARY:  Expands the State Fire Marshal's responsibilities for  
          regulating intrastate pipelines safety.  Specifically, this  
          bill:   


             1)   Requires, commencing January 1, 2017, the State Fire  
               Marshal, or an officer or employee authorized by the State  
               Fire Marshal, to annually inspect all intrastate pipelines  
               and operators of intrastate pipelines under the  
               jurisdiction of the State Fire Marshal to ensure compliance  
               with applicable laws and regulations.
             2)   Requires, by January 1, 2017, the State Fire Marshal, to  
               adopt regulations. 


             3)   Prohibits the State Fire Marshal from becoming an  
               inspection agent for the portions of intrastate pipelines  
               that are not under the jurisdiction of the State Fire  
               Marshal unless all regulatory and enforcement authority  
               over those pipelines is transferred to the State Fire  
               Marshal from the federal Pipeline and Hazardous Materials  
               Safety Administration (PHMSA). 








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             4)   Requires the State Fire Marshal to revise the fee  
               assessed to a level sufficient to cover the costs  
               associated with implementation.


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, this bill may result in one-time costs of  
          approximately $3.3 million to establish regulations and  
          administer the inspection program in the first year; ongoing  
          annual costs of approximately $2.4 million to administer the  
          inspection program; and unknown potential increases in fees  
          charged to pipeline operators and independent hydrostatic  
          testing firms.


          


          COMMENTS:  


          Need for this bill: According to the author, "On May 19 of this  
          year tragedy struck when an onshore pipeline carrying crude oil  
          ruptured and spilled more than 100,000 gallons of oil, more than  
          20,000 gallons of which ended up in the ocean off the Santa  
          Barbara Coastline.  To date, this spill has caused significant  
          negative impacts to the ocean, local beaches, wildlife, and the  
          local economy.  Although the investigation into the response and  
          the oil spill is ongoing, we do know that corrosion was  
          responsible for the rupture. Before the spill, the last  
          completed inspection was in 2013.  The pipeline was again  
          inspected in 2015, but at the time of the accident the results  
          of the inspection had not been analyzed. 


          "The pipeline that ruptured - Line 901 - was being inspected  
          every other year. If Line 901 had been inspected annually the  








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          corrosion would likely have been detected before it ruptured and  
          this disaster would have been avoided. Because Line 901 is  
          federally regulated, SB 295 addresses these shortcomings by  
          directing the State Fire Marshall to seek the authority to  
          inspect federally regulated pipelines and to inspect all  
          pipelines annually.


          "Most importantly, oil pipeline owners should be financially  
          responsible to ensure their pipelines operate safely and meet  
          applicable laws and regulations, not taxpayers, which is why SB  
          295 requires fee increases on pipeline owners to pay for more  
          inspections."


          Refugio oil spill: On May 20, 2015, Governor Brown issued an  
          emergency proclamation for Santa Barbara County due to the  
          effects of the oil spill described by the author.  Refugio State  
          Beach and El Capitan State Beach have been closed for more than  
          a month because of the oil spill.  Fisheries from Canada de  
          Algeria to Coal Oil Point remain closed, which has negatively  
          impacted several commercial fisheries - including lobster, crab,  
          shrimp, halibut, urchin, squid, whelk, and sea cucumber.  The  
          Oiled Wildlife Care Network has recovered 192 dead birds and 103  
          dead marine mammals from the spill to date.  Dead marine mammals  
          recovered include dolphins, sea lions and seals.  Sensitive  
          habitat of the California least tern and the snowy plover, birds  
          protected by the Endangered Species Act, has been damaged.  
          Hotels, tour outfits and other tourism businesses have  
          experienced cancelations and decreased bookings due to the  
          spill.  More than 1,000 workers from local, state and federal  
          agencies have been working to clean up the beaches.  Since May  
          20, approximately 14,267 gallons of oily water have been  
          recovered. 


          On May 21, 2015, PHMSA issued a Correct Action Order to require  
          Plans All American Pipeline, the owner of the ruptured pipeline,  
          to take certain corrective actions to protect the public,  








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          property, and the environment from potential hazards associated  
          with Line 901 in Santa Barbara County.  The Correct Action Order  
          also found that Line 901 was a 24-inch diameter line that was  
          installed in 1987 and the section that ruptured had extensive  
          corrosion.  The deepest metal loss at each area ranged between  
          54% to 74% of the original pipeline wall thickness.  The failure  
          site wall thickness had degraded to an estimate one-sixteenth of  
          an inch. 


          Intrastate vs. Interstate Pipelines:  The United States  
          Department of Transportation PHMSA has exclusive federal  
          authority over interstate pipeline facilities (49 United States  
          Code Section 60101, et seq.).  Interstate pipeline is defined as  
          a pipeline or that part of a pipeline that is used in the  
          transportation of hazardous liquid or carbon dioxide in  
          interstate or foreign commerce.  Typically, these lines cross  
          state borders, of begin in federal waters.  Also, A Federal  
          Energy Regulatory Commission (FERC) filing by the operator can  
          be the determining factor.  The two pipelines in Santa Barbara  
          County have a FERC filing.



          Office of the State Fire Marshal has safety regulatory and  
          enforcement authority over intrastate hazardous liquid pipelines  
          pursuant to the Elder California Pipeline Safety Act of 1981  
          (Government Code Section 51010, et seq.).  Intrastate pipeline  
          is defined as means a pipeline or that part of a pipeline to  
          which this part applies that is not an interstate pipeline.   
          Those pipelines are located entirely within state borders  
          including offshore state waters.



          Analysis Prepared by:                                             
                          Paige Brokaw / E.S. & T.M. / (916) 319-3965  FN:  
          0001642









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