BILL ANALYSIS Ó AB 102 Page A Date of Hearing: April 28, 2015 ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS Luis Alejo, Chair AB 102 (Rodriguez) - As Amended March 26, 2015 SUBJECT: Railroad and surface transportation safety and emergency planning and response: hazardous materials SUMMARY: Creates the Regional Railroad and Surface Transportation Accident Preparedness and Immediate Response Force (Response Force) in the Office of Emergency Services (OES). Requires the Response Force to be responsible for providing regional and onsite response capabilities in the event of a release of hazardous materials from a railroad tank car, a railroad accident involving a tank car, or a hazardous material release from a truck. Establishes a fee (Fee) paid by each person owning hazardous materials that are transported by rail or truck in California to fund OES activities. Specifically, this bill: 1)Requires the Response Force to be responsible for providing regional and onsite response capabilities in the event of a release of hazardous materials from a railroad tank car, a railroad accident involving a tank car, or a hazardous material release from a truck, and for implementing the state regional railroad accident preparedness and immediate response plan for releases of hazardous materials from a railroad or other surface transportation. AB 102 Page B 2)Requires the Response Force to consist of representatives of all of the following: Department of Fish and Wildlife; California Environmental Protection Agency; State Air Resources Board; Department of Resources Recycling and Recovery; California Regional Water Quality Control Boards; Department of Toxic Substances Control; Department of Pesticide Regulation; Office of Environmental Health Hazard Assessment; State Department of Public Health; Department of the California Highway Patrol; Department of Food and Agriculture; Department of Forestry and Fire Protection; Department of Parks and Recreation; Public Utilities Commission; State Fire Marshal; Emergency Medical Services Authority; California National Guard; and, any other potentially affected state, local, or federal agency, as determined by OES. 3)Requires OES to develop a Railroad and Surface Transportation Accident Plan in cooperation with the Response Force members and requires the plan to become an annex to the state emergency plan. 4)Creates the Regional Railroad and Surface Transportation Accident Preparedness and Immediate Response Fund (Fund). Requires moneys in the Fund, upon appropriation by the Legislature, to be used by OES to pay for the following purposes related to the transportation of hazardous materials: a) Reimbursement of California High-Cost Fund-B Administrative Committee fund for moneys previously loaned to OES; b) Planning, developing, and maintaining a capability for emergency response to accidents including the risks of explosions and fires involving tank cars or trucks carrying hazardous materials; c) Planning, developing, and maintaining a capability for emergency response to releases of hazardous materials from tank cars and trucks including reducing the harmful effects AB 102 Page C of exposure of those materials to humans and the environment; d) Creation, support, maintenance, and implementation of the Response Force; e) Acquisition and maintenance of specialized equipment and supplies used to respond to a hazardous materials release from accidents involving trucks and railroad accidents involving a tank car; f) Support of specialized training facilities to prepare for and respond to a hazardous materials release from a railroad tank car or a railroad accident involving a tank car; g) Creation and support of a regional, state level, and local emergency response team to provide immediate onsite response capabilities in the event of large scale releases of hazardous materials from a railroad tank car or a railroad accident involving a tank car; h) Support for specialized training for state and local emergency response officials in techniques for prevention of, and response to, release of hazardous materials from a railroad tank car or trucks; and, i) Provides that fees paid into this Fund by the owner of hazardous materials, which is also subject to the oil spill prevention and administration fee, may reduce their payments to the oil spill prevention and administration fee by an amount equal to the Fund payments. 5)Requires that the amount available for appropriation from the Fund does not exceed $10 million in any calendar year. 6)Requires OES to establish a schedule of fees to determine the amount of the Fee that shall be paid by each person owning hazardous materials that are transported by rail in California AB 102 Page D in an amount sufficient to fund the appropriation from the Fund, to reimburse the Fund for any moneys loaned, and to maintain a prudent reserve of two months' operating costs. Requires the Fee to be based on each loaded tank car and collected in a manner specified. Requires the Fee to be fair, as specified by federal law, and reflect the proportionate risks to the public safety and environment resulting from a release of different hazardous materials and the expense of preparing to respond to those varying risks. Prohibits the Fee to exceed the reasonable regulatory costs to the state. Requires OES to set the Fee consistent with Proposition 26 of 2010. 7)Allows OES to authorize payment of the Fee through contributions of in kind of equipment, materials, or services. 8)Defines "hazardous materials" as a material that the United States Department of Transportation has designated as a hazardous material for purposes of transportation in Part 172 of Title 49 of the Code of Federal Regulations. EXISTING STATE LAW: 1)Establishes, under the Lempert-Keene Seastrand Oil Prevention and Response Act, the Office of Oil Spill Prevention and Response (OSPR) as the primary authority to direct prevention, removal, abatement, response, containment, and cleanup efforts with regard to any oil spill in the marine and inland waters of the state. 2)Provides that OES is the central point in state government for the emergency reporting of spills, unauthorized releases, or other accidental releases of hazardous materials and shall AB 102 Page E coordinate the notification of other state and local administering agencies that may be required to respond to the accidental releases. EXISTING FEDERAL LAW: 1)Requires each state to have a State Emergency Response Commission (SERC) to coordinate and supervise federal programs related to hazardous material emergencies and ensure public availability of appropriate chemical information. (OES is the chair of the California SERC.) 2)Requires that laws related to railroad safety be nationally uniform "to the extent practicable" and allow the state to adopt an additional or more stringent law under certain conditions when not preempted by the federal act. 3)Requires, pursuant to a United States (U.S.) Department of Transportation order, each railroad carrier to provide the SERC for each state in which it operates trains transporting one million gallons or more of Bakken crude oil, notification regarding the expected movement of such trains through the counties in the state. FISCAL EFFECT: Not known. COMMENTS: Need for the bill: According to the author, "AB 102 was introduced to respond to the need to address gaps in California's first responders' ability to respond to spills of hazardous materials. While the focus has been on recent spills of crude oil by rail in the U.S. and Canada, there are other extremely toxic and dangerous materials that are being transported by both truck and rail. Last year's funding of the Oil Spill Prevention Response AB 102 Page F Program in the Department of Fish and Wildlife recognized the danger of petroleum spills from rail, truck and pipeline. Placing a fee on hazardous materials to fund the ability to respond to spills needs to be carefully considered prior to be adopted". Accidents involving hazardous materials travelling by rail: In recent years, there have been a number of serious accidents across North America involving hazardous materials travelling by rail. For example, in July 2013, a train carrying crude oil through Lac-Megantic, Quebec derailed and exploded in a downtown area. In addition, there have been incidents across the United States involving crude and ethanol that have caused significant environmental damages and posed a risk to human health and safety. While California has not had a large-scale rail accident involving hazardous materials in recent years, a train accident in Dunsmuir in 1991 spilled 19,000 gallons of pesticide into the Sacramento River. The effects of the spill were substantial and impacted a significant area. State funding for railroad hazardous material accident response: Following the Dunsmuir accident in 1991, the state assessed a fee on hazardous materials transported in the state. This fee, on trucking companies and the railroads, was assessed from 1991 until it expired in 1995. In 1994, each trucking company paid a $205 fee. In addition, major railroads paid differing fees, all of which generated over $1.2 million in revenue. Information on how the fee rate was determined is unavailable. Funds collected from the fee were deposited in the Rail Accident Prevention and Response Fund and used to support grants to local communities for hazardous materials response equipment and training. As part of the 2014-15 budget, the Legislature authorized a $10 million loan from the High-Cost Fund-B Administrative Committee Fund, which provides subsidies to telephone carriers that provide basic local telephone service in high-cost areas, to a new Regional Railroad Accident Prevention and Immediate Response Fund. The funds are intended to support six new hazardous AB 102 Page G materials response teams with the purchase of hazardous material response vehicles and training. The loan is scheduled to be repaid with interest by July 1, 2017, although, at the time the loan was made, no funding source was designated to provide repayment. The FY 2014-2015 budget trailer bill, SB 861, Chapter 35, Statutes of 2014, expanded the OSPR marine oil spill program to inland oil spills that affect waters of the state. This bill requires railroads to have oil spill contingency plans and demonstrate the financial ability to pay for any damages resulting from a spill. Additionally, SB 861 established a 6.5 cent per barrel fee on oil transported by pipeline or railroads to refineries to fund OSPR regulations and oversight programs. Governor's budget proposal FY 2015-2016: Included in the Governor's proposed budget for FY 2015-2016 was a "trailer bill" proposal to create the Regional Railroad Accident Preparedness and Immediate Response Force in the Office of Emergency Service, and to designate this force as being responsible for providing regional and onsite response capabilities in the event of a release of hazardous materials from a rail car or a railroad accident involving a rail car. AB 102 is similar to the Governors' proposal with the addition of surface transportation and truck transportation of hazardous materials. Office of Emergency Services - gap analysis: In March of 2015 OES completed an analysis of outstanding gaps in the State's ability to respond to hazardous material spills from rail accidents. Among the major findings from this Gap Analysis were the following shortcomings, specifically, the analysis AB 102 Page H identified gaps in hazardous materials response capacities:<1> 1)High-hazard areas for derailments are primarily located in the mountains with some high-hazard areas in urban areas such as in the San Bernardino-Riverside and San Luis Obispo regions; 2)There are limited or no hazmat teams located near the high-hazard areas in rural Northern California and other populated areas near rail routes, such as Stockton, San Luis Obispo, Santa Maria and Barstow have only "non-certified" hazmat teams; 3)There is currently no reliability for, or system-wide access to industry-based resources that are controlled by industry; 4)Because Central Coast refineries do not have the same level of hazmat response capability with Type 2 State certified hazmat teams, without specialized or enhanced hazmat capabilities along and adjunct to Central Coast refineries, there remains a significant risk to public safety and the environment in the event of a hazardous materials incident; and 5)The $1.7 million provided by Pipeline and Hazardous Materials Safety Administration is inadequate to support emergency hazmat response needs. Arguments in opposition: A coalition of business, agricultural and chemical manufactures, including the American Chemistry Council, voiced their concerns with AB 102 as well as the Governor's budget proposal. Specifically they stated, "Collectively, we are committed to the safe transport of materials that are vital to a broad range of industries, including water treatment, farming, construction, medicine, technology, and transportation. Many facilities and businesses in California depend on receiving these essential materials. However, as drafted, the bill leaves unanswered too many questions about the level of necessary funding, its duration, how the program will be implemented and the potential impact on --------------------------- <1> Cal-OES, "Hazardous Material Team and Response Resources Capabilities: Updated Gap Analysis for Transport and Response of Hazardous Materials by Rail and Refineries in California", March 2015. AB 102 Page I California businesses." Prior legislation: SB 861(Budget Committee), Chapter 35, Statutes of 2014. Expands the State's marine oil spill program to inland oil spills that affect waters of the state. Requires railroads to have oil spill contingency plans and demonstrate the financial ability to pay for any damages resulting from a spill and established a 6.5 cent per barrel fee on oil transported by pipeline or railroads to refineries to fund regulations and oversight programs. AB 380 (Dickinson), Chapter 533, Statutes of 2014. Requires rail carriers to submit specified information regarding the transport of hazardous materials and Bakken oil to the OES for the purposes of emergency response planning. SB 1319 (Pavley), Chapter 348, Statutes of 2014. Provided the expansion of OSPR's duties to require training and equipment grants for local first responders and ensures OSPR has access to confidential information collected by OES and the Energy Commission. Requires comprehensive rail inspections and inland oil risk assessments. This bill was amended to instead include groundwater language and was subsequently enacted into law. REGISTERED SUPPORT / OPPOSITION: Support AB 102 Page J None on file. Opposition Agricultural Council of California American Coatings Association Automotive Specialty Products Alliance California Chamber of Commerce California Cotton Ginners and Growers Association California Farm Bureau Federation California Manufacturers & Technology Association California Paint Council California Railroad Industry Cal-Tax Chemical Industry Council of California Consumer Specialty Products Association Styrene Information Research Center Western Agricultural Processors Association Western Plant Health Association Analysis Prepared by:Bob Fredenburg / E.S. & T.M. / (916) 319-3965 AB 102 Page K