BILL ANALYSIS
SB 981
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Byron D. Sher, Chairman
2003-2004 Regular Session
BILL NO: SB 981
AUTHOR: Soto & Romero
AMENDED: April 3, 2003
FISCAL: Yes HEARING DATE: April 21, 2003
URGENCY: No CONSULTANT: Bruce Jennings
SUBJECT : PETROLEUM POLLUTION CLEANUP AND
PREVENTION ACT OF 2003
SUMMARY :
Existing law :
1)Establishes the Carl Moyer Memorial Air Quality Standards
Attainment Program (Carl Moyer), generally administered by
the California Air Resources Board (CARB), and implemented
with grants by air quality management districts and air
pollution control districts to offset the incremental cost
of projects that reduce the emissions of oxides of nitrogen
(Nox) from on-road trucks, off-road non-recreational
equipment, locomotives, diesel marine vessels, stationary
agricultural engines, and other diesel engines with high
emissions.
2)Requires CARB to achieve the maximum degree of emission
reduction possible from vehicular and other mobile sources
in order to accomplish the attainment of state ambient air
quality standards by the earliest practicable date.
3)Requires any air quality management district or air
pollution control district with a population of one million
residents or greater, until January 1, 2007, to spend at
least 50% of Carl Moyer moneys on the purchase of reduced
emission school buses, and diesel mitigation programs in
order to directly reduce public health threats from air
contaminants in communities with the most significant
exposures.
4)Requires the Board of Equalization to collect two different
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fees on crude oil and petroleum products transported into,
across, and/or through the state. The Oil Spill and
Prevention Fee (Section 8670.40 of the Government Code),
imposes a fee not to exceed $0.04 per barrel upon every
person owning crude oil at the time the crude oil is
received at a marine terminal from within or outside the
state, or upon owners of petroleum products received at a
marine terminal from outside the state.
5)Imposes an oil spill response fee, capped at $0.25 per
barrel on every person owning petroleum products at the time
the petroleum products are received at a marine terminal in
this state by means of a vessel from a point of origin
outside this state. The fee is also imposed on an operator
of a pipeline transporting petroleum products by means of a
pipeline operating across, under, or through the marine
water of this state and an operator of a refinery receiving
crude oil at a refinery in this state. The Oil Spill
Response Trust Fund reached its $50 million maximum level in
1991-92 and no additional fees have been collected since
that time.
This bill:
1)Enacts the Children's Health and Petroleum Pollution
Remediation Act of 2003 and makes extensive legislative
findings regarding petroleum products and air pollution.
2) Creates the Children's Health and Petroleum Pollution
Remediation Trust Fund in the State Treasury with the
specified purposes, including the receipt of fees
established in this bill.
3) Requires every operator of a refinery to pay a fee equal
to thirty cents for each barrel of crude oil that is used
for the production of gasoline and diesel fuels, collected
monthly, paid to the State Board of Equalization (BOE), and
transmitted to the Fund.
4) Directs the Controller to distribute funds to each
district on the basis of a district's share of a statewide
emissions inventory, with each district receiving a minimum
of $250,000.
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5) Requires each district to develop and expend funds on
petroleum pollution source reduction programs and public
health remediation programs. The district must establish
that the programs will be based on a clear nexus regarding
the relative harm caused, or intended to mitigate or
prevent the relative harm created, by diesel and gasoline
fuel in that district's jurisdiction and the revenues
received from the fee.
6) Provides various additional clarifying, technical, and
definitional provisions, including reimbursements for
administrative expenses.
COMMENTS :
1) Purpose of Bill . The primary reason for introducing SB
981, according to the author, is that existing resources
are insufficient to mitigate the damaging effects to public
health and the environment resulting from the combustion of
petroleum products. SB 981 would authorize local air
districts, under specified conditions, to use the proceeds
of a fee for the treatment of damaging effects to public
health as well as the reduction of emission sources.
Proponents contend that the combustion of petroleum
products, especially gasoline and diesel fuels, is the
major source of ozone precursors, toxic air contaminants,
and particulate matter throughout the state. Such
pollutants are a recognized cause of cancer in humans as
well as being strongly associated with respiratory
diseases. The economic costs to the public are substantial
as measured by lost workdays and school attendance.
Opponents argue that SB 981 is a disguised gas tax that
unfairly burdens the business community and low-income
households. Additionally, opponents claim that the measure
would discourage refinery investments.
2)Suggested Amendments.
a) Ensuring a Nexus between the fee and funded
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activities. The bill establishes that every operator of a
refinery pay a fee for that portion of a barrel of oil
that is refined within the state used for the production
of gasoline and diesel. Given the possibility that oil
may be refined, but not sold and consumed within
California, the phrasing could further clarify that the
fee shall be administered by the Board of Equalization in
accordance with those fuels produced and consumed in
California.
b) Avoiding Potentially Duplicative Health Research
Activities. The Office of Environmental Health Hazard
Assessment represents the state's premier center for
conducting science reviews and establishing public health
objectives representing the basis for regulatory
standards, including important and continuing work on
cumulative risks for air pollutants. By working in
consultation with the California Air Pollution Control
Officers Association, OEHHA could help to avoid
potentially duplicative public health research funded by
individual air districts in addition to coordinating and
consolidating health research projects.
c) Avoiding Potentially Duplicative Administrative
Activities. The bill calls on each district to coordinate
with any local, state, and federal agency as well as
non-governmental organizations for pollution mitigation
programs. Given the potentially substantial
duplication of administrative activity across districts
to conduct this activity, the California Air Pollution
Control Officers Association could provide a more logical
forum for coordinating such activities.
d) Severability of Provisions. Given the prospective
litigation that might follow this measure should it be
signed into law, the author may wish to amend the measure
to include a severability clause so that other provisions
may continue should a judicial decision rule against a
specific provision.
3)Background . In 2002, Assembly Bill 2682 (Chu) and Senate
Bill 1994 (Soto) would have required every operator of a
refinery to pay a fee of $0.30 for each barrel of crude oil
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received at a refinery within the state. Among other
things, the fee would have provided funding to a California
Environmental Protection Agency-administered program for
projects addressing petroleum-related contamination of
groundwater, marine and terrestrial surface waters, soil,
and drinking water supplies, and to the State Air Resources
Board to provide funding for the purchase of new, lower
emission school buses pursuant to guidelines adopted by the
State Air Resources Board. Both bills were held in their
respective Appropriation Committees.
4)Related Legislation. The bill is similar to AB 1500 (Diaz &
Pavley) which imposes a one dollar fee per barrel of crude
oil to provide funding to the California Environmental
Protection Agency (Cal EPA) to fund investigative and
remedial projects addressing the contamination of soil,
drinking water supplies, groundwater, and marine and
terrestrial surface waters to the degree that a nexus to
petroleum products refined by a refiner can be established;
funds petroleum consumption reduction and pollution
prevention strategies established by the State Energy
Resources Conservation and Development Commission; funds the
development of new and/or expanded public transportation
systems, bicycle and pedestrian access and facilities; funds
the retrofitting or replacing of existing petroleum fueled
public transport buses and trains with alternative fuel
engines; and, funds diesel emission reduction programs, such
as the Carl Moyer Program and the Lower-Emission School Bus
Program administered by CARB.
SOURCE : South Coast Air Quality Management District
SUPPORT : Able Industrial Products, Inc., Air Pollution Control
District, Allsup Corp., American Lung Association
(California, Inland Counties, Los Angeles County,
San Diego and Imperial Counties), Another Cleaners &
Laundry, AREE International Corp., Asthma & Allergy
Foundation of America, A-Z Bus Sales, Azusa Pacific
University, Bay Area Air Quality Management
District, Big Bear City Community Services District
Board of Directors, B'nai B'rith Southern
California, California Air Pollution Control
Officers Association, California Communities Against
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Toxics, California League of Conservation Voters,
California League of Conservation Voters Education
Fund, California Natural Gas Vehicle Partnership,
Casa De Los Amigos, Chino Valley Unified School
District, City of Riverside, Clean Air Now, Clean
Power Campaign, Coalition for Clean Air, Coalition
for a Safe Environment, Coast-to-Coast Community
Campaigns, Daniel Gutierrez and Associates, Earth
Day Los Angeles, ENRG, Environment California,
Environmental Defense, E-Tech Environmental, J.
Gallo Mobile Tree Grinding, Gas Equipment Systems,
Inc., Hispanic Chamber of Commerce of Orange County,
Hollywood Test Only Station, International Visitors
Council of Los Angeles, Latino Empowerment
Foundation, Liberty Hill Foundation, Los Angeles
County Bicycle Coalition, Los Angeles Unified School
District, Los Angeles Interfaith Environmental
Council, Los Amigos of Orange County, J. Miller
Tractor Work, MD Environmental, Mission Hospital,
Moroni Inc., Natural Resources Defense Council,
North Valley Coalition, O.C. Korean American Health
Information & Education Center, Physicians for
Social Responsibility (Los Angeles & San Francisco
Bay Area), Planning and Conservation League, Ron
Lopez and Associates, Sandruce Engineering
Consultants, St. John's Well Child Center, Schools'
Involvement Program, Sierra Club California,
Talavera's Fine Furniture Inc., Tetra Tech, Inc.,
Union of Concerned Scientists, Universal Cylinder
Exchange, University of California (Los Angeles &
Irvine), Urban Dimensions, VELA Enterprises, Inc., 9
individuals
OPPOSITION : California Chamber of Commerce, Irvine Chamber
of Commerce, California Manufacturers and
Technology Association, California Trucking
Association, California Independent Petroleum
Association, Consumers Against the Hidden
GasTax, Howard Jarvis Taxpayers Association,
Rodgers Trucking Company, Western States
Petroleum Association, Yucca Valley Airport
District
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