BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 900


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          SENATE THIRD READING


          SB  
          900 (Jackson)


          As Amended  August 17, 2016


          Majority vote


          SENATE VOTE:  32-5


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                   |Noes               |
          |                |     |                       |                   |
          |                |     |                       |                   |
          |                |     |                       |                   |
          |----------------+-----+-----------------------+-------------------|
          |Natural         |9-0  |Williams, Jones,       |                   |
          |Resources       |     |Cristina Garcia,       |                   |
          |                |     |Gomez, Hadley, Harper, |                   |
          |                |     |McCarty, Mark Stone,   |                   |
          |                |     |Wood                   |                   |
          |                |     |                       |                   |
          |----------------+-----+-----------------------+-------------------|
          |Appropriations  |15-0 |Gonzalez, Bigelow,     |                   |
          |                |     |Bloom, Bonilla, Bonta, |                   |
          |                |     |Chang, Eggman, Eduardo |                   |
          |                |     |Garcia, Jones,         |                   |
          |                |     |Obernolte, Quirk,      |                   |
          |                |     |Santiago, Weber, Wood, |                   |
          |                |     |McCarty                |                   |
          |                |     |                       |                   |
          |                |     |                       |                   |
           ------------------------------------------------------------------ 








                                                                     SB 900


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          SUMMARY:  Requires, upon appropriation of funding by the  
          Legislature, that the State Lands Commission (SLC) administer a  
          coastal hazard removal and remediation program (program).


          Specifically, this bill:  


          1)Requires SLC, within two years of an appropriation of funds,  
            to administer the program to do the following: 


             a)   Complete an in-depth inventory of legacy oil and gas  
               wells and other coastal hazards along the California  
               coastline and determine high-priority hazards and legacy  
               oil and gas wells to remediate; 


             b)   Survey, study, and monitor oil seepage in state waters  
               and tidelands under its jurisdiction to determine oil  
               seepage locations, rates, and environmental impacts; and,


             c)   Begin the process of remediating improperly abandoned  
               legacy oil and gas wells that have a high risk of leaking  
               oil and, with any remaining funds, remove other identified  
               coastal hazards.  


          2)In cooperation with the Division of Oil, Gas, and Geothermal  
            Resources (DOGGR), authorizes SLC seek to abandon (properly  
            close) legacy oil and gas wells that present a hazard to  
            public health and safety and the environment.  


          3)Requires SLC to annually report to the Legislature the  
            activities and accomplishments of the program.  








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          4)Appropriates specified funds to SLC for the implementation of  
            the program and authorizes SLC to seek and accept gifts,  
            bequests, devises, or donations to fund the program.


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, this bill transfers $500,000 from the General Fund to  
          the Land Bank Fund (LBF) in Fiscal Year (FY) 2017-18 and up to  
          $2 million per year thereafter to ensure the unencumbered funds  
          in the LBF are available to the SLC for program implementation.   
          One-time SLC cost of approximately $100,000 to complete the  
          in-depth inventory of legacy wells (LBF).  Annual SLC costs of  
          approximately $50,000 to survey and monitor oil seepage and  
          annual SLC costs of approximately $200,000 to remove coastal  
          hazards (LBF).  Unknown costs to plug and abandon legacy wells,  
          potentially in the $1 million per well range if the well is in  
          the tidal zone (LBF).  This includes CEQA compliance (which can  
          be hundreds of thousands of dollars).  DOGGR costs are  
          absorbable.


          COMMENTS:  SLC is an independent commission comprised of the  
          Lieutenant Governor, the State Controller, and the Director of  
          Finance.  Established in 1938, SLC manages the state's four  
          million acres of tidelands and submerged lands and the beds of  
          navigable rivers, streams, lakes, bays, estuaries, inlets, and  
          straits.  In the marine context, SLC has broad authority over  
          sovereign lands, including rivers and sloughs, lakes, tidelands,  
          and submerged lands.  It also manages energy and mineral  
          resource development through leases, has an oil spill prevention  
          program at marine oil terminals and offshore platforms, and has  
          an invasive species prevention program from large ocean-going  
          vessels.


          Weather systems and extreme storms can cause dangerous coastal  
          hazards to surface on shorelines.  When funding is available,  








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          SLC removes coastal hazards.  Coastal hazards can include  
          remnants of coastal structures, piers, oil wells, pilings,  
          deteriorated electric cables, and old pipes.  Many coastal  
          hazards are located on public trust lands set aside for  
          commerce, navigation, fishing, and recreation, and can impede  
          coastal use and threaten public health and safety. 


          The Summerland Oil Field in Santa Barbara County was the world's  
          first offshore oil drilling operation and predates any  
          regulatory framework.  While the visual infrastructure has been  
          removed, the wells were not properly capped and continue to leak  
          oil into the ocean and Santa Barbara's beaches.  


          SLC has developed a limited coastal hazard removal program that  
          has operated when funding has been available.  The program was  
          initiated when an inventory performed in the mid-1980s found  
          over 400 coastal hazards in Los Angeles, Santa Barbara, and  
          Ventura Counties.  While some hazards were traced to responsible  
          parties, most were not and consequently became the  
          responsibility of the state.  SLC has completed eight hazard  
          removal projects since 2001.  In August, 2015, SLC directed  
          staff to conduct an initial assessment of the Becker Onshore  
          Well (in the Summerland Oil Field).  


          SLC also inventories and remediates abandoned mine hazards on  
          state school lands, in consultation with the Department of Fish  
          and Wildlife and the State Office of Historic Preservation.  




          Analysis Prepared by:                                             
          Elizabeth MacMillan / NAT. RES. / (916) 319-2092  FN: 0004295











                                                                     SB 900


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