<p> SB 295 Page 1 SENATE THIRD READING SB 295 (Jackson) As Amended August 19, 2015 Majority vote</p><p>SENATE VOTE: 38-0</p><p>Committee Votes Ayes Noes Environmental 6-1 Alejo, Dahle, Gonzalez, Gray, Gallagher Safety McCarty, Ting Governmental 18-0 Gray, Linder, Alejo, Bigelow, Gallagher Organization Campos, Cooley, Cooper, Daly, Cristina Garcia, Eduardo Garcia, Gipson, Roger Hernández, Levine, Mayes, Perea, Salas, Steinorth, Wilk Appropriations 16-1 Gomez, Bigelow, Bloom, Gallagher Bonta, Calderon, Chang, Nazarian, Eggman, Eduardo Garcia, Holden, Jones, Quirk, Rendon, Wagner, Weber, Wood</p><p>SUMMARY: Expands the State Fire Marshal's responsibilities for regulating intrastate pipelines safety. Specifically, this bill: </p><p>1) Requires, commencing January 1, 2017, the State Fire Marshal, or an officer or employee authorized by the State Fire Marshal, to annually inspect all intrastate pipelines and operators of intrastate pipelines under the jurisdiction of the State Fire Marshal to ensure compliance with applicable laws and regulations.</p><p>2) Requires, by January 1, 2017, the State Fire Marshal, to adopt regulations. </p><p>3) Prohibits the State Fire Marshal from becoming an inspection agent for the portions of intrastate pipelines that are not under the jurisdiction of the State Fire Marshal unless all regulatory and enforcement authority over those pipelines is transferred to the State Fire Marshal from the federal Pipeline and Hazardous Materials Safety Administration (PHMSA). </p><p>4) Requires the State Fire Marshal to revise the fee assessed to a level sufficient to cover the costs associated with implementation.</p><p>FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill may result in one-time costs of approximately $3.3 million to establish regulations and administer the inspection program in the first year; ongoing annual costs of approximately $2.4 million to administer the inspection program; and unknown potential increases in fees charged to pipeline operators and independent hydrostatic testing firms. SB 295 Page 2</p><p>COMMENTS: </p><p>Need for this bill: According to the author, "On May 19 of this year tragedy struck when an onshore pipeline carrying crude oil ruptured and spilled more than 100,000 gallons of oil, more than 20,000 gallons of which ended up in the ocean off the Santa Barbara Coastline. To date, this spill has caused significant negative impacts to the ocean, local beaches, wildlife, and the local economy. Although the investigation into the response and the oil spill is ongoing, we do know that corrosion was responsible for the rupture. Before the spill, the last completed inspection was in 2013. The pipeline was again inspected in 2015, but at the time of the accident the results of the inspection had not been analyzed. </p><p>"The pipeline that ruptured – Line 901 – was being inspected every other year. If Line 901 had been inspected annually the corrosion would likely have been detected before it ruptured and this disaster would have been avoided. Because Line 901 is federally regulated, SB 295 addresses these shortcomings by directing the State Fire Marshall to seek the authority to inspect federally regulated pipelines and to inspect all pipelines annually.</p><p>"Most importantly, oil pipeline owners should be financially responsible to ensure their pipelines operate safely and meet applicable laws and regulations, not taxpayers, which is why SB 295 requires fee increases on pipeline owners to pay for more inspections."</p><p>Refugio oil spill: On May 20, 2015, Governor Brown issued an emergency proclamation for Santa Barbara County due to the effects of the oil spill described by the author. Refugio State Beach and El Capitan State Beach have been closed for more than a month because of the oil spill. Fisheries from Canada de Algeria to Coal Oil Point remain closed, which has negatively impacted several commercial fisheries – including lobster, crab, shrimp, halibut, urchin, squid, whelk, and sea cucumber. The Oiled Wildlife Care Network has recovered 192 dead birds and 103 dead marine mammals from the spill to date. Dead marine mammals recovered include dolphins, sea lions and seals. Sensitive habitat of the California least tern and the snowy plover, birds protected by the Endangered Species Act, has been damaged. Hotels, tour outfits and other tourism businesses have experienced cancelations and decreased bookings due to the spill. More than 1,000 workers from local, state and federal agencies have been working to clean up the beaches. Since May 20, approximately 14,267 gallons of oily water have been recovered. </p><p>On May 21, 2015, PHMSA issued a Correct Action Order to require Plans All American Pipeline, the owner of the ruptured pipeline, to take certain corrective actions to protect the public, property, and the environment from potential hazards associated with Line 901 in Santa Barbara County. The Correct Action Order also found that Line 901 was a 24-inch diameter line that was installed in 1987 and the section that ruptured had extensive corrosion. The deepest metal loss at each area ranged between 54% to 74% of the original pipeline wall thickness. The failure site wall thickness had degraded to an estimate one-sixteenth of an inch. </p><p>Intrastate vs. Interstate Pipelines: The United States Department of Transportation PHMSA has exclusive federal authority over interstate pipeline facilities (49 United States Code Section 60101, et seq.). Interstate pipeline is defined as a pipeline or that part of a pipeline that is used in the transportation of hazardous liquid or carbon dioxide in interstate or foreign commerce. Typically, these lines cross state borders, of begin in federal waters. Also, A Federal Energy Regulatory Commission (FERC) filing by the operator can be the determining factor. The two pipelines in Santa Barbara County have a FERC filing. SB 295 Page 3 Office of the State Fire Marshal has safety regulatory and enforcement authority over intrastate hazardous liquid pipelines pursuant to the Elder California Pipeline Safety Act of 1981 (Government Code Section 51010, et seq.). Intrastate pipeline is defined as means a pipeline or that part of a pipeline to which this part applies that is not an interstate pipeline. Those pipelines are located entirely within state borders including offshore state waters.</p><p>Analysis Prepared by: Paige Brokaw / E.S. & T.M. / (916) 319-3965 FN: 0001642</p>