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 PRIOR VOTES NOT RELEVANT 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. ANALYSIS: 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 substances. 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. Background 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 Azul 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. Wildcoast 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 ****