Existing law establishes the Oil Spill Response Trust Fund, a continuously appropriated fund, for, among other purposes, providing funds to cover promptly the costs of response, containment, and cleanup of oil spills into waters of the state, including damage assessment costs and wildlife rehabilitation. Existing law establishes the Hazardous Materials Response and Restoration Subaccount, a continuously appropriated subaccount in the Fish and Wildlife Pollution Account in the Fish and Game Preservation Fund, for, among other purposes, the protection, preservation, and restoration of fish and wildlife impacted by discharges of hazardous materials into the environment of the state.

This bill would authorize the administrator for oil spill response, upon making a specified finding, to loan moneys from the Oil Spill Response Trust Fund to the Hazardous Materials Response and Restoration Subaccount in an amount, not exceeding $500,000 annually, necessary to reimburse organizations providing wildlife rescue and rehabilitation services for expenses incurred by rescue and rehabilitation stations operations for wildlife injured by spill events of nonoil materials, thereby making an appropriation. The bill would prohibit the administrator from making a loan if the total amount of moneys made from these loans that has not been repaid exceeds $2,500,000. The bill would require the administrator to notify the Joint Legislative Budget Committee of the loan. The bill would require the administrator, through a public process, to develop and adopt guidelines identifying expenses eligible for reimbursement.

Existing law establishes the Oil Spill Response Trust Fund, a continuously appropriated fund, for, among other purposes, providing funds to cover promptly the costs of response, containment, and cleanup of oil spills into waters of the state, including damage assessment costs and wildlife rehabilitation. Existing law establishes the Hazardous Materials Response and Restoration Subaccount, a continuously appropriated subaccount in the Fish and Wildlife Pollution Account in the Fish and Game Preservation Fund, for, among other purposes, the protection, preservation, and restoration of fish and wildlife impacted by discharges of hazardous materials into the environment of the state.

This bill would authorize the administrator for oil spill response to loan moneys from the Oil Spill Response Trust Fund to the Hazardous Materials Response and Restoration Subaccount in an amount, not to exceed exceeding $500,000 annually, necessary to reimburse organizations providing wildlife rescue and rehabilitation services for expenses incurred by rescue and rehabilitation stations for wildlife injured by spill events of nonoil materials, thereby making an appropriation. The bill would require the administrator to notify the Joint Legislative Budget Committee of the loan. The bill would require the administrator, through a public process, to develop and adopt guidelines identifying expenses eligible for reimbursement.

Existing law establishes the Oil Spill Response Trust Fund, a continuously appropriated fund, for, among other purposes, providing funds to rescue, treat, rehabilitate, and dispose wildlife injured by an oil spill. cover promptly the costs of response, containment, and cleanup of oil spills into waters of the state, including damage assessment costs and wildlife rehabilitation. Existing law establishes the Hazardous Materials Response and Restoration Subaccount, a continuously appropriated subaccount in the Fish and Wildlife Pollution Account in the Fish and Game Preservation Fund, for, among other purposes, the protection, preservation, and restoration of fish and wildlife impacted by discharges of hazardous materials into the environment of the state.

This bill would authorize the administrator for oil spill response to loan moneys from the Oil Spill Response Trust Fund to the Hazardous Materials Response and Restoration Subaccount in an amount, not to exceed $500,000 annually, necessary to reimburse organizations providing wildlife rescue and rehabilitation centers services for expenses incurred by rescue and rehabilitation stations for wildlife injured by nonoil spill-related events, spill events of nonoil materials, thereby making an appropriation. The bill would require the administrator to notify the Joint Legislative Budget Committee of the loan. The bill would require the administrator, through a public process, to develop and adopt guidelines identifying expenses eligible for reimbursement.

Existing law establishes the Fish and Game Code.

This bill would rename the Fish and Game Code as the Fish and Wildlife Code and would require that any reference to the Fish and Game Code in that code or any other code means the Fish and Wildlife Code.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

SB 718 (Leno) - Hazardous Materials Response and Restoration Subaccount.

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

SB 718 would authorize a loan from the Oil Spill Response Trust Fund (trust fund) of up to $500,000 annually for the purpose of reimbursing organizations providing wildlife injured by non-petroleum spills.

Fiscal Impact:

• Up to $500,000 annually from the General Fund to reimburse nongovernmental organizations for wildlife rescue and rehabilitation operations.

• Minor and absorbable costs to the Oil Spill Prevention and Response Fund (special) to the Department of Fish and Wildlife (DFW) to develop the guidelines for the uses of the Hazardous Materials Response and Restoration Subaccount.

Background:

The Office of Oil Spill Prevention and Response (OSPR), led by the administrator, 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.

Existing law authorizes OSPR to impose a $0.25 per barrel fee on distributors, pipeline operators, refiners, and marine terminal operators that bring oil into the state. This fee is deposited into the Oil Spill Response Trust Fund (Trust Fund), until the balance reaches $55 million. Generally, monies in the Trust Fund are held in order 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.

Proposed Law:

• This bill would allow an annual loan of up to $500,000 from the trust fund to the Hazardous Materials Response and Restoration Subaccount (subaccount), which would be created by this bill, in order to reimburse organizations for expenses incurred by rescue and rehabilitation operations for wildlife injured by spills of non-petroleum events.

The loan would be made at the discretion of the administrator and would be subject to the following requirements:

• Any loan made to the subaccount would be required to be repaid, with interest, either by the responsible party, monies recovered by the responsible party, or the General Fund within five years.

• The total of unpaid loans would limited to $2,500,000, excluding interest owned on those loans.

• The administrator would be required to develop and adopt guidelines identifying expenses eligible for reimbursement from the subaccount.

• The administrator would be required to notify the Joint Legislative Budget Committee of any loans made at the time the loan is made.

Staff Comments:

Fundamentally, the loan created by this bill guarantees payments to nongovernmental organizations for wildlife rescue and rehabilitation either from the responsible party or from the General Fund. The trust fund is just an intermediary. From this perspective, when the administrator is determining what activities get reimbursed, the administrator is essentially deciding the distribution of General Fund, should no responsible party be identified. Therefore, while the immediate costs to the loan would be to the trust fund, the ultimate costs of this bill should be attributed to the General Fund.

Staff emphasizes that the loan permitted by this bill would only be for organizations providing wildlife rescue and rehabilitation. Presumably these organizations are nongovernmental organizations. State costs would still either need to come from other non-OSPR sources, most likely the Fish and Wildlife Pollution Account, which is oversubscribed and has no dedicated funding source. The Legislature and Governor could decide to appropriate General Fund monies to pay for state response costs, though the likelihood of this would be far from certain. In contrast, the Legislature would be bound to use the General Fund to repay the loan authorized in this bill should no responsible party be identified.

This bill is in response to a spill of a sticky “mystery goo” in the San Francisco Bay in January of this year. OSPR responded to the spill. However, once it was determined that the substance was not petroleum-base, funding for the respond had to be shifted away from OSPR’s funds, including the trust fund, which would have otherwise been available to reimburse non-governmental organizations for their response activities.

The trust fund is continuously appropriated to the Department of Fish and Wildlife. As this bill allows spending of the Trust Fund, it creates an appropriation.

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SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2015 - 2016 Regular

Bill No: SB 718

SUBJECT: Hazardous Materials Response and Restoration Subaccount

ANALYSIS:

Existing law:

1. Under the Lempert-Keene-Seastrand Oil Spill Prevention and Response Act (Act) (SB 2040), Chapter 1248, Statutes of 1990, the Office of Spill Prevention and Response (OSPR) in the Department of Fish and Wildlife (department) was created. OSPR’s mission is to provide the best achievable protection of California's natural resources and the public health and safety by preventing, preparing for, and responding to spills of oil and other related deleterious materials; and to restore and enhance affected resources.

2. The act establishes the Oil Spill Prevention and Administration Fund (OSPAF) which finances oil spill prevention and planning programs and the Oil Spill Response Trust Fund (OSRTF) which is used to provide the cash flow for the response to and clean-up of California’s oil spills and for certain wildlife care and spill-related damages.

3. OSRTF is funded by a $0.25 per barrel fee. This fee is assessed on distributors, pipeline operators, refiners, and marine terminal operators until the fund balance reaches its statutory target of $54.8 million. Fee collection resumes only when the fund contains less than 95% of this designated funding level. This automatic replenishment is designed to prevent any oil spill response from being limited by available funds.

4. The Oiled Wildlife Care Network (OWCN) rescues and rehabilitates wildlife affected by coastal oil spills and has more than 30 member organizations and affiliated agencies. It maintains more than 12 specialized facilities in a constant state of readiness, and has saved more than 14,000 oiled birds and mammals affected by more than 80 oil spills since 1995. It was formed pursuant to the act in collaboration with the department in order to provide the most proactive response in the world to oiled wildlife. OWCN response to an oil spill is funded through the OSRTF.
   
   

This bill:

Allows the OSPR administrator to borrow up to $500,000 annually from the OSTRF and move it to the Hazardous Materials Response and Restoration Subaccount in order to reimburse wildlife rescue and rehabilitation organizations for their response to spills of non-petroleum materials that harm wildlife, as specified. The loan would be repaid with interest no later than 10 years after it is issued either from funds recovered from the responsible party or from the general fund. The administrator would be required to notify the Legislature of the loan.

Background

1. Mystery Contamination in the San Francisco Bay.

In mid-January 2015, a spill of a sticky “mystery goo” in San Francisco Bay coated more than 600 waterfowl and killed over half of them. OSPR responded to the spill. However, when it was determined that the mystery goo was not petroleum-based, the funding for the department’s response was shifted away from OSPR moneys. Additionally, OSPR funds were not available through the OWCN to support wildlife rescue and rehabilitation.

According to news reports, a local wildlife rescue and rehabilitation organization, the International Bird Rescue, has spent over $150,000 to respond to the spill. This organization has released over 100 waterfowl back to the wild following rescue and rehabilitation.

Efforts continue to identify the mystery goo and determine the identity of the responsible party. According to news reports several laboratories are involved in the effort to determine the chemical composition of the goo.

Comments

1. Purpose of Bill.

The author states that “while California has a robust oil spill response system, non-petroleum-based substances are not covered by existing oil spill response laws, and without a party to hold responsible, local non-profit organizations have had to spend scarce resources (up to $300,000 by some estimates) on wildlife cleanup and rehabilitation without state assistance. Had the substance been found to be petroleum-based, OSRTF resources would have been available for cleanup purposes, at minimal cost to the state.

“SB 718 addresses the gap that currently exists in the authority and funding mechanisms necessary to respond to spill events where the material spilled has yet to be identified or is found to be non-petroleum based, and where no responsible party has been determined. In these rare instances, OSPR needs clear authority to respond and borrow the necessary funding for wildlife care until such time as a responsible party is found and required to reimburse the state with interest.

“This bill requires notification to the Joint Legislative Budget Committee (JLBC) if such borrowing occurs in order to ensure Legislative oversight. The responsible party for the spill, once identified, is required to repay any loan made pursuant to this bill with interest, and all loans must be repaid within ten years.

“This bill is a modest, but needed measure that will fill a gap in existing spill response laws without creating a new fee, and will help protect California’s treasured wildlife.”

2. Exposed Vulnerability of the State.

In 2014, in the wake of several major rail accidents across the United States and Canada related to the influx of crude oil transport by rail, the Senate conducted an oversight hearing to discuss the state’s preparedness for an incident should it occur in California. That hearing highlighted the need to bolster our emergency response and cleanup resources.

The 2014-15 Budget Act augmented OSPR with additional resources and funding to better address oil incidents. Additional funds and resources were also made available for equipment for emergency responders.

However, the hearing also highlighted that in addition to the influx of crude oil coming into the state by rail, there is also greater quantities of other hazardous substances being transported by train into and across the state. These substances also pose a threat to the waters of California, however, would not be addressed by the OSPR Budget augmentations mentioned above.

The non-petroleum incident in the San Francisco Bay further highlights the inconsistent governmental and funding resources given to petroleum-based incidents versus some other contamination into water.

While it is not specifically related to this legislation, the Senate may wish to further explore the programmatic augmentations that may be needed to be better prepared for any incident – petroleum or otherwise.

SOURCE:

Audubon California (co-sponsor)

San Francisco Baykeeper (co-sponsor)

SUPPORT:

Buena Vista Audubon Society

California Coastkeeper Alliance

California Environmental Health Initiative

Citizens Committee to Complete the Refuge

Clean Water Action

Defenders of Wildlife

Ducks Unlimited

Environment California

Five Creeks

Golden Gate Audubon Society

International Bird Rescue

Madrone Audubon Society

Ohlone Audubon Society

San Francisco Bay Joint Venture

Santa Clara Valley Audubon Society

Save the Bay

Sierra Club California

The Fund for Animals Wildlife Center

The Humane Society of the United States

The Nature Conservancy

West Marin Environmental Action Committee

Wildcare

OPPOSITION:

None on file

ARGUMENTS IN SUPPORT:

According to Audubon California, “It is essential that the [department] and OSPR have the necessary tools and funding to adequately respond to wildlife emergencies during all significant spills, including those that are not petroleum-based.”

They continue, “SB 718 will allow OSPR to protect wildlife that come into harm by way of non-petroleum based substances, like the mysterious grey goo that was spilled in San Francisco Bay. The bill would close the hole in California law that hinders wildlife response during non-petroleum based spills.”

The author notes that “without a party to hold responsible, non-profit organizations have had to spend scarce resources (up to $300,000 by some estimates) on wildlife cleanup and rehabilitation without state assistance.” Senator Leno adds, “had the substance been found to be petroleum-based OSRTF resources would have been available for cleanup purposes.”

DOUBLE REFERRAL:

This measure was heard in Senate Natural Resources and Water Committee on April 14, 2015, and passed out of committee with a vote of 6-2.

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SENATE COMMITTEE ON NATURAL RESOURCES AND WATER

Senator Fran Pavley, Chair

2015 - 2016 Regular

Bill No: SB 718 Hearing Date: April 14, 2015

Subject: Hazardous Materials Response and Restoration Subaccount.

BACKGROUND AND EXISTING LAW

1. In response to concern following significant oil spills, the Legislature passed the Lempert-Keene-Seastrand Oil Spill Prevention and Response Act (Act) (SB 2040, c. 1248, Statutes of 1990) (Government Code (GOV) §§8670.1 et seq., and others). The act created the Office of Spill Prevention and Response (OSPR) in the Department of Fish and Wildlife (department). OSPR’s mission is to provide the best achievable protection (GOV §8670.3) of California's natural resources and the public health and safety by preventing, preparing for, and responding to spills of oil and other related deleterious materials; and to restore and enhance affected resources.

2. The act establishes the Oil Spill Prevention and Administration Fund (OSPAF) which finances oil spill prevention and planning programs and the Oil Spill Response Trust Fund (OSRTF) which is used to provide the cash flow for the response to and clean-up of California’s oil spills and for certain wildlife care and spill-related damages.

3. OSRTF is funded by a $0.25 per barrel fee. This fee is assessed on distributors, pipeline operators, refiners, and marine terminal operators until the fund balance reaches its statutory target of $54.8 million. Fee collection resumes only when the fund contains less than 95% of this designated funding level. This automatic replenishment is designed to prevent any oil spill response from being limited by available funds.

4. The Oiled Wildlife Care Network (OWCN) rescues and rehabilitates wildlife affected by coastal oil spills and has more than 30 member organizations and affiliated agencies. It maintains more than 12 specialized facilities in a constant state of readiness, and has saved more than 14,000 oiled birds and mammals affected by more than 80 oil spills since 1995. It was formed pursuant to the act in collaboration with the department in order to provide the most proactive response in the world to oiled wildlife. OWCN response to an oil spill is funded through the OSRTF.

5. In mid-January 2015, a spill of a sticky “mystery goo” in San Francisco Bay coated more than 600 waterfowl and killed over half of them. OSPR responded to the spill. However, when it was determined that the mystery goo was not petroleum-based, the funding for the department’s response was shifted away from OSPR monies. Additionally, OSPR funds were not available through the OWCN to support wildlife rescue and rehabilitation. According to news reports, a local wildlife rescue and rehabilitation organization, the International Bird Rescue, has spent over $150,000 to respond to the spill. This organization has released over 100 waterfowl back to the wild following rescue and rehabilitation.

PROPOSED LAW

This bill would allow the OSPR administrator to borrow up to $500,000 annually from the OSTRF and move it to the Hazardous Materials Response and Restoration Subaccount in order to reimburse wildlife rescue and rehabilitation organizations for their response to spills of non-petroleum materials that harm wildlife, as specified. The loan would be repaid with interest no later than 10 years after it is issued either from funds recovered from the responsible party or from the general fund. The administrator would be required to notify the Legislature of the loan.

ARGUMENTS IN SUPPORT

According to Audobon California, “It is essential that the [department] and OSPR have the necessary tools and funding to adequately respond to wildlife emergencies during all significant spills, including those that are not petroleum-based.”

They continue, “SB 718 will allow OSPR to protect wildlife that come into harm by way of non-petroleum based substances, like the mysterious grey goo that was spilled in San Francisco Bay. The bill would close the hole in California law that hinders wildlife response during non-petroleum based spills.”

The author notes that “without a party to hold responsible, non-profit organizations have had to spend scarce resources (up to $300,000 by some estimates) on wildlife cleanup and rehabilitation without state assistance.” Senator Leno adds, “had the substance been found to be petroleum-based OSRTF resources would have been available for cleanup purposes.”

ARGUMENTS IN OPPOSITION

None received

COMMENTS

OSTRF funds been used for non-oil spill response activities in the past. In 2011, $40 million was transferred from the OSTRF and loaned to the general fund. This loan is still outstanding. OSTRF funds must be repaid for non-OSPR-related activities as funding is through a dedicated fee.

A mechanism exists for the department to fund its own hazardous material spill response. According to the department, when it became evident that the mystery goo was not petroleum-based, it funded its response from the Fish and Wildlife Pollution Account. This account has no dedicated funding source and is typically over-subscribed. Whether wildlife rescue and rehabilitation organizations would be reimbursed for costs associated with rescuing and rehabilitating wildlife from these spills would depend upon the situation and available funding. It is not clear that these organizations have been regularly reimbursed in the past for non-OWCN response.

Does the department always recover funds from responsible parties? It depends. Depending upon how charges are brought and by whom the department may or may not recover any funds – even in a successful prosecution or settlement negotiation.

Mystery goo update. Efforts continue to identify the mystery goo and determine the identity of the responsible party. According to news reports several laboratories are involved in the effort to determine the chemical composition of the goo.

Double-referral pending. The Senate Committees on Natural Resources and Water and Environmental Quality share jurisdiction over OSPR. Therefore, if this bill passes this committee, it will be referred to the Committee on Rules which will consider the re-referral request of the Committee on Environmental Quality.

SUPPORT

Audobon California (co-sponsor)

San Francisco Baykeeper (co-sponsor)

Buena Vista Audubon Society

California Coastkeeper Alliance

California Environmental Health Initiative

Citizens Committee to Complete the Refuge

Clean Water Action

Defenders of Wildlife

Ducks Unlimited

Environment California

Five Creeks

The Fund for Animals Wildlife Center

Golden Gate Audubon Society

The Humane Society of the United States

International Bird Rescue

Madrone Audubon Society

Morro Coast Audubon Society

The Nature Conservancy

Ohlone Audubon Society

San Francisco Bay Joint Venture

Santa Clara Valley Audubon Society

Save the Bay

Sierra Club California

West Marin Environmental Action Committee

OPPOSITION

None Received

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