BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                        SB 295|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |

                                UNFINISHED BUSINESS 

          Bill No:  SB 295
          Author:   Jackson (D), et al.
          Amended:  8/19/15  
          Vote:     21  


           ASSEMBLY FLOOR:  73-1, 9/1/15 - See last page for vote

           SUBJECT:   Pipeline safety: inspections

          SOURCE:    Author

          DIGEST:   This bill requires the State Fire Marshall (SFM), or  
          an officer or employee authorized by the SFM, beginning on  
          January 1, 2017, to annually inspect all intrastate pipelines  
          and operators of intrastate pipelines under the jurisdiction of  
          the SFM and requires the SFM to adopt regulations implementing  
          this provision by that date. 

          Assembly Amendments delete the Senate version of the bill that  
          dealt with the College Access Tax Credit Fund and instead  
          requires the SFM, or an officer or employee authorized by the  
          SFM, beginning on January 1, 2017, to annually inspect all  
          intrastate pipelines and operators of intrastate pipelines under  
          the jurisdiction of the SFM and would require the SFM to adopt  
          regulations implementing this provision by that date.

          Existing law:

          1)Specifies, under the Elder California Pipeline Safety Act of  
            1981 (Act), that the SFM exercises safety regulatory  


                                                                     SB 295  
                                                                    Page  2

            jurisdiction over intrastate pipelines used for the  
            transportation of hazardous or highly volatile liquid  

          2)Authorizes the SFM to exercise safety regulatory jurisdiction  
            over portions of interstate pipelines located within the state  
            and subject to an agreement between the United States  
            Secretary of Transportation and the SFM.

          3)Authorizes the SFM to enter, inspect, and examine, at  
            reasonable times and in a reasonable manner, the records and  
            properties of any pipeline operators that are required to be  
            inspected and examined to determine whether the pipeline  
            operator is in compliance with the Act. 

          This bill:

          1)Requires the SFM, or an officer or employee authorized by the  
            SFM, beginning on January 1, 2017, to annually inspect all  
            intrastate pipelines and operators of intrastate pipelines  
            under the jurisdiction of the SFM to ensure compliance with  
            applicable laws and regulations.

          2)Requires the SFM, by January 1, 2017, to adopt regulations  
            implementing the provisions of this bill.

          3)Specifies that for portions of interstate pipelines that are  
            not under the jurisdiction of the SFM, the SFM shall not  
            become an inspection agent for those pipelines unless all  
            regulatory and enforcement authority over those pipelines is  
            transferred to the SFM from the federal Pipeline and Hazardous  
            Material Safety Administration. 

          4)Requires the SMF to revise fees to a level sufficient to cover  
            the costs of the annual inspections.

          Purpose of the bill.  According to the author, "on May 19 of  
          this year tragedy struck again when an onshore pipeline carrying  
          crude oil ruptured and spilled over 100,000 gallons of oil, over  
          20,000 gallons of which ended up in the ocean off the Santa  


                                                                     SB 295  
                                                                    Page  3

          Barbara coastline.  To date this spill has caused significant  
          negative impacts to the ocean, local beaches, wildlife, and the  
          local economy.  The pipeline that ruptured, line 901, was being  
          inspected every other year.  If line 901 had been inspected  
          annually the corrosion would likely have been detected before it  
          ruptured and this disaster would have been avoided."

          Refugio Oil Spill.  The Refugio oil spill occurred on May 19,  
          2015, just north of the Refugio State Beach in Santa Barbara  
          County, California.  The spill came from a ruptured pipeline  
          owned by Plains All American Pipeline.  The final tally found  
          $142,800 U.S. gallons leaked from the pipeline.  The immediate  
          oil spill area stretched over nine miles of California  
          coastline, and tar balls have washed up as far as one hundred  
          miles from the spill site. 

          On May 20, 2015, Governor Brown issued an emergency proclamation  
          for Santa Barbara County due to the effects of the oil spill.   
          Refugio State Beach and El Capitan State Beach were closed for  
          over a month because of the oil spill.  About 100 live birds and  
          mammals were rescued and expected to be returned to the wild.   
          Another 260 dead birds and mammals were found in the spill area.  
           However, the full impact will never be known since animals may  
          travel a long distance before succumbing to their injuries. 

          The Office of the SFM's Pipeline Safety Division.  The SFM  
          regulates the safety of approximately 5,500 miles of intrastate  
          hazardous liquid transportation pipelines and acts as an agent  
          of the federal Office of Pipeline Safety concerning the  
          inspection of more than 2,000 miles of interstate pipelines.   
          Pipeline Safety staff inspect, test, and investigate to ensure  
          compliance with all federal and state pipeline safety laws and  
          regulations.  Hazardous liquid pipelines are also periodically  
          tested for integrity using procedures approved by the SFM. The  
          program has been certified by the federal government since 1981.  

          Prior/Related Legislation
          AB 2201 (Bradford, Chapter 481, Statutes of 2012) raised the  
          civil penalties associated with violations of the Act.   
          Specifically, it raises the civil penalties for each day that a  


                                                                     SB 295  
                                                                    Page  4

          violation of the Act persists from $10,000 to $200,000, and  
          raises the civil penalties for any related series of violations  
          of the Act from $500,000 to $2 million.

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No

          According to the Assembly Appropriations Committee:

          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 increase 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.  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. 

          SUPPORT:   (Verified9/2/15)

          Asian Pacific Environmental Network
          Audubon California
          California Coastal Commission
          California Coastal Protection Network
          California League of Conversation Voters
          California Professional Firefighters


                                                                     SB 295  
                                                                    Page  5

          Center for Biological Diversity
          Clean Water Action
          Defenders of Wildlife
          Environment California
          Environmental Action Committee of West Marin
          Environmental Defense Center
          Environmental Working Group
          Heal the Bay
          National Parks Conservation Association
          Natural Resources Defense Council
          Santa Barbara Channelkeeper
          Santa Barbara County Board of Supervisors
          Surfrider Foundation
          Surfrider Foundation Santa Barbara Chapter
          Surfrider Foundation South Bay Chapter
          Venoco, Inc.

          OPPOSITION:   (Verified8/31/15)

          None received

          ARGUMENTS IN SUPPORT:     Supporters of the bill argued that SB  
          295 helps reduce the risk of another catastrophic oil spill to  
          our sensitive coast and ocean environment by required the SFM to  
          annually inspect all intrastate pipeline  operators.  In  
          addition, supporters argue that this bill increases the  
          frequency of hydrostatic pipeline testing, and it requires the  
          SFM to increase the fees assessed on pipeline operators to pay  
          for the increased inspections. 

           ASSEMBLY FLOOR:  73-1, 9/1/15
           AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,  
            Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau,  
            Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly,  
            Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto,  
            Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Roger  
            Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,  
            Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes,  


                                                                     SB 295  
                                                                    Page  6

            McCarty, Medina, Melendez, Mullin, Nazarian, O'Donnell, Olsen,  
            Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas,  
            Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner,  
            Weber, Wilk, Williams, Wood, Atkins
           NOES: Gallagher
           NO VOTE RECORDED: Brough, Beth Gaines, Harper, Obernolte,  
            Patterson, Waldron

          Prepared by:Felipe Lopez / G.O. / (916) 651-1530
          9/2/15 10:21:14

                                   ****  END  ****