BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 900  


                                                                    Page  1





          Date of Hearing:  August 3, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 900  
          (Jackson) - As Amended May 31, 2016


           ----------------------------------------------------------------- 
          |Policy       |Natural Resources              |Vote:|9 - 0        |
          |Committee:   |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
           ----------------------------------------------------------------- 


          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill transfers $2 million from the General Fund (GF) to the  
          Land Bank Fund (LBF) for FY 2017-18, to be available, upon  
          appropriation, for the State Lands Commission (SLC) to implement  
          a coastal hazard removal and remediation program.  Beginning in  
          FY 2018-19, this bill annually transfers up to $2 million from  
          the GF to the LBF to ensure a total of $2 million is available.   
          Specifically, this bill: 


          1)Provides LBF funds are available to the SLC upon appropriation  
            by the Legislature in the Budget Act. 









                                                                     SB 900  


                                                                    Page  2






          2)Requires SLC, within two years of an appropriation of funds,  
            to administer the coastal hazard removal and remediation  
            program to:


             a)   Complete an in-depth inventory of legacy (i.e.,  
               abandoned) oil and gas wells and other coastal hazards  
               along the coastline and determine high-priority hazards and  
               wells to remediate.


             b)   Survey, study, and monitor oil seepage in state waters  
               and tidelands to determine oil seepage locations, rates,  
               and environmental impacts.


             c)   Begin the process of remediating improperly  
               abandonedwells with a high risk of leaking, and with any  
               remaining funds, remove other identified coastal hazards.  


          1)Authorizes SLC to seek and accept gifts, bequests, devises, or  
            donations to fund the program without the approval of the  
            Department of Finance.


          2)Authorizes SLC, in cooperation with the Division of Oil, Gas,  
            and Geothermal Resources (DOGGR), authorizes SLC to abandon  
            (properly close) wells that present a hazard to public health  
            and safety and the environment.  


          3)Requires SLC to annually report to the Legislature the  
            activities and accomplishments of the program.  


          FISCAL EFFECT:









                                                                     SB 900  


                                                                    Page  3






          1)The redirection of $2 million from the GF to the LBF in FY  
            2017-18 and up to $2 million per year thereafter to ensure the  
            unencumbered funds in the LBF are available to the SLC for  
            program implementation.


          2)One-time SLC cost of approximately $100,000 to complete the  
            in-depth inventory of legacy wells (LBF).





          3)Annual SLC costs of approximately $50,000 to survey and  
            monitor oil seepage and annual SLC costs of approximately  
            $200,000 to remove coastal hazards (LBF). 



          4)Unknown costs to plug and abandon legacy wells, potentially in  
            the $1 million per well range if the well is in the tidal zone  
            (LBF).  This includes CEQA compliance (which can be hundreds  
            of thousands of dollars).  
          5)DOGGR costs are absorbable.


          COMMENTS:


          1)Purpose.  According to the author, we already know there are  
            over 200 improperly capped wells in state waters.  In order to  
            completely address the issue of legacy coastal oil wells, this  
            bill directs the SLC to conduct an in-depth inventory of  
            legacy oil wells along California's coastline.  The author  
            further contends, given the effectiveness of SLC and its staff  
            at protecting California's coastline, it is the appropriate  
            body to remediate California's legacy oil wells and other  
            coastal hazards.  








                                                                     SB 900  


                                                                    Page  4







          2)Background. Coastal hazards can include remnants of coastal  
            structures, piers, oil wells, pilings, deteriorated electric  
            cables, and old pipes.  Many coastal hazards are located on  
            public trust lands set aside for commerce, navigation,  
            fishing, and recreation, and can impede coastal use and  
            threaten public health and safety.  The Summerland Oil Field  
            in Santa Barbara County was the world's first offshore oil  
            drilling operation and predates any regulatory framework.   
            While the visual infrastructure has been removed, the wells  
            were not properly capped and continue to leak oil into the  
            ocean and Santa Barbara's beaches.  



          SLC has developed a limited coastal hazard removal program that  
            has operated when funding has been available.  The program was  
            initiated when an inventory performed in the mid-1980s found  
            over 400 coastal hazards in Los Angeles, Santa Barbara, and  
            Ventura Counties. While some hazards were traced to  
            responsible parties, most were not and consequently became the  
            responsibility of the state.  SLC has completed eight hazard  
            removal projects since 2001.  In August, 2015, SLC directed  
            staff to conduct an initial assessment of the Becker Onshore  
            Well (in the Summerland Oil Field).  
          Analysis Prepared by:Jennifer Galehouse / APPR. / (916)  
          319-2081



















                                                                     SB 900  


                                                                    Page  5