BILL ANALYSIS �
AB 2267
Page 1
ASSEMBLY THIRD READING
AB 2267 (Hall)
As Amended April 26, 2012
Majority vote
WATER, PARKS & WILDLIFE 12-0
APPROPRIATIONS 17-0
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|Ayes:|Huffman, Halderman, |Ayes:|Fuentes, Harkey, |
| |Blumenfield, Campos, | |Blumenfield, Bradford, |
| |Fong, Beth Gaines, | |Charles Calderon, Campos, |
| |Williams, Roger | |Davis, Donnelly, Gatto, |
| |Hern�ndez, Hueso, Jones, | |Ammiano, Hill, Lara, |
| |Lara, Yamada | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
| | | | |
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SUMMARY : Revises requirements of an existing program governing
partial removal of offshore oil structures by modifying the
calculation of cost savings which are to be shared with the
state, the determination of net environmental benefit, and
requirements for indemnification of the state from liability.
Specifically, this bill :
1)Revises the calculation of "cost savings" for purposes of the
partial oil structure removal program to include consideration
of all costs to the applicant of participation in either the
partial or full removal program.
2)Provides that for applications for partial removal submitted
on or before January 1, 2017, the costs to the applicant of
providing surety bonds or other forms of financial assurances
to cover the state's program costs, the costs to the first
applicant to cover the state's startup costs, and the costs of
providing indemnity agreements to the state, shall be included
in the calculation of cost savings.
3)Revises the factors to be taken into account in determining
"net benefit to the marine environment" to include air quality
impacts, and requires the Ocean Protection Council (OPC) to
consult with the Air Resources Board (ARB) in determining the
criteria for evaluating net environmental benefit.
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4)Makes other technical changes.
EXISTING LAW :
1)Authorizes partial removal of a decommissioned offshore oil
platform, as an alternative to full removal, if specified
conditions are met, including but not limited to, a finding by
the OPC that partial removal would result in a net
environmental benefit to the marine environment as compared to
full removal.
2)Requires that a portion of the cost savings to the applicant
be shared with the state, with the state's share ranging from
55% to 80% based on the date of application. Requires that
the state's share be apportioned as follows: 10% to the state
General Fund, 2% to the Fish and Game Preservation Fund, 85%
to the California Endowment for Marine Preservation, 2% to the
Coastal Act Services Fund, and 1% to the board of supervisors
of the local county.
3)Requires an applicant for partial removal of an offshore oil
structure, as a condition for approval, to enter into an
agreement with the state to indemnify the state and DFG from
liability, to the extent permitted by law, for any claims
against the state for actions the state undertakes in
implementing the program. Among other things, the program
requires DFG to take over title to, and responsibility for,
management of the remaining structure.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, this 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 follows,
consistent with existing law: 85% to the California Endowment
for Marine Preservation; 10% to the General Fund; 2% each to the
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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. This bill may also result in minor,
absorbable costs to the ARB to consult with OPC (special fund).
COMMENTS : AB 2503 (John A. P�rez), Chapter 687, Statutes of
2010, enacted the California Marine Life Legacy Act, authorizing
partial removal as an alternative to full removal of
decommissioned offshore oil structures if certain conditions are
met. Conditions include a finding that conversion to an
artificial reef would provide a "net benefit" to the marine
environment as compared to complete removal of the facility from
the marine environment, and requires a portion of the cost
savings to the operator be shared with the state, with a portion
being credited to the state General Fund, and a portion to a
California Endowment for Marine Preservation. The amount of the
cost savings required to be shared with the state and the
Endowment increases over time from 55% if the application is
submitted before 2017, to 65% if submitted after 2017 but before
2023, and 85% if submitted on or after 2023. This bill makes
revisions to several of the provisions of AB 2503.
Supporters emphasize this bill is needed to ensure that all
actual costs incurred by applicants are considered in
determining the cost savings that are shared with the state and
the environmental endowment. Supporters believe by allowing
these costs to be included it will create a greater incentive
for owners of oil platforms to submit applications for partial
removal and to do so at an earlier date. Supporters also assert
that all environmental impacts, including air quality impacts
and the carbon footprint of removal, should be considered in
determining the net environmental benefit of partial versus full
removal.
Amendments taken in the policy committee provide that the
allowances for certain costs to be considered in the calculation
of cost savings apply only for applications submitted on or
before January 1, 2017.
Analysis Prepared by : Diane Colborn / W., P. & W. / (916)
319-2096
AB 2267
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FN: 0003889