BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 1192 (Evans) - Oil spill prevention and administrative fee.
Amended: March 29, 2012 Policy Vote: NR&W 6-2
Urgency: No Mandate: No
Hearing Date: May 24, 2012 Consultant: Marie Liu
SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Bill Summary: SB 1192 would remove the restrictions on the types
of activities by the Oiled Wildlife Care Network that can be
paid for by the Oil Spill Prevention and Administrative Fund.
Fiscal Impact:
Ongoing cost pressures of $2 million to the Oil Spill
Prevention and Administrative Fund (special fund) beginning
in 2013 for the activities of the Oiled Wildlife Care
Network.
Ongoing revenues of $2 million to the Oil Spill Prevention
and Administrative Fund beginning in 2013 from raising the
per-barrel fee and the minimum non-tank vessel fee.
Background: Under current law, the Office of Oil Spill
Prevention and Response (OSPR) is responsible for regulating the
prevention, response, removal, and cleanup of oil spills in
state waters. Under this authority, OSPR requires vessel
operators to take certain precautions and to undertake specific
containment and cleanup actions in response to an oil spill.
Current law requires OSPR to establish an Oiled Wildlife Care
Network (OWCN), to be available to respond to wildlife that have
been impacted by oil spills. OWCN facilities are maintained in a
constant state of readiness and are stocked with emergency
medical equipment and supplies and staffed by local volunteers
specifically trained in the care of oiled birds and marine
mammals. The OWCN also funds scientific research through a
competitive grants program to increase knowledge and
understanding of the consequences of oil exposure and to improve
the quality of response technology for oil spills.
Current law authorizes OSPR to impose a fee on imported oil up
to $0.065 per barrel until 2015 and $0.05 per barrel after 2015,
to pay for OSPR's costs to prevent and respond to oil spills in
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state waters. Fee revenues are deposited in the Oil Spill
Prevention and Administration Fund (Administration Fund). Those
funds support OSPR's oil spill prevention and response readiness
responsibilities, including for the "training and field
collection and such and rescue activities" of the OWCN at a cost
of about $40,000 per year.
Current law also authorizes OSPR to impose a $0.25 per barrel
fee, deposited into the Oil Spill Response Trust Fund (Trust
Fund), until the balance reaches $55 million. Generally, monies
in the Trust Fund are held to pay for the costs of responding to
an oil spill when the responsible party cannot be identified, in
the interim while the responsible party is identified, or if the
responsible party is unable to pay for the response costs. Up to
$2 million in interest accrued on the Trust Fund may be used to
support activities of the OWCN.
Proposed Law: This bill would allow the Administrative Fund to
be used to fund all activities of the OWCN.
Related Legislation: The current version of this bill is
essentially identical to the substantive language in SB 584
(Evans) 2011, which was held on suspense.
Staff Comments: In the past, the OWCN has received the maximum
$2 million in funding from Trust Fund interest. However, Trust
Fund interest earnings have recently dropped dramatically due to
the economic downturn and a loan to the General Fund so that
only $365,000 and $265,000 in interest was generated in FY
2009-10 and FY 2010-11 respectively. Only $63,000 is expected in
interest this year with further declines expected by OSPR.
The decrease in Trust Fund interest has left the OWCN
underfunded. By allowing the OWCN to also receive funds from the
Administrative Fund, this bill aims to fully fund the OWCN.
There seems to be widespread agreement, including by OSPR, that
the OWCN needs approximately $2 million in funding in order to
maintain proper readiness in the event of an oil spill. However,
staff notes that the Administrative Fund has a structural
deficit of $3 million despite a modest and temporary increase in
the per barrel fee until 2015. This bill will increase cost
pressures on the Administrative Fund.
Proposed Author Amendments: Permanently increase the
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Administrative Fund per barrel fee by three-tenths of a cent and
the nontank vessel fee to a minimum of $3,500 to increase
revenues to the Administrative Fund in an amount equal to full
funding for the OWCN. Transfers funds from the Administration
Fund to the Trust Fund so that funding for the OWCN comes from
the Trust Fund.
Committee Amendments: Permanently increase the Administrative
Fund per barrel fee by three-tenths of a cent and the nontank
vessel fee to a minimum of $3,500 to increase revenues to the
Administrative Fund in an amount equal to full funding for the
OWCN.