BILL ANALYSIS �
AB 2267
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Date of Hearing: May 16, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2267 (Hall) - As Amended: April 26, 2012
Policy Committee: Water, Parks and
Wildlife Vote: 12-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill revises provisions of an existing program that allows
the partial removal of offshore oil structures, which includes
the requirement that those seeking to partially remove a
structure share with the state the cost savings of not having to
completely remove the structure. Specifically, this bill:
1)Modifies the definition of "cost savings" to include the costs
to the applicant of participating in either the full structure
removal program or the partial structure removal program.
2)For applications submitted on or before January 1, 2017,
specifies that calculation of cost saving include costs of (a)
providing surety bonds or similar assurance that the applicant
will cover the cost to Department of Fish and Game (DFG) and
all reviewing agencies to carry out environmental reviews and
other administrative actions; (b) providing DFG's program
startup costs, to be paid by the first applicant; and (c)
providing indemnification to the state and the department
against any and all liability.
3)States that DFG shall not reimburse the costs of an applicant
who applies on or before January 1, 2017, and who is a first
applicant to cover DFG's startup costs.
4)Adds air quality effects to the criteria to be considered by
the Ocean Protection Council (OPC) when determining whether
the partial removal of an offshore oil structure provides a
net environmental benefit and adds the Air Resources Board
(ARB) to the list of entities the OPC must consult with when
determining a proposed project's net environmental benefit.
AB 2267
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FISCAL EFFECT
1)Under the offshore oil structure removal program, an applicant
who realizes cost savings, as defined in statute, shares those
cost savings with the state. Because this bill increases the
items to be considered in determining the cost to an applicant
to participate in the program, the bill has the potential to
reduce the amount of cost savings realized from partial
removal of an offshore oil structure and, therefore, the
amount of money to be shared with the state.
The amount by which this bill will reduce cost savings that
must be shared with the state is unknown, but may total in the
millions of dollars. Such a reduction will occur to the
extent an applicant, who would have applied on or before
January 1, 2017, for permission to partially remove an
offshore oil structure absent this bill, applies to partially
remove an offshore oil structure pursuant to the provisions of
this bill.
Whatever the amount of reduced cost savings shared with the
state, the reduction will occur proportionally, as follow,
consistent with existing law: 85% to the California Endowment
for Marine Preservation; 10% to the General Fund; 2% each to
the Fish and Game Preservation Fund and the Coastal Act
Services Fund; and 1% to the board of supervisors of the
county in which a project occurs.
2)Minor, absorbable costs to ARB to consult with OPC (special
fund).
COMMENTS
1)Rationale . The author contends it appropriate that all actual
costs incurred by an applicant to partially remove an offshore
oil structure be considered when determining the cost savings
that must be shared with the state and that OPC consider air
quality effects when determining a projects net environmental
benefit.
2)Background. AB 2503 (J. Perez, Chapter 687, Statutes of 2010)
enacted the California Marine Life Legacy Act. The act
establishes a program under which an offshore oil platform
owner is allowed to partially remove a platform, leaving
behind some of the underwater structure for marine habitat.
AB 2267
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The owner could voluntarily apply to DFG to partially remove
such a structure and, if certain conditions are met, including
determination by OPC of net environmental benefit, partially
remove the structure.
Offshore oil structure owners might realize savings in the
tens-to-hundreds of millions of dollars by partially removing
decommissioned oil structures, as opposed to fully removing
them. The act requires any cost savings, as defined by the
act, be shared with the state in a percentage dependent on the
timing of the application for partial removal: 57% of cost
savings for applications submitted before 2017, 65% for
applications submitted between 2017 and 2023, and 80% for
those submitted after 2023. The state's share of cost savings
is to be apportioned, as follows: 85% to the California
Endowment for Marine Preservation; 10% to the General Fund; 2%
each to the Fish and Game Preservation Fund and the Coastal
Act Services Fund; and 1% to the board of supervisors of the
county in which a project occurs.
3)Support . This bill is supported by the Coalition for Enhanced
Marine Resources and the Sportfishing Conservancy (sponsors
both), as well California Ships to Reefs, Inc.
4)There is no opposition formally registered to this bill.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081