BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 438 (Hill) - Earthquake safety: statewide earthquake early warning program and system ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: August 1, 2016 |Policy Vote: T. & H. 11 - 0, | | | JUD. 7 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 25, 2016 |Consultant: Mark McKenzie | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. However, it was referred to the Committee pursuant to Senate Rule 29.10 (d), which only provides the option to (1) hold the bill, or (2) return the bill as approved by the Committee to the Senate floor for consideration of the bill as amended in the Assembly. Bill Summary: SB 438 would establish the California Earthquake Early Warning Advisory Board (Advisory Board) and the California Earthquake Early Warning Program (EEW Program) within the Office of Emergency Services (OES), and require OES and the Advisory Board to develop and submit a business plan for the EEW Program to the Legislature by February 1, 2018, as specified. The bill would also delete funding restrictions and conditions that must be met before OES can take actions to establish a statewide earthquake early warning system (EEWS), including an existing prohibition against using the General Fund for that purpose, as well as a deadline to identify funds by a July 1, 2016 sunset date. SB 438 (Hill) Page 1 of ? Fiscal Impact: Initial estimated capital costs of approximately $28 million (General Fund) to establish the EEWS, according to a recent EEWS Project Implementation Framework report (see staff comments). The General Fund impacts could be partially mitigated to the extent funds are identified for EEWS purposes from other state, local, federal, or private sources. Staff notes that the 2016-17 Budget includes a one-time General Fund appropriation of $6.875 million for capital funding for EEWS purposes. Ongoing annual administrative costs of approximately $17 million (General Fund) beginning in 2017-18 to operate and maintain an EEWS, according to the Project Implementation Framework report (see staff comments). The General Fund impacts could be partially mitigated to the extent funds are identified for EEWS purposes from other state, local, federal, or private sources. Staff notes that the 2016-17 Budget includes a one-time General Fund appropriation of $3.125 million for state operations related to the development of the EEWS: $734,000 for 4 PY of staff at OES, $150,000 for a financial strategy contract, and $2.241 million for public education and training. OES indicates costs related to the establishment of the Advisory Board and development of a business plan would be minor and absorbable. Staff estimates there could be significant costs related to ongoing activities of OES and the Advisory Board beyond the current fiscal year for which funding has been appropriated, but these costs could be included in the above estimate of ongoing administrative costs. Background: California is the second most seismically active state in the country, behind Alaska. The Uniform California Earthquake Rupture Forecast (UCERF) forecasts a 99.7% chance of a magnitude 6.7 or larger earthquake in the state during the next 30 years. Some countries that experience high seismic activity have SB 438 (Hill) Page 2 of ? developed early earthquake warning (EEW) systems. Currently, Japan is the only country with a nationwide system, while Turkey, Mexico, Taiwan, and others have implemented local systems. Generally, these detection systems are based upon the finding that the first waves emanating from the epicenter of the earthquake, primary waves (P-waves), cause less damage but travel faster than the slower and damage-causing secondary waves (S-waves). This "single-station" approach can be used in conjunction with a "network approach" that combines signals from a regional seismic network of sensors that is capable of characterizing large and complex earthquakes as they evolve. EEW systems harness the sensor signals and provide a warning to the public and active users of the system before a shaking event. Depending on the distance from the epicenter, these systems can provide advanced warning time ranging from seconds to minutes, outside a 20-mile "blind zone" near an epicenter. This would allow for emergency shutdowns of critical infrastructure, such as trains, utilities, and industrial processes, and allow the general public to take protective action. The California Geological Survey (CGS), within the Department of Conservation, currently operates over 5,000 seismic instruments that monitor ground movement around the state through the Strong Motion Instrumentation Program (SMIP). This is the largest portion of the broader California Integrated Seismic Network (CISN), which is comprised of 1,900 monitoring sites operated in partnership with the U.S. Geological Survey, Caltech, and the UC Berkeley Seismological Lab. Information from these instruments is used for research and planning purposes, and to produce "Shakemaps," which inform emergency responders where the worst shaking occurred within minutes of an earthquake. The U.S. Geological Survey is currently operating a small warning system pilot program based on this instrumentation network, and additional federal and foundation grants have been awarded to support the development of a local earthquake early warning system for the Los Angeles and Long Beach areas. Existing inoperative law requires OES, in collaboration with specified entities, to develop a comprehensive statewide EEWS that includes specified features through a public-private partnership. This provision is only operative if OES identified funding for the system from non-General Fund sources, including SB 438 (Hill) Page 3 of ? federal funds, revenue bonds, local funds, and private funds, by July 1, 2016. If the funding is not identified by that date, the requirement to establish an EEWS is repealed. Proposed Law: SB 438 would delete restrictions and conditions for funding and establishing an EEWS, and establish the Advisory Board and EEW Program within OES. Specifically, this bill would: Delete provisions indicating that the requirement to establish the EEWS is inoperative until OES identifies non-General Fund funding for that purpose. Delete provisions that prohibit OES from identifying the General Fund as a funding source for the purpose of establishing the EEWS. Delete provisions that limit EEWS funding to federal funds, revenue bond funds, local funds, and private funds. Delete provisions that repeal the statute on July 1, 2016 if non-General Fund funding for the EEWS is not identified by that date, and delete a requirement for OES to notify the Secretary of State that funding was not identified by that date. Establish the Advisory Board within OES and require the Board to be composed of the following seven voting members: the Secretaries, or their designees, of the California Natural Resource Agency, the California Health and Human Services Agency, the California Transportation Agency, and the California Business Consumer Services, and Housing Agency, as well as appointees by the Assembly, Senate, and Governor, as specified. The Advisory Board would also include the Chancellor of the California State University, or a designee, as a nonvoting member, and may also include the President of the University of California, or a designee, as a nonvoting member. Specify that Advisory Board members serve without compensation, but authorize reimbursement for actual and necessary costs to attend board meetings. Require the Advisory Board to convene periodically and advise OES on all aspects of the EEW Program, including system operations, research and development, finance and investment, and training and education. Require the Advisory Board to also involve specified entities SB 438 (Hill) Page 4 of ? to fulfill certain objectives of the EEW Program, include public participation, and to consult with program participants, state entities, private businesses, postsecondary educational institutions, and subject matter experts on the development, implementation, and maintenance of the EEWS. Require the CISN to be responsible for the generation of an earthquake early warning alert and related systems operations. Require the Advisory Board to comply with specified state open meeting and public records statutes, but prohibit the disclosure of specified trade secrets of private entities that are participating in the EEWS or cooperating with the Advisory Board. Require OES, in consultation with the Advisory Board, to develop and submit a business plan for the EEW Program to the Legislature and the Legislative Analyst's Office by February 1, 2018 that includes the following elements: (1) a funding plan for the program and estimated costs, including specific cost estimates for EEW Program components and identification of specific sources of funding; (2) expected roles and responsibilities of program participants; (3) expected schedules for system completion and provision of actual alerts; and (4) a discussion of reasonably foreseeable EEW Program risks and plans for managing risk. Require OES to annually report to the Legislature on any changes to the initial business plan and an update on progress of the EEW Program and system implementation, as specified. Related Legislation: SB 135 (Padilla), Chap. 342/2013, requires OES to establish a statewide EEWS, as specified. This requirement is only operative after OES identifies non-General Fund funding for the system, and only if it does so by January 1, 2016. SB 494 (Hill), Chap. 799/2015, established the California Earthquake Safety Fund to be used for seismic safety and earthquake-related programs, including the EEWS, and extended the OES deadline for identifying non-General funds for the system until July 1, 2016. AB 1346 (Gray), which is currently pending on the Senate Floor, SB 438 (Hill) Page 5 of ? previously included provisions that would have deleted funding restrictions and conditions that must be met before OES may take actions to establish an EEWS. These provisions are identical to those included in SB 438, but they were amended out of the bill by the author when the bill was approved by this Committee on August 11, 2016. Staff Comments: This bill is intended to establish a governance structure to coordinate and direct activities related to the establishment of an EEWS, and eliminate current restrictions on public funding. OES indicates that the bill will provide an organizational structure to enhance capabilities for developing and implementing a comprehensive EEW Program while providing assurances that are intended to demonstrate a commitment to the program in order to attract investment from private partners and other parties. OES established a working group in 2013 to formally initiate the EEWS planning process, despite the restrictions in the recently repealed law that explicitly state that the requirement to establish an EEWS in consultation with stakeholders is not operative until OES identifies sufficient funding. The working group released a "California Earthquake Early Warning System, Project Implementation Framework" in April of this year. The Implementation Framework describes how the EEWS could be implemented for public use by building upon the existing CISN and ShakeAlert systems, including a five-year implementation schedule that outlines governance needs, capital and operational needs, and system deployment and public outreach plans. The Framework calls for expanding the current sensor network by 646 EEW-capable seismic stations (from the current 469 stations), improving field telemetry for data communications, constructing and upgrading central processing and notification centers, establishing public notification paths, raising awareness through public education efforts, and building in incremental performance improvements. The Project Implementation Framework report also includes a cost estimate that calls for one-time capital expenditures of $22 million for new and upgraded seismic stations, GPS equipment, telemetry, microwave nodes, and other overhead costs, one-time costs of $6 million to develop a public education and outreach program (including social science, public SB 438 (Hill) Page 6 of ? health, and risk communications research), and ongoing personnel and operating costs of $17 million annually. While the estimates provided in the Implementation Framework report may be used as a preliminary assessment of costs to establish and operate an EEWS, the actual costs to implement and maintain a system are subject to a number of unknown variables and risks that could result in higher costs. Previous estimates, according to CISN documentation, indicate that costs to establish a robust, fully operational EEW-capable CISN system in California would be approximately $80 million over five years, not including costs associated with user implementation, or ongoing operations and maintenance. Staff notes that the 2016-17 Budget includes a one-time General Fund appropriation of $10 million to support the implementation of the California EEWS. According to the Budget Change Proposal (BCP) submitted by OES with the Governor's May Revision, $6.875 million will be used for capital costs, including seismic stations, GPS equipment, telemetry, and microwave nodes, and $3.125 million will be used for "recurring costs" of $2.241 million for public education and training, $150,000 for a financial strategy, and $734,000 for 4 permanent PY of OES staffing (even though the funding is one-time). The BCP cited the statutory requirement for OES to establish the EEWS as justification for the funding, but failed to note the following: (1) that OES is prohibited from identifying the General Fund as a funding source for purposes of establishing the EEWS; (2) that the requirement to establish the EEWS is inoperative until OES identifies sufficient non-General Fund resources for that purpose; and (3) that the statutory requirement was set to expire before the budget year began. OES indicates that costs associated with this bill are minor and absorbable, but details on that assessment were not available as of the time of this analysis. It is conceivable that costs to develop the business plan would be relatively minor because OES has dedicated resources to the preparation of the Implementation Framework report, which can be used as a foundation for developing a more detailed business plan. The costs incurred by OES to prepare the Implementation Framework report are unknown. SB 438 (Hill) Page 7 of ? Staff assumes that OES will need to provide staff support to the Advisory Board, and will incur costs to reimburse board members for actual and necessary costs for meeting attendance, to comply with open meeting laws, and to manage public records requests, including legal analysis of what constitutes a "trade secret" that must be redacted or withheld from the public. Initial administrative costs should be covered by the 2016-17 Budget Act appropriation, but ongoing costs to support the Advisory Board and EEW Program are unknown. Staff notes that the funding restrictions (limiting the EEWS funding sources to federal funds, revenue bond funds, local funds, and private funds), as well as the deadline to identify funds prior to establishing an EEWS (both conditions that this bill seeks to delete), were amended into SB 135 by this Committee when it was released from the Suspense File and approved on May 23, 2013. -- END --