BILL ANALYSIS �
-----------------------------------------------------------------
| |
| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2011-2012 Regular Session |
| |
-----------------------------------------------------------------
BILL NO: SB 584 HEARING DATE: April 12, 2011
AUTHOR: Evans URGENCY: No
VERSION: As Introduced CONSULTANT: Newsha Ajami
DUAL REFERRAL: No FISCAL: Yes
SUBJECT: Oil spill prevention and administrative fee.
BACKGROUND AND EXISTING LAW
Section 8670.37.5 of the Government Code under the
Lempert-Keene-Seastrand Oil Spill Prevention and Response Act
requires the administrator of the Office of Spill Prevention and
Response (OSPR) to establish rescue and rehabilitation stations
for seabirds, sea otters and other marine mammals that may
become oiled in an oil spill. These stations are collectively
known as the Oiled Wildlife Care Network (OWCN). The OWCN is
administered by the Wildlife Health Center at the UC Davis
School of Veterinary Medicine. During a response, the OWCN
receives assistance from its 24 participating wildlife
organizations and uses one or more of the 12 regional facilities
either built specifically or modified to accommodate oiled
wildlife care.
Section 8670.46 creates the Oil Spill Response Trust Fund (trust
fund), which is funded by a 25 cent maximum per barrel
assessment on distributors, pipeline operators, refiners, and
marine terminal operators. The fees are collected until the
trust fund reaches $55 million. The trust fund is to be used to
cover the costs of response, containment, and cleanup of oil
spills into marine waters, including wildlife rehabilitation.
The OWCN is financially supported by interest earned on the
trust fund up to $2 million per year for:
Equipping, operating and maintaining OWCN.
Supporting technological development and research
related to oiled wildlife care.
Section 8670.40 creates the Oil Spill Prevention and
Administration Fund (OSPAF), which is funded by a 5 cent maximum
1
assessment on each barrel of crude oil or petroleum products
brought into the state. This fund is used to finance oil spill
prevention and response readiness programs. Among other things,
the OSPAF may be used to fund the OCWN's costs for only
training, field collection, and search and rescue activities.
PROPOSED LAW
This bill would lift the restrictions to allow the OSPAF to be
used to fund all required activities of the OWCN, not just
training, field collection, and search and rescue activities.
ARGUMENTS IN SUPPORT
According to the author, "Meeting OWCN's operational costs is
vital to ensuring it is ready to respond quickly in the event of
an oil spill, which often makes the difference between life and
death for oiled wildlife. This bill is needed because OWCN's
primary funding source will not be able to fully fund it in
2011-12, and the Oil Spill Prevention and Administration Fund is
limited to funding only certain costs incurred by the OWCN, which
limits the state's ability to utilize the Fund to help meet the
shortfall."
ARGUMENTS IN OPPOSITION
None received.
COMMENTS
Is it important to fund OWCN?
Quick, expedient and effective action is essential to saving the
lives of wildlife following an oil spill. The OWCN is kept in a
constant state of readiness for oiled wildlife events. This
involves having a network of well-stocked and properly-equipped
facilities, well trained staff with treatment and emergency
management skills, state of the art treatment protocols,
effective inter-agency communication, and a trained corps of
volunteers to help with the challenging work of rescuing,
rehabilitating and cleaning oiled animals.
The OWCN's primary funding source is not sustainable:
Currently the OWCN is funded mostly through the interest earned
on the trust fund, up to $2 million per year. The recent
economic downturn since 2008 has significantly impacted the
interest accrued on the trust fund. Due to declining interest
rates, the total interest earned on the trust fund has declined
considerably:
2007-2008: $2,088,363
2008-2009: $1,264,780
2
2009-2010: $365,933
Earned interest is expected to be even lower in 2010-11. Since
2009, there has not been enough money available from the trust
fund to fully fund the OWCN, diminishing their ability to
maintain readiness. This bill would create some flexibility in
funding the OWCN by allowing greater access to the OSPAF in in
addition to interest earned on the trust fund.
OSPAF is an appropriate funding source for OWCN
Funding all the OWCN activities through the OSPAF is consistent
with the existing allowable uses of the OSPAF. Specifically, the
OSPAF currently may be used "�t]o implement, install, and
maintain emergency programs, equipment, and facilities to
respond to, contain, and clean up oil spills and to ensure that
those operations will be carried out as intended." (Section
8670.40 (e)(5)) The mission of the OWCN fits within this
allowable use of the OSPAF.
Existing fiscal issues with OSPAF
OSPAF is currently underfunded, and consequently may not have
sufficient monies to be able to fully fund OWCN's incurred cost.
Assemblymember Huffman has proposed a bill this year (AB 1112)
which would raise the maximum fee collected on barrel of crude
oil or petroleum products from five to eight cents per barrel.
AB 1112 would allow the maximum fee to be adjusted for
inflation, as measured by the California Consumer Price Index.
SUPPORT
None Received
OPPOSITION
None Received
3