BILL ANALYSIS �
SB 1319
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Date of Hearing: June 23, 2014
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
SB 1319 (Pavley) - As Amended: June 18, 2014
SENATE VOTE : 23-12
SUBJECT : Oil spill prevention and response
SUMMARY : This bill makes various changes to existing law
related to oil spill prevention, planning, emergency response,
including transportation of oil by rail. Specifically, this
bill :
1)The majority of the provisions are outside the jurisdiction of
this committee. They provide authority to annually adjust the
per-barrel fee on crude oil or petroleum products to support
the Office of Oil Spill Prevention and Response (OSPR)
programs, impose the fee additionally on pipeline operators,
and imposes other requirements related to preparing for
emergencies in the event of inland oil spills.
2)Relevant to Utilities and Commerce Committee Jurisdiction this
bill:
(a) Requires the PUC to expand inspections on bridges and
grade crossing used to transport oil and at oil unloading
facilities and require the PUC to regulate essential local
safety hazards for oil transport more stringently than
federal law.
(b) Expands the PUC's annual reporting requirement to the
Legislature to include information on the timing, nature,
and status of remediation of defects or violations of
federal and state law related to oil transport and
unloading.
(c) Authorizes the OSPR to obtain confidential information
from the OES, CEC, and other regulators to carry out duties
and for OSPR to develop procedures for handling the
information consistent with state and federal law.
EXISTING LAW
a)Requires PUC rail safety inspectors to be responsible for
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inspection, surveillance, and investigation of the rights of
way, facilities, equipment, and operations of railroads and
public mass transit guideways. (Public Utilities Code 309.7)
b)Requires PUC rail safety inspectors to investigate accidents
including derailments; collisions between trains and other
trains, motor vehicles, bicyclists, pedestrians, and
obstructions; and hazardous materials releases from trains.
(Public Utilities Code 315)
c)Supports railroad safety activities through fees collected
from California railroads based on a percentage of annual
gross revenues. (Public Utilities Code 421 and 422).
d)Requires the PUC to establish, by regulation, a minimum
inspection standard to ensure that at the time of inspection,
that railroad locomotives, equipment, and facilities located
in the class I railroad yards will be inspected not less
frequently than every 120 days, and inspection of all branch
and main line track not less frequently than every 12 months
(Public Utilities Code 765.5(d))
e)Requires PUC rail safety inspectors to conduct focused
inspections of railroad yards and track; operating practices;
signal and train control; hazardous materials and railroad
equipment. (Public Utilities Code 765.5(e))
f)Requires the PUC to employ a sufficient number of
federally-certified inspectors to ensure that railroad
locomotives and equipment and facilities located in Class I
railroad yards in California are inspected not less frequently
than once every 120 days, and that all main and branch line
tracks are inspected not less frequently than once every 12
months. (Public Utilities Code 309.7 and 765.5(d))
g)Provides PUC the responsibility to safeguard public health and
safety by specifying the manner in which railroads construct,
maintain, and operate their systems, equipment, apparatus,
tracks, and premises. (Public Utilities Code 768)
h)Requires the PUC Safety and Enforcement Division to
investigate any incident that results in a notification, and
report its findings concerning the cause or causes to the
commission. (Public Utilities Code 7661)
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i)Requires railroads to provide immediate notification of
accidents and incidents resulting in a release or threatened
release of hazardous material to relevant agencies. (Public
Utilities Code 7672.5)
j)Requires all rail operators to provide risk assessments to the
PUC and Department of Homeland Security (Public Utilities Code
7665-7667)
aa)Requires annual reporting by the PUC for sites on railroad
lines in the state that the PUC finds to be hazardous. (Public
Utilities Code 7711)
bb)Requires the CPUC to collect and analyze near-miss data.
(Public Utilities Code 7711.1)
cc)Requires oil producers and fuel product refiners,
transporters, storers, wholesalers and marketers to report
information on receipts, shipments, inventories and incidents
to the California Energy Commission (CEC). (Public Resources
Code 25350)
dd)Requires any information presented in confidence to the CEC
to be aggregated to the extent necessary to assure
confidentiality if the information would result in unfair
competitive disadvantage. (Public Resources Code 25364)
ee)Establishes the Office of OSPR in the Department of Fish and
Wildlife (DFW).
Requires the OSPR administrator to direct prevention,
removal, abatement, response, containment, and cleanup
efforts with regard to all aspects of any oil spill in
marine waters of the state.
Established the Oil Spill Prevention and Administrative
Fund (OSPAF) and the Oil Spill Response Trust Fund (OSRTF)
to pay for OSPR activities.
Requires the Office of Emergency Services (OES) to be
contacted in the event of an oil spill.
(Government Code 8670.1 et seq., and others)
a)Establishes the Office of Emergency Services (OES). OES is
responsible for:
Coordinating response to major disasters in support of
local Government.
Assuring the state's readiness to respond to and recover
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from all hazards (natural, manmade, war-caused emergencies
and disasters).
Assisting local governments in their emergency
preparedness, response, recovery, and hazard mitigation
efforts.
(Government Code 8550 et seq.)
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's Statement . "In California there have been 34 railroad
oil spills since January 2013, more than four times the number
of spills in the previous 10 years combined, according to
federal data. Crude oil trains run through some of the
state's most densely populated areas, and this trend will
increase with the completion of at least six new oil-by-rail
projects in California."
"California is seeing a huge shift in the way we import oil,
and we need to address the new and unique hazards of
crude-by-rail transportation. Updating the oil spill
prevention and response program is an important step, and I
look forward to working with the Brown Administration, my
colleagues in the Legislature and our local and federal
partners to identify what additional measures may be needed to
protect Californians from this emerging public safety threat."
"Given the risks, California needs to take responsible steps
to prevent, prepare for and respond to crude oil train
accidents."
2)Transportation of oil. OSPR states that 65% of California's
crude oil supply arrives by tankers originating from Alaska or
overseas. The remaining 35% is supplied by pipeline within
California. With the expansion of oil drilling in the Baaken
region of North Dakota and the Tar Sands in Canada, and the
subsequent transportation of crude oil by train, a shift is
occurring in the source of California oil imports. OSPR states
that in the future, around 25% of California's crude oil
supply would arrive by rail. This would be accompanied by a
dramatic reduction in the amount of oil arriving by tanker
(43% predicted supply).
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The rapid expansion of crude oil transportation by rail,
coupled with a series of derailments and explosions over the
past year, has raised concerns about the safety of rail
transport of hazardous materials. According to data from the
Pipeline and Hazardous Materials Safety Administration
(PHMSA), the amount of crude oil spilled from rail cars in
2013 exceeded that spilled in the preceding four decades. In
2013, 1.15 million gallons of crude oil were spilled, compared
with about 800,000 gallons spilled from rail cars between 1975
and 2012. One of the most serious of these recent accidents
was the Lac-M�gantic derailment that occurred in the town of
Lac-M�gantic in Canada on July 6, 2013. In this accident, a
74-car freight train carrying crude oil from the Bakken
formation derailed in the downtown area, killing 47 people and
destroying more than 30 buildings when multiple tank cars
exploded and burned. In addition, the Chaudi�re River was
contaminated by 26,000 gallons of crude oil.
3)Railroads and the PUC. The California Railroad Commission was
created in the 1880s to regulate railroads operating in
California in response to public outcry over prices charged
and monopoly practices of the railroad operators. The
California Railroad Commission later became the California
Public Utilities as regulatory authority over other utilities
was added to the Railroad Commission's responsibilities.
4)PUC and rail safety. Currently the PUC has safety regulatory
authority over 9,000 miles of railroad track, 500 miles of
rail transit track or guideways, and 13,500 miles of rail
crossing. They also have authority over the future high speed
rail segments. In addition, they enforce safety regulations
over railroads, including freight and short rail companies,
passenger (Amtrak, high speed rail), commuter (Metrolink,
Altamont, Caltrain, etc.), and guideway transit (BART, LA
Metro, Sacramento RT, San Francisco Muni, San Diego Trolley,
etc.).
Railroad bridges carry thousands of rail cars containing
hazardous materials and thousands of passengers daily.
According to the PUC, the federal government has established
regulations for bridges and relies on railroads to inspect
their bridges and prepare Bridge Management Plans that are to
be made available to the federal government upon request.
California bridges are not inspected by any entity in the
state government.
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Like most transportation infrastructure, the more a bridge is
used with greater frequency and with heavier loads, the more
the bridge integrity is potentially compromised. Due to the
frenetic building of railroads during the late 19th and early
20th centuries, actual railroad bridgeplans or records are
either absent or unreliable. Often, these bridges now reside
on properties owned by smaller short line railroads that may
not be willing or able to acquire the amount of capital needed
to repair or replace degrading bridges. It is unclear if the
railroads are able to adequately identify, with a high degree
of certainty, the year, model, construction materials, and
maximum weight the bridge can carry, as well as maintenance
programs and practices.
The anticipated increase in oil-by-rail shipments into and
within California increases the potential for accidents or
incidents unless safety inspections and remediation are put in
place.
Under federal law, the federal government develops a national
and regional response capability for spills from oil or other
hazardous substances; promotes coordination among the
hierarchy of emergency response organizations and response or
contingency plans; requires hazardous shipments to be
inspected when they are accepted for transportation or placed
in a train in conjunction with other routine inspections; and
allows states to develop and enforce their own hazardous
regulatory scheme as long as the regulation is consistent with
federal law.
The PUC rail safety program is located within the PUC Safety
and Enforcement Division. According to the recent State
Auditor report of the PUC Transportation Division,<1> 95 full
time employees are assigned the PUC rail programs (the State
Auditor report on the PUC's oversight of charter-party
carriers and passenger stage corporations [passenger carriers]
found that the PUC fails to adequately ensure consumers'
transportation safety and does not appropriately collect and
spend fees from passenger carriers).
5)Sufficient inspection resources . Current statute indicates the
PUC is to employ a sufficient number of certified employees in
conduct inspections. The PUC should consider whether it has
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<1> http://www.auditor.ca.gov/pdfs/reports/2013-130.pdf
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sufficient resources to carry out the requisite inspections
and apprise the Legislature if the PUC has sufficient
flexibility in inspection resources to address public safety
needs.
6)Author request for a technical amendment . The amendments made
on June 18, 2014 inadvertently deleted a word. The author has
requested an amendment to correct this error.
Page 26, line 19, insert "transport" as follows:
(c) For purposes of this section, "transport" includes
transport line or planned transport by vessel, truck,
railroad, or pipeline.
7)Energy Commission Petroleum Industry Information Reporting Act
(PIIRA). Enacted in 1980, PIIRA requires qualifying petroleum
industry companies to submit weekly, monthly, and annual data
to the California Energy Commission. Data collection began in
1982. In 2006, the PIIRA regulations were amended to increase
the frequency and level of detail in the information reported
by the industry.
The author may wish to consider an amendment to require that
any data shared by the CEC will be held at the same level of
confidentiality that is specified in Section 25364 of the
Public Resources Code. Specifically:
SEC. 8. Section 8670.6.5 is added to the Government Code, to
read:
8670.6.5. The administrator may obtain confidential and other
information protected from public disclosure from the Office
of Emergency Services, the State Energy Resources Conservation
and Development Commission, and other regulators, as
necessary, in order for the administrator to carry out his or
her duties. The administrator shall develop procedures for
handling the obtained information consistent with the
California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 , section 25364 of the
Public Resources Code, and federal law.
NEW SECTION amending section 25364 of the Public Resources
Code.
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25364. (a) Any person required to present information to the
commission pursuant to Section 25354 may request that specific
information be held in confidence. Information requested to be
held in confidence shall be presumed to be confidential.
(b) Information presented to the commission pursuant to
Section 25354 shall be held in confidence by the commission or
aggregated to the extent necessary to assure confidentiality
if public disclosure of the specific information or data would
result in unfair competitive disadvantage to the person
supplying the information.
(c) (1) Whenever the commission receives a request to publicly
disclose unaggregated information, or otherwise proposes to
publicly disclose information submitted pursuant to Section
25354, notice of the request or proposal shall be provided to
the person submitting the information. The notice shall
indicate the form in which the information is to be released.
Upon receipt of notice, the person submitting the information
shall have 10 working days in which to respond to the notice
to justify the claim of confidentiality on each specific item
of information covered by the notice on the basis that public
disclosure of the specific information would result in unfair
competitive disadvantage to the person supplying the
information.
(2) The commission shall consider the respondent's submittal
in determining whether to publicly disclose the information
submitted to it to which a claim of confidentiality is made.
The commission shall issue a written decision which sets forth
its reasons for making the determination whether each item of
information for which a claim of confidentiality is made shall
remain confidential or shall be publicly disclosed.
(d) The commission shall not make public disclosure of
information submitted to it pursuant to Section 25354 within
10 working days after the commission has issued its written
decision required in this section.
(e) No information submitted to the commission pursuant to
Section 25354 shall be deemed confidential if the person
submitting the information or data has made it public.
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(f) With respect to petroleum products and blendstocks
reported by type pursuant to paragraph (1) or (2) of
subdivision (a) of Section 25354 and information provided
pursuant to subdivision (h) or (i) of Section 25354, neither
the commission nor any employee of the commission may do any
of the following:
(1) Use the information furnished under paragraph (1) or (2)
of subdivision (a) of Section 25354 or under subdivision (h)
or (i) of Section 25354 for any purpose other than the
statistical purposes for which it is supplied.
(2) Make any publication whereby the information furnished by
any particular establishment or individual under paragraph (1)
or (2) of subdivision (a) of Section 25354 or under
subdivision (h) or (i) of Section 25354 can be identified.
(3) Permit anyone other than commission members and employees
of the commission to examine the individual reports provided
under paragraph (1) or (2) of subdivision (a) of Section 25354
or under subdivision (h) or (i) of Section 25354.
(g) Notwithstanding any other provision of law, the commission
may disclose confidential information received pursuant to
subdivision (a) of Section 25304 or Section 25354 to the State
Air Resources Board if the state board agrees to keep the
information confidential. With respect to the information it
receives, the state board shall be subject to all pertinent
provisions of this section.
(h) Notwithstanding any other provision of law, the commission
may disclose confidential information received pursuant to
subdivision (a) of Section 25304 or Section 25354 to the
administrator for oil spill response appointed by the Governor
pursuant to Section 8670.4 if the administrator agrees to keep
the information confidential. With respect to the information
it receives, the administrator shall be subject to all
pertinent provisions of this section.
8)Related legislation.
a) SB 861 (2014, Budget Resources Trailer Bill) includes
provisions addressing OSPR responsibilities over inland oil
spill response, local emergency responder training, and
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related provisions regarding criminal and civil penalties
and new establishing new regulations. (Status: ordered to
engrossing and enrolling)
b) AB 380 (2014, Dickinson) would address sensitive rail
information being provided to the Office of Emergency
Services. (Status; in Senate Appropriations)
c) SB 506 (2014, Hill) would create a Railroad Tank Car
Hazardous Materials Safety Fund which would establish a set
fee per loaded tank car to finance emergency response for
rail accidents and releases of hazardous materials.
(Status: in Assembly Rules)
d) AB 881 (2013, Chesbro) would raise the OSPR per barrel
fee to pay for the marine program. (Status: Senate inactive
file)
1)Support and Opposition.
Supports argue that SB 1319 will assist with responding to oil
spills, should they occur and reduce new risks from crude oil
transport by rail.
Opponents argue that SB 1319 is overly broad and allows an
unlimited fee for funding the programs administered by OSPR;
raises issues regarding possible federal preemption; adds more
requirements beyond what was enacted in the 2014 Budget
Trailer Bill; and issues with programs with fiscal
accountability and operational issues at OSPR that have been
identified by past State audits.
One opponent raised concern about an exemption from taking
actions to meet or exceed the state contract disabled veteran
business enterprise goals. This provision is existing law. SB
1319 does not modify this provision which allows OSPR to
contract for services in response to an actual oil spill where
time is of the essence and specialized services are needed.
REGISTERED SUPPORT / OPPOSITION :
Support
Audubon California
California Association of Professional Scientists (CAPS)
California Fire Chiefs Association (CalChiefs)
California League of Conservation Voters
California Trout
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Clean Water Action
Defenders of Wildlife
Environment California
Environmental Working Group
Heal the Bay
Natural Resources Defense Council (NRDC)
San Francisco Baykeeper
Surfrider Foundation
Opposition
BNSF Railway Company
California Chamber of Commerce
California Independent Petroleum Association
California Manufacturers & Technology Association (CMTA)
Union Pacific Railroad Company
Veterans Caucus of the California Democratic Party
Western States Petroleum Association
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083