BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 718 (Leno) - Hazardous Materials Response and Restoration
Subaccount.
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|Version: May 11, 2015 |Policy Vote: N.R. & W. 6 - 2, |
| | E.Q. 6 - 1 |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 18, 2015 |Consultant: Marie Liu |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 718 would authorize a loan from the Oil Spill
Response Trust Fund (trust fund) of up to $500,000 annually for
the purpose of reimbursing organizations providing wildlife
injured by non-petroleum spills.
Fiscal
Impact:
Up to $500,000 annually from the General Fund to reimburse
nongovernmental organizations for wildlife rescue and
rehabilitation operations.
Minor and absorbable costs to the Oil Spill Prevention and
Response Fund (special) to the Department of Fish and Wildlife
(DFW) to develop the guidelines for the uses of the Hazardous
Materials Response and Restoration Subaccount.
SB 718 (Leno) Page 1 of
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Background: The Office of Oil Spill Prevention and Response (OSPR), led by
the administrator, is responsible for regulating the prevention,
response, removal, and cleanup of oil spills in state waters.
Under this authority, OSPR requires vessel operators to take
certain precautions and to undertake specific containment and
cleanup actions in response to an oil spill.
Existing law authorizes OSPR to impose a $0.25 per barrel fee on
distributors, pipeline operators, refiners, and marine terminal
operators that bring oil into the state. This fee is deposited
into the Oil Spill Response Trust Fund (Trust Fund), until the
balance reaches $55 million. Generally, monies in the Trust Fund
are held in order to pay for the costs of responding to an oil
spill when the responsible party cannot be identified, in the
interim while the responsible party is identified, or if the
responsible party is unable to pay for the response costs.
Proposed Law:
This bill would allow an annual loan of up to $500,000 from the
trust fund to the Hazardous Materials Response and Restoration
Subaccount (subaccount), which would be created by this bill, in
order to reimburse organizations for expenses incurred by rescue
and rehabilitation operations for wildlife injured by spills of
non-petroleum events.
The loan would be made at the discretion of the administrator
and would be subject to the following requirements:
Any loan made to the subaccount would be required to be
repaid, with interest, either by the responsible party, monies
recovered by the responsible party, or the General Fund within
five years.
The total of unpaid loans would limited to $2,500,000,
excluding interest owned on those loans.
The administrator would be required to develop and adopt
guidelines identifying expenses eligible for reimbursement
from the subaccount.
The administrator would be required to notify the Joint
Legislative Budget Committee of any loans made at the time the
SB 718 (Leno) Page 2 of
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loan is made.
Staff
Comments: Fundamentally, the loan created by this bill
guarantees payments to nongovernmental organizations for
wildlife rescue and rehabilitation either from the responsible
party or from the General Fund. The trust fund is just an
intermediary. From this perspective, when the administrator is
determining what activities get reimbursed, the administrator is
essentially deciding the distribution of General Fund, should no
responsible party be identified. Therefore, while the immediate
costs to the loan would be to the trust fund, the ultimate costs
of this bill should be attributed to the General Fund.
Staff emphasizes that the loan permitted by this bill would only
be for organizations providing wildlife rescue and
rehabilitation. Presumably these organizations are
nongovernmental organizations. State costs would still either
need to come from other non-OSPR sources, most likely the Fish
and Wildlife Pollution Account, which is oversubscribed and has
no dedicated funding source. The Legislature and Governor could
decide to appropriate General Fund monies to pay for state
response costs, though the likelihood of this would be far from
certain. In contrast, the Legislature would be bound to use the
General Fund to repay the loan authorized in this bill should no
responsible party be identified.
This bill is in response to a spill of a sticky "mystery goo" in
the San Francisco Bay in January of this year. OSPR responded to
the spill. However, once it was determined that the substance
was not petroleum-base, funding for the respond had to be
shifted away from OSPR's funds, including the trust fund, which
would have otherwise been available to reimburse
non-governmental organizations for their response activities.
The trust fund is continuously appropriated to the Department of
Fish and Wildlife. As this bill allows spending of the Trust
Fund, it creates an appropriation.
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