BILL ANALYSIS �
AB 2201
Page 1
ASSEMBLY THIRD READING
AB 2201 (Bradford)
As Amended April 25, 2012
Majority vote
GOVERNMENTAL ORGANIZATION 15-1 APPROPRIATIONS 12-4
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|Ayes:|Hall, Nestande, Atkins, |Ayes:|Fuentes, Blumenfield, |
| |Block, Blumenfield, | |Bradford, Charles |
| |Chesbro, Cook, Gatto, Hill, | |Calderon, Campos, Davis, |
| |Jones, Ma, Perea, V. Manuel | |Gatto, Hall, Hill, Lara, |
| |P�rez, Silva, Torres | |Mitchell, Solorio |
| | | | |
|-----+----------------------------+-----+--------------------------|
|Nays:|Garrick |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Wagner |
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SUMMARY : Raises the civil penalties associated with violations of
the Elder California Pipeline Safety Act of 1981 (Act).
Specifically, this bill :
1)Raises the civil penalties for each day that a violation of the
Act persists from $10,000 to $200,000.
2)Raises the civil penalties for any related series of violations of
the Act from $500,000 to $2 million.
EXISTING LAW :
1)Provides the State Fire Marshal (SFM), under the Elder California
Pipeline Safety Act of 1981, with safety regulatory jurisdiction
over interstate pipelines used for the transportation of hazardous
or highly volatile liquid substances, subject to federal law.
2)Establishes that a violation of the Act, as determined by the SFM,
is a civil penalty of not more than $10,000 for each day that the
violation persists.
3)Establishes that the maximum civil penalty for any related series
of violations is not permitted to exceed $500,000.
4)Requires the SFM to deposit these civil penalties into the Local
Training Account in the California Hazardous Liquid Pipeline
Safety Fund. The money is available, upon appropriation by the
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Legislature, to the State Fire Marshal, who is required to use the
money for providing hazardous liquid fire suppression training to
local fire departments.
FISCAL EFFECT : According to the Assembly Appropriations Committee,
there are no significant costs associated with this legislation.
COMMENTS :
Background : While the federal government is primarily responsible
for developing, issuing and enforcing pipeline safety regulations,
under the U.S. Department of Transportation's Pipeline and Hazardous
Materials Safety Administration (PHMSA), the pipeline safety
statutes provide for state intrastate regulatory, inspection, and
enforcement responsibilities under an annual certification. To
qualify for certification, a state must adopt the minimum federal
regulations. A state must also provide for injunctive and monetary
sanctions substantially the same as those authorized by the pipeline
safety statutes.
As part of this program, PHMSA provides reimbursable federal grant
funds to state pipeline programs to offset up to 80% of costs.
According to the author, these funds currently range from $1 million
to $1.4 million. The PHMSA uses a point system based on program
performance and available grant dollars in awarding grant amounts.
In July 2011, PHMSA notified the State of California pipeline safety
programs that they will deduct points beginning in 2012 if the state
has not achieved the desired penalty levels as set forth by this
bill by the end of 2012.
Increases in civil penalties by the federal government : In an
effort to enhance the security and safety of pipelines, Congress
enacted the Pipeline Safety Improvement Act of 2002 which increased
the civil penalties from $25,000 per day to $100,000 per day and
changed the maximum civil penalty for a series of related violations
from $500,000 to $1 million.
Similarly, President Obama recently signed the Pipeline Safety,
Regulatory Certainty, and Job Creation Act of 2011 to increase the
civil penalties once again from $100,000 per day to $200,000 and
increase the maximum civil penalty for a series of related
violations from $1 million to $2 million.
Purpose of the bill : According to the author the assessment of
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civil penalties is reserved for the most serious of violations where
the risk to the public and/or damage to the environment has occurred
or could have occurred due to operator negligence. The $10,000
maximum penalty per violation is too low to provide an effective
deterrent or to appropriately punish an operator for serious
pipeline safety violations.
The increases in civil penalties will make California's penalties
more in line with similar federal civil penalties, provide for an
effective deterrent, appropriately punish an operator for serious
pipeline safety violations, and ensure that the State of California
continues to receive the appropriate federal grant funds.
The office of the State Fire Marshall's Pipeline Safety Division :
The SFM regulates the safety of approximately 5,500 miles of
intrastate hazardous liquid transportation pipelines and acts as an
agent of the federal Office of Pipeline Safety (OPS) concerning the
inspection of more than 2,000 miles of interstate pipelines.
Pipeline Safety staff inspect, test, and investigate to ensure
compliance with all federal and state pipeline safety laws and
regulations. Hazardous liquid pipelines are also periodically
tested for integrity using procedures approved by the Office of the
SFM. The program has been certified by the federal government since
1981.
Kinder Morgan Example : On November 9, 2004, in Walnut Creek,
California a petroleum pipeline owned and operated by Kinder Morgan
Energy Partners was struck by a contractor of the Mountain Cascade
Inc. who was operating in the construction of a water pipeline. A
massive gasoline spill quickly ignited an explosion that caused the
deaths of five individuals and injuries to four others. Several
homes were ignited and one was partially destroyed. After an
investigation by the SFM, it was determined that Kinder Morgan had
failed to accurately stake-out the location of the pipeline. The
SFM assessed the maximum fee of $500,000 dollars to Kinder Morgan as
a result of the investigation.
Analysis Prepared by : Felipe Lopez / G. O. / (916) 319-2531FN:
0003575