BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
234 (Huffman)
Hearing Date: 08/02/2010 Amended: 08/02/2010
As proposed to be amended
Consultant: Brendan McCarthy Policy Vote: EQ 5-2, NR&W 6-3
AB 234 (Huffman), Page 2
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BILL SUMMARY: AB 234 requires the Office of Oil Spill Prevention
and Response to adopt regulations to require "pre-booming"
around vessels that are transferring fuel in state waters. The
bill raises the fee paid by non-tank vessels by $500 and
authorizes the Office to raise the fee on oil imported by $0.01
per barrel. The bill requires the State Lands Commission to
report to the legislature on issues relating to offshore oil
drilling safety.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Increased revenues from ($520) ($1,040)
($1,040)Special *
vessel fees
Potential increased revenues Up to ($5,200) per yearSpecial
*
from per barrel fee
Development of regulations $50 $50 Special
*
Enforcement of pre-booming $1,150
$1,150Special *
regulations
Oil drilling report Absorbable within existing
resourcesGeneral
* Oil Spill Prevention and Administration Fund.
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STAFF COMMENTS:
Under current law, the Office of Oil Spill Prevention and
Response is responsible for regulating the prevention, response,
removal, and cleanup of oil spills in state waters. Under this
authority, the Office requires vessel operators to take certain
precautions and to undertake specific containment and cleanup
actions in response to an oil spill. (One response method is to
AB 234 (Huffman), Page 2
use floating "boom" to surround and contain the oil spill until
the oil can be recovered by specialized ships.)
Current law imposes a fee on owners of non-tank vessels to pay
for the Office's regulation of those vessels. The current fee is
$2,500 per vessel.
Current law authorizes the Office to impose a fee on imported
oil up to $0.05 per barrel, to pay for the Office's costs to
prevent and respond to oil spills in state waters.
AB 234 requires the Office to adopt regulations requiring
"pre-booming" of fuel transfer operations in state waters.
Vessel operators would not be required to pre-boom if it was
unsafe or ineffective under prevailing conditions. Under the
required regulations, vessel operators would have to develop
reports describing the conditions under which pre-booming would
and would not occur. These reports would be provided to the
Office for review and approval. The regulations would require
vessel operators to notify the Office when pre-booming was not
used and the reasons for not doing so.
The bill authorizes (but does not require) the Office to raise
the per-barrel fee to $0.06 and authorizes the Office to
increase the fee in the future by the rate of inflation. The
bill increases the fee on non-tank vessels to $3,000 per vessel.
While the Office has indicated that it is currently in the
process of amending regulations relating to booming, the bill
requires the Office to adopt new regulations. Staff estimates
this will cost about $100,000 in additional staff expenses. In
addition, staff estimates that the Office will face increases
costs of about $1.2 million per year to enforce the provisions
of the bill.
According to the Office, the increase in the per-vessel fee will
generate about $1 million per year in additional revenue. If the
Office were to increase the fee on imported oil to $0.06 per
barrel, it would yield about $5.2 million per year in additional
revenue.
AB 234 also requires the State Lands Commission to prepare a
report on safety issues surrounding offshore oil drilling by
July 1, 2011. The bill requires the Commission to address
several topics in the report, including preventative measures,
response plans, and other issues.
AB 234 (Huffman), Page 2
The State Lands Commission recently directed staff to develop a
report covering similar issues to those required by AB 234.
According to the Commission, the cost to develop any additional
information not required in the existing report can be absorbed
within existing resources.
The proposed author's amendments move up the due date of the
report by the State Lands Commission to March 1, 2011, clarify
that the department may adjust the maximum per-barrel fee for
inflation, and make other technical changes to the bill.
AB 2032 (Hancock, 2009) would have increased the maximum fee on
imported oil to $0.08 per barrel. That measure was vetoed by the
Governor.