BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                        SB 900|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
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                                   THIRD READING 


          Bill No:  SB 900
          Author:   Jackson (D), et al.
          Amended:  5/31/16  
          Vote:     21 

           SENATE NATURAL RES. & WATER COMMITTEE:  8-1, 3/29/16
           AYES:  Pavley, Allen, Hertzberg, Hueso, Jackson, Monning,  
            Vidak, Wolk
           NOES:  Stone

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 5/27/16
           AYES:  Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
           
           SUBJECT:   State lands:  coastal hazard removal and remediation  
                     program


          SOURCE:    California State Controller Betty Yee


          DIGEST:  This bill requires, upon appropriation of funding by  
          the Legislature, that the State Lands Commission (SLC)  
          administer a coastal hazard removal and remediation program. 


          ANALYSIS:   Existing law establishes the SLC pursuant to Public  
          Resources Code Section 6101 et seq., as an independent  
          commission comprised of the Lieutenant Governor, the State  
          Controller, and the Director of Finance. Established in 1938,  
          the SLC manages the state's 4 million acres of tidelands and  
          submerged lands and the beds of navigable rivers, streams,  
          lakes, bays, estuaries, inlets, and straits. In the marine  
          context, the SLC has broad authority over sovereign lands  








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          including rivers and sloughs, lakes, tidelands, and submerged  
          lands. It also manages energy and mineral resource development  
          through leases, has an oil spill prevention program at marine  
          oil terminals and offshore platforms, and has an invasive  
          species prevention program from large ocean-going vessels. 

          This bill: 

          1)Contains findings and declarations intended to demonstrate the  
            historic and present concerns with remnants of abandoned  
            structures along the coast including oil and gas wells, piers,  
            pilings, jetties, and seawalls. Early oil and gas wells that  
            were abandoned decades ago prior to the development of modern  
            standards may still be seeping oil into the surf zone that  
            adversely affects human recreation and other environmental  
            issues. The findings also note the absence of a statewide  
            inventory of coastal hazards, and the lack of funding not only  
            for the inventory, but also for assessments for removing the  
            hazards, as well as implementation of actual removal projects.  


          2)Requires, upon appropriation of funding by the Legislature,  
            that the SLC administer a coastal hazard removal and  
            remediation program that does all of the following: 

             a)   Complete an inventory of the legacy oil and gas wells  
               and other coastal hazards along the coast including field  
               studies and determining high priority hazards and legacy  
               oil and gas wells to remediate. 

             b)   Survey, study, and monitor oil seepage in state waters  
               and request studies to determine and address oil seepage  
               locations, rates, environmental impacts, and possible  
               mitigation measures. 

             c)   Begin the process of remediating legacy oil and gas  
               wells that have high risk of leaking and with any remaining  
               fund to remove other identified coastal hazards. 

          3)Authorizes the SLC to seek to abandon, in cooperation with the  
            Division of Oil, Gas, and Geothermal Resources, legacy oil and  
            gas wells that present a hazard to public health and safety  
            and the environment. Legacy oil and gas wells are defined as  
            those with little or no information on how the well was  







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            originally abandoned, and where there is no viable company  
            with the responsibility to undertake abandonment procedures  
            that complies with modern standards. 

          4)Defines "coastal hazards" to include piers, jetties, groins,  
            seawalls, and facilities associated with oil extraction or  
            other commercial operations that may include wood or steel  
            piles, sheet metal pilings, H piles and H beams, well casings,  
            well caissons, railroad irons, cables, angle bars, pipes,  
            pipelines, rip rap, and wood beams and structures. 

          5)Provides that the SLC may seek private or philanthropic  
            funding to assist with its coastal hazard removal and  
            remediation program. 

          6)Proposes funding pursuant to Section 6217 of the Public  
            Resources Code (tidelands oil revenues) which generally  
            provides that funds paid to the SLC shall be deposited in the  
            General Fund. For fiscal year 2017-18, the sum of $2 million  
            would be transferred to the Land Bank Fund for the purpose of  
            implementing the SLC coastal hazard removal and remediation  
            program.

          7)Requires, in subsequent fiscal years, an amount sufficient to  
            bring the unencumbered balance to $2 million.  


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


          According to the Senate Appropriations Committee, $2 million per  
          year transferred from the General Fund to the Land Bank Fund  
          (LBF) in FY 2017-18, and up to $2 million per year transferred  
          thereafter to ensure that the unencumbered funds in the LBF  
          available for implementation equal $2 million.  According to the  
          SLC, one-time cost of $100,000 to complete the in-depth  
          inventory of legacy wells; annual costs of approximately $50,000  
          to survey and monitor oil seepage; annual costs of approximately  
          $200,000 to remove coastal hazards; cost pressures up to $390  
          million to plug and abandon legacy wells; minor and absorbable  
          costs to the SLC to report activities and accomplishments to the  
          Legislature; and minor and absorbable costs to the Division of  
          Oil, Gas and Geothermal Resources for permitting and  







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          consultation activities related to plugging and abandoning  
          wells.


          SUPPORT:   (Verified5/27/16)


          California State Controller Betty Yee (source) 
          County of Santa Barbara
          Environmental Defense Center
          Heal the Ocean 
          Get Oil Out
          Santa Barbara Channelkeeper
          State Lands Commission 
          Sierra Club California


          OPPOSITION:   (Verified5/27/16)


          None received


          ARGUMENTS IN SUPPORT:    California State Controller Betty Yee  
          is the sponsor of this bill. Along with the other supporters,  
          she is quite concerned by the fact that the SLC estimates that  
          there are approximately 200 "legacy" oil wells in California,  
          the majority of which are in Santa Barbara County near  
          Summerland and Ellwood beaches and along the Central Coast. 

          The SLC, Controller Yee, and many of the other supporters are  
          also actively in support of the in-depth study of coastal  
          hazards, the removal of other coastal hazards unrelated to oil  
          and gas production, and the monitoring of "natural seepage." 

          The SLC pointed out that drilling activity on tidelands occurred  
          before the process was regulated and that there was little if  
          any oversight of abandoned activities. Also, early coastal  
          protective structures, such as seawalls and groins, have  
          deteriorated and are now public safety hazards. In both cases,  
          because there are no identifiable responsible parties, the State  
          of California is responsible for removing and remediating these  
          hazards. 








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          The SLC argues that it has a good track record of removing and  
          remediating coastal hazards when funding is provided. 

          Sierra Club California states that while the visual  
          infrastructure of old oil operations has been removed, many of  
          these wells were not properly capped, causing fresh oil to foul  
          the ocean and beaches on a regular basis. Additionally, it notes  
          that the Refugio oil spill in 2015 highlighted the state's lack  
          of reliable data on the amount of natural oil seepage in state  
          waters which underscores the importance of the study and  
          monitoring provision regarding natural seepage that is in this  
          bill. 






          Prepared by:William Craven / N.R. & W. / (916) 651-4116
          5/31/16 21:58:34


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