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SB-588 Marine resources and preservation.(2017-2018)

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Date Published: 02/17/2017 02:00 PM
SB588:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 588


Introduced by Senator Hertzberg

February 17, 2017


An act to amend Sections 6601 and 6602 of, to amend and renumber Sections 6612, 6614, and 6618 of, to amend, renumber, and add Section 6605 of, to add Sections 6607 and 6608 to, to repeal Sections 6610, 6613, 6615, 6616, 6617, 6619, 6620, and 6621 of, to repeal the headings of Article 1 (commencing with Section 6600) and Article 2 (commencing with Section 6610) of Chapter 5.5 of Part 1 of Division 6 of, and to repeal and add Sections 6603, 6604, and 6611 of, the Fish and Game Code, and to amend Sections 71550, 71551, and 71560 of the Public Resources Code, relating to ocean resources, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


SB 588, as introduced, Hertzberg. Marine resources and preservation.
(1) Existing law establishes the California Artificial Reef Program, administered by the Department of Fish and Wildlife, to include the placement of artificial reefs, as defined, in state waters and a prescribed study of existing successful reefs and new reefs to determine design criteria.
The California Marine Resources Legacy Act establishes a program, administered by the department, to allow partial removal of offshore oil structures. The act authorizes the department to approve the partial removal of offshore oil structures, if specified conditions are satisfied. These conditions include the provision of financial assurances by the applicant to the department to ensure that the applicant will provide sufficient funds to cover the cost of review of the project and the management and maintenance of the structure after the department takes title to the structure, a finding by the Ocean Protection Council that the partial removal of the structure provides a net benefit to the marine environment compared to full removal, a calculation of the cost savings by the State Lands Commission of partial removal of the structure compared to full removal, a contractual agreement between the applicant and the department that provides sufficient funds for overall management of the structure by the department, an indemnification agreement between the applicant and the department, and the apportionment and transmittal by the applicant of a percentage of the cost savings funds in accordance with a prescribed schedule to specified entities and funds, including the California Endowment for Marine Preservation. The act requires the first person to file an application to partially remove an offshore oil structure to pay, in addition to the costs relating to review of the project and management and maintenance of the structure, the startup costs incurred by the department or the State Lands Commission to implement the act and provides for the reimbursement of startup costs from certain funds received by the department from the apportionment of cost savings.
This bill would revise and recast the California Marine Resources Legacy Act to establish a similar program to allow, 2 years after the payment of startup costs, a prospective transferor, as defined, to offer and the department to accept title to an artificial reef converted from a decommissioned oil and gas platform for incorporation into the California Artificial Reef Program if similar conditions to those described above are met, except if the platform is required to be fully removed by conditions in a lease issued by the State Lands Commission. As part of the implementation of the program, the bill would require the department to revise the Artificial Reef Plan prepared pursuant to the California Artificial Reef Program. The bill would not require the first transferor to pay the startup costs and would instead authorize funding sufficient to fully fund program startup costs for the state, as determined by the department, to be provided to the department for deposit in the Special Deposit Fund, a continuously appropriated fund. The bill would make those funds deposited into the Special Deposit Fund available to the department, the Ocean Protection Council, the State Lands Commission, and the California Coastal Commission for startup costs, thereby making an appropriation.
This bill would require a transferor to apportion and transmit a portion of the cost savings to the department or the endowment, as specified, instead of to the specified entities and funds. The bill would require the department or the endowment, as applicable, to apportion those cost savings funds in accordance with the prescribed schedule to the specified entities and funds upon final, nonappealable judicial decisions upholding the department’s acceptance of title and all permits and approvals required for the partial removal of the platform or the running of the statutes of limitations applicable to all the permits and approvals, whichever is later. The bill would not require the person who deposited the startup funds in the Special Deposit Fund to be reimbursed for providing those funds but would require the person to identify one proposed transfer of a platform in which 55% of the total amount of the cost savings would be apportioned to the department for apportionment to the specified funds and entities. The bill would authorize a prospective transferor to withdraw its offer at any time before transfer of title becomes effective and would require the department to return funds submitted for review of the offer and certain other funds that have not been expended or committed as of the date of receipt of the notification of withdrawal. The bill would require the department or endowment, as applicable, to promptly return the cost savings to the transferor if the partial removal of the platform is not permitted by a court or governmental agency and the transferor is required to carry out full removal of the platform.
This bill would authorize a transferor to assert, and would prohibit the state from waiving, any defenses that the state may have against any claims against the state subject to indemnification. The bill would prohibit the transferor from indemnifying or being liable for any claims that may arise from the administration or use of the cost savings by entities receiving a portion of the cost savings.
(2) The act requires that partial removal comply with the California Environmental Quality Act (CEQA) and requires the Natural Resources Agency to serve as the lead agency for the environmental review under CEQA of a proposed project to partially remove an offshore oil structure. The act requires the Ocean Protection Council, for purposes of determining whether partial removal provides a net environmental benefit, to establish specified criteria and to consult with the department, the California Coastal Commission, the State Lands Commission, the California Ocean Service Trust, and other appropriate entities as to those criteria.
This bill would instead require the State Lands Commission to serve as the lead agency for the environmental review under CEQA and would require that partial removal of a platform comply with CEQA if the platform or any of its components, including pipelines, cables, or other accessory structures, are located in state waters, as defined.
The bill would define “net environmental benefit” for purposes of the act and would delete the requirement for the council to establish criteria for purposes of making the net environmental benefit determination. The bill would require the council, in determining whether partial removal of the platform would provide a net benefit to the marine environment compared to full removal of the platform, to also consider adverse impacts to air quality and greenhouse gas emissions that would result from full removal compared to partial removal of the platform, in consultation with the State Air Resources Board, consistent with any guidance or information submitted by the local air districts.
(3) The act requires the State Coastal Conservancy, upon the department’s final approval of the first application, to create and update, as specified, an advisory spending plan for cost savings deposited in the California Endowment for Marine Preservation. The act requires the conservancy to submit a copy of the spending plan and all updates to the Legislature and the Board of Directors of the California Endowment for Marine Preservation.
This bill would delete these requirements.
Vote: MAJORITY   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The heading of Article 1 (commencing with Section 6600) of Chapter 5.5 of Part 1 of Division 6 of the Fish and Game Code is repealed.
1.General Provisions

SEC. 2.

 Section 6601 of the Fish and Game Code is amended to read:

6601.
 The Legislature finds and declares all of the following:

(a)California’s extraordinary marine biological diversity is a vital asset to the state and nation. The diversity of species and ecosystems found in the ocean waters off the state is important to public health and well-being, ecological health, and ocean-dependent economic activities.

(b)Although the state maintains various programs to protect, restore, and enhance California’s marine resources, the effect of these programs is limited by inadequate and unstable funding.

(c)There is an existing permitting process for decommissioning and fully removing offshore oil platforms or production facilities. Owners and operators are currently responsible for the full cost of decommissioning and remediating those facilities.

(d)According to the United States Department of the Interior, the

(a) The 23 oil and gas platforms in federal waters and the four platforms in state waters off the California coast are expected to reach the end of their useful production lifetimes and be decommissioned between 2015 2017 and 2030. 2055.

(e)The California Ocean Science Trust in its June 2010 study, titled “Evaluating Alternatives for Decommissioning California’s Offshore Oil and Gas Platforms: A Technical Analysis to Inform State Policy,” analyzed a number of decommissioning alternatives to full rig removal and determined that the most likely alternative is to remove the upper portion of the rig and leave the remainder of the structure in place.

(f)The California Ocean Science Trust report and other studies indicate that the partial removal option can result in a net benefit to the marine environment and substantial cost savings compared to full removal of an oil platform or production facility.

(b) As a condition of federal and state leases, offshore oil and gas platforms must be decommissioned and removed within a reasonable period of time after abandonment of the wells.
(c) Existing federal regulations provide for partial structure removal or toppling in place for conversion to an artificial reef or other use if the structure becomes part of a state artificial reef program.
(d) For many years the Gulf of Mexico region has funded marine resource programs where oil and gas platforms are partially removed and converted to artificial reefs and the cost savings are shared between the state and the platform owner and operator, as appropriate.
(e) Existing law requires operators in state waters to comply with requirements in leases issued by the commission, and the leases give the commission discretion regarding abandoning platform wells and decommissioning platforms.

(g)

(f) Provided that partial removal of an oil rig platform and consideration of related alternatives would result in a net benefit to the marine environment compared to full removal, it is in the interest best interests of the state that a portion of the cost savings that result from partial removal should be and conversion to an artificial reef is shared with the citizens of this state to protect and enhance the state’s marine resources.

(h)It is also in the interest of the state that any program to allow partial removal of oil platforms meet all of the following criteria:

(1)Partial removal shall result in a net benefit to the marine environment compared to full removal.

(2)The determination of whether partial removal would result in a net benefit to the marine environment should be made only after scientific study and evaluation.

(3)Because the location and depth of an oil platform, as well as other ecological factors, create a unique environment, each oil platform shall be subject to scientific study and evaluation before partial removal is allowed.

(4)The costs of the scientific study and evaluation should be borne by the applicant.

SEC. 3.

 Section 6602 of the Fish and Game Code is amended to read:

6602.
 For purposes of this chapter, the following terms have the following meanings:

(a)“Applicant” means the owner or operator of an offshore oil structure in state or federal waters or another party responsible for decommissioning an offshore oil structure in state or federal waters who applies pursuant to this chapter to carry out partial removal of the structure.

(a) “Coastal commission” means the California Coastal Commission.
(b) “Commission” means the State Lands Commission.

(c)“Conservancy” means the State Coastal Conservancy.

(d)

(c) “Cost savings” means the difference between the estimated cost to the applicant transferor of complete removal of an oil and gas platform as may be required by state and federal leases and the estimated costs cost to the applicant transferor of partial removal of the oil and gas platform pursuant to this chapter.

(e)

(d) “Council” means the Ocean Protection Council.

(f)

(e) “Endowment” means the California Endowment for Marine Preservation established in Division 37 (commencing with Section 71500) of the Public Resources Code.

(g)“Exclusive economic zone (EEZ)” means the zone as measured from the mean high tide line seaward to 200 nautical miles, as set forth in Presidential Proclamation 5030 of March 10, 1983, in which the United States proclaimed jurisdiction over the resources of the ocean within 200 miles of the coastline.

(h)“National Fishing Enhancement Act of 1984” means Title II of Public Law 98-623.

(f) ”Federal waters” means those waters of the Pacific Ocean outside of state waters.
(g) “Net environmental benefit” means gains in the value of environmental services or other ecological properties in the marine environment attained by leaving a partial platform in place plus the value of avoiding adverse environmental impacts caused by full removal, minus any adverse environmental impacts of leaving the partial platform in place.

(i)

(h) “Offshore oil structure” and gas platform,” or a variation of that term, means platforms, piers, and artificial islands a platform located seaward of mean lower low water, the ordinary high water mark used for oil and gas exploration, development, production, processing, or storage. storage, exclusive of shell mounds and drilling muds.

(j)

(i) “Oil” means any kind of petroleum, liquid hydrocarbons, natural gas, or petroleum products or any fraction or residues therefrom.

(k)“Open coastal marine resources” means those marine resources that use open coastal waters as their habitat.

(l)“Open coastal waters” means the area composed of the submerged lands of the state that are below the mean lower low water, extending seaward to the boundaries of the exclusive economic zone.

(m)

(j) “Partial removal” means an alternative to full removal of an offshore oil structure, and gas platform, in compliance with all requirements of this chapter. applicable requirements.

(n)

(k) “State waters” means those waters within the seaward boundary of the state as identified in Section 2 of Article III of the California Constitution. established boundary of the state, which is approximately three nautical miles from shore, as set pursuant to the order entered by the United States Supreme Court in the case of U.S. v. California (2014) 135 S. Ct. 563.
(l) “Transferor” means the owner, operator, or legal entity responsible for an offshore oil and gas platform in state or federal waters that offers or plans to offer to the department title to an artificial reef converted from that platform.

SEC. 4.

 Section 6603 of the Fish and Game Code is repealed.
6603.

(a)This chapter establishes a program through which an applicant may voluntarily apply to the department to carry out partial removal of the structure.

(b)The program established pursuant to this chapter shall be deemed consistent with, and part of, the California Artificial Reef Program pursuant to Article 2 (commencing with Section 6420) of Chapter 5 for purposes of compliance with federal law including the National Fishing Enhancement Act of 1984.

(c)Except as specified in Section 6604, the department shall serve as the primary authority for carrying out the program, including review and approval of applications to partially remove an offshore oil structure in state or federal waters and management and operation of decommissioned offshore oil structures in state or federal waters approved pursuant to this chapter.

(d)Final approval of an application shall not be granted until the applicant complies with all requirements of the chapter, including the payment of all costs to the state to review and approve the proposed project as required by subdivision (b) of Section 6612 and the transmittal of the required portion of cost savings to the endowment and other parties as required by Section 6618.

(e)The department may obtain funds for the planning, development, maintenance, and operation of an offshore oil structure transferred to the department pursuant to this chapter and may accept gifts, subventions, grants, rebates, reimbursements, and subsidies from any lawful source.

(f)The department may adopt regulations to implement this chapter.

SEC. 5.

 Section 6603 is added to the Fish and Game Code, to read:

6603.
 (a) This chapter establishes a program for a prospective transferor to offer to the department and for the department to accept title to an artificial reef converted from an oil and gas platform in federal or state waters, except if the platform is required to be fully removed by conditions in a lease issued by the commission.
(b) A proposed project to partially remove an offshore oil and gas platform pursuant to this chapter is a project as defined in Section 21065 of the Public Resources Code and is therefore subject to the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) if the platform or any of its components, including pipelines, cables, or other accessory structures, are located in state waters.
(c) The commission shall serve as the lead agency for all environmental reviews of any project proposed pursuant to this chapter that is subject to the California Environmental Quality Act.
(d) As part of its implementation of the program established pursuant to this chapter, the department shall revise the Artificial Reef Plan originally prepared for the California Artificial Reef Program established in Article 2 (commencing with Section 6420) of Chapter 5.
(e) The department may adopt regulations to implement this chapter.
(f) The department may, through contracts and memoranda of agreement, enlist the expertise of fishery participants and their representatives, marine conservationists, marine scientists, and governmental, nongovernmental, or private entities to assist in any aspect of the department’s implementation or administration of this chapter.
(g) The department may accept gifts, subventions, grants, rebates, reimbursements, and subsidies from any lawful source for the administration of this chapter.
(h) The department, commission, and council may enter into any contracts, memoranda of understanding, and any other agreements necessary to effectuate their roles and responsibilities under this chapter.

SEC. 6.

 Section 6604 of the Fish and Game Code is repealed.
6604.

(a)A proposed project to partially remove an offshore oil structure pursuant to this chapter is a project as defined in subdivision (c) of Section 21065 of the Public Resources Code and is therefore subject to the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) and shall be reviewed pursuant to the time limits established in Section 21100.2 of the Public Resources Code.

(b)The Natural Resources Agency shall serve as the lead agency for the environmental review of any project proposed pursuant to this chapter.

SEC. 7.

 Section 6604 is added to the Fish and Game Code, to read:

6604.
 (a) Funding sufficient to fully fund program startup costs for the state, as determined by the department, may be provided to the department for deposit in the Special Deposit Fund pursuant to Section 16372 of the Government Code. Startup costs include documented costs for the department’s California Artificial Reef Program, and costs that the council, the commission, and the coastal commission are expected to incur to initially establish and staff the program pursuant to this chapter.
(b) Funds deposited into the Special Deposit Fund pursuant to subdivision (a) shall be available to the department, the council, the commission, and the coastal commission for startup costs, including to establish new positions, to perform the tasks associated with planning, implementing, managing, and monitoring, and to perform other functions related to its function in the program established in this chapter.
(c) When a person provides the startup costs pursuant to subdivision (a), the person shall identify one proposed transfer of a platform whose cost savings shall be apportioned pursuant to subdivision (c) of Section 6610.

SEC. 8.

 Section 6605 of the Fish and Game Code is amended and renumbered to read:

6605.6612.
 (a) Nothing in this chapter is intended, and it shall not be construed, to limit or affect the authority or duties of any state or local agency, including, but not limited to, the department, the commission, the council, and the California Coastal Commission. coastal commission.
(b) Nothing in this chapter shall be construed to do any of the following:
(1) Relieve the applicant transferor or prior owner or operator of an offshore oil structure platform from any continuing liability under any of the following, if the liability is associated with seepage or release of oil or other contaminants from an offshore oil structure platform that was decommissioned pursuant to an order of, or any action taken by, and in accordance with, any applicable rule or regulation of, any federal or state agency:
(A) Any state statute or regulation regarding liability for the spilling of oil.
(B) The federal Oil Pollution Act of 1990 (33 U.S.C. Sec. 2701 et seq.).
(C) The Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. Sec. 9601 et seq.).

(C)

(D) Any other provision of law.
(2) Establish any new liability on the part of the state. state or waive any applicable immunities under the Government Claims Act (Division 3.6 (commencing with Section 810) of Title 1 of the Government Code).
(3) Require any agency with jurisdiction to approve the partial removal of an offshore oil structure. platform.
(4) Promote, encourage, or facilitate offshore oil exploration, development, and production within California’s open coastal state waters.
(5) Require the United States Department of the Interior or the commission to modify, amend, or alter an existing oil and gas lease to approve partial removal of an offshore oil structure platform.
(6) Alter any existing law or applicable rule or regulation of any federal or state agency that establishes liability for damages arising with respect to artificial reefs or reef materials, including, but not limited to, components of decommissioned oil structures.
(7) Alter any existing law or policy that protects natural reefs.

(8)Approve any particular method of abandonment.

(c) Any partial removal of an offshore oil structure platform pursuant to this chapter shall not be used or counted as mitigation for any environmental impacts or natural resource damages.

SEC. 9.

 Section 6605 is added to the Fish and Game Code, to read:

6605.
 (a) An offer to transfer an artificial reef converted from a decommissioned oil and gas platform for incorporation into the California Artificial Reef Program may be submitted to the department, in a manner prescribed by the department, commencing two years after the payment of funding pursuant to Section 6604. The department may take title to an artificial reef converted from a decommissioned oil and gas platform for incorporation into the California Artificial Reef Program if all of the following conditions are met:
(1) The transferor obtains all necessary federal authorizations and permits and the transfer is consistent with all applicable laws.
(2) The transferor has formally initiated the decommissioning process with the applicable lessor.
(3) The transferor obtains any required consistency determinations or coastal development permits from the coastal commission.
(4) The transferor has complied with all applicable terms and conditions of any lease issued by the commission and the department has applied for and received a lease issued by the commission if the reefing of the offshore oil and gas platform involves tidelands or submerged lands in state waters.
(5) The transferor has provided funding for the purposes for the activities enumerated in Section 6606.
(6) The council has determined that the partial removal of the offshore oil and gas platform provides a net benefit to the marine environment compared to full removal of the platform pursuant to Section 6607.
(7) The transferor prepares a draft management plan pursuant to Section 6608 that is approved by the department.
(8) The commission has made a final determination of the estimated cost savings that would result from the conversion of the offshore oil and gas platform pursuant to Section 6609.
(9) The transferor provides the indemnification required pursuant to Section 6611.
(10) Before accepting the transfer, the department holds a public meeting in the county nearest to the location of the offshore oil and gas platform that is proposed for transfer.
(11) Environmental review of the project pursuant to the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) and the National Environmental Policy Act of 1969 (42 U.S.C. Sec. 4321 et seq.) has been completed and certified, as applicable.
(12) Any judicial process challenging an applicable permit or determination has been fully and finally exhausted.
(b) The transfer of title becomes effective upon approval of the final management plan, the transferor’s payment of the funds pursuant to Section 6610, and upon compliance with the conditions in this chapter.
(c) Upon receipt of the initial offer pursuant to this section, the department shall transmit a copy of the offer to the endowment, which shall constitute notice to that agency.

SEC. 10.

 Section 6607 is added to the Fish and Game Code, to read:

6607.
 (a) Nothing in this chapter shall be construed as altering or limiting the jurisdiction of the commission over the decommissioning of any platform on leased state tidelands.
(b) Prior to completion of environmental documentation pursuant to the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) and the National Environmental Policy Act of 1969 (42 U.S.C. Sec. 4321 et seq.), as applicable, the council shall determine whether partial removal of the platform would provide a net benefit to the marine environment compared to full removal of the platform. In making this determination, the council, based on credible science, shall consider, and determine the appropriate weight to be assigned to, each of the following:
(1) The anticipated contribution of the platform to enhancing the protection and productivity of fish and other marine life.
(2) Any adverse impacts to biological resources or water quality, or any other marine environmental impacts, from the full removal of the platform that would be avoided by partial removal.
(3) Any adverse impacts to biological resources or water quality, or any other marine environmental impacts, from partial removal of the platform.
(4) Any benefits to the marine environment that would result from the full removal of the platform or from partial removal.
(5) Any considerations for ongoing reef management that inform the net benefit determination. These assumptions should inform the management plan developed pursuant to Section 6608.
(6) The adverse impacts to air quality and greenhouse gas emissions that would result from full removal of the platform compared to partial removal of the platform, in consultation with the State Air Resources Board, consistent with any guidance or information submitted by the local air districts.
(c) The council shall submit the determination made pursuant to this section to the commission, for inclusion in the environmental documentation, and to the department. The determination made pursuant to this section is final and shall not be revised except by the council.
(d) The council shall take all feasible steps to complete the net environmental benefit determination in a timely manner that accommodates the commission’s schedule for preparing the environmental documentation and the department’s schedule for consideration of the transfer.
(e) The benefits resulting from the contribution of cost savings to the endowment shall not be considered in the determination of net environmental benefit.
(f) The council may contract or enter into a memorandum of understanding with any other appropriate governmental or nongovernmental entity to assist in its determination of net environmental benefit.

SEC. 11.

 Section 6608 is added to the Fish and Game Code, to read:

6608.
 (a) In consultation with the department, the transferor shall prepare a management plan for the artificial reef. The department shall review the management plan and may approve the plan if it determines that the plan does the following:
(1) Provides for the maintenance of the artificial reef in a manner consistent with navigational safety, enforcement, and monitoring.
(2) Includes measures to manage fishery and other marine life resources at and around the structure in a manner that will ensure that the net benefits to the marine environment identified pursuant to Section 6607 are maintained or enhanced. Consistent with applicable state and federal law, management measures may include a buffer zone in which fishing or removal of marine life is restricted or prohibited.
(b) Before approving a management plan pursuant to subdivision (a), the department shall provide for a public comment period for the management plan and shall address the comments in the final version of the management plan.

SEC. 12.

 The heading of Article 2 (commencing with Section 6610) of Chapter 5.5 of Part 1 of Division 6 of the Fish and Game Code is repealed.
2.Partial Removal of Offshore Oil Structures

SEC. 13.

 Section 6610 of the Fish and Game Code is repealed.
6610.

(a)An owner or operator, or other party responsible for decommissioning, of an offshore oil structure may apply to the department for approval to partially remove the structure pursuant to the requirements of this chapter.

(b)The department shall design and make available to potential applicants an application process that will facilitate review of the application by the department in a timely manner, consistent with Section 6604.

(c)Upon receipt of an application pursuant to this section, the department shall transmit a copy of the application to the council, the commission, and the endowment, which shall constitute notice to these agencies.

SEC. 14.

 Section 6611 of the Fish and Game Code is repealed.
6611.

(a)The application for partial removal shall include, at a minimum, all of the following:

(1)The applicant’s plan and schedule for partial removal of the offshore oil structure, including removal of any portion of the structure as appropriate to maintain navigational safety.

(2)A determination of the estimated cost of partial removal and the estimated cost of full removal.

(3)A determination of the environmental impacts and benefits to the marine environment from partial removal and full removal of the structure.

(4)Identification of all permits, leases, and approvals required by any governmental agency, including a permit issued by the United States Army Corps of Engineers if required for offshore oil structures, and a lease issued by the commission if the proposed project involves state tidelands and submerged lands, and a proposed schedule for the applicant or the state to receive those permits, leases, and approvals.

(b)The department may require the applicant to submit a management plan for the structure following partial removal, including maintenance in a manner consistent with navigational safety, enforcement, and monitoring.

(c)The information submitted pursuant to subdivisions (a) and (b) shall be used by the department for advisory purposes only. Final determinations regarding the partial removal and management of the offshore oil structure, net benefit to the marine environment from partial removal, and cost savings from partial removal shall be made solely by the department, council, and commission, as specified in this chapter, based on their independent review and judgment.

SEC. 15.

 Section 6611 is added to the Fish and Game Code, to read:

6611.
 The transferor shall indemnify and hold harmless the state and its agencies against any and all liability that may result, including, but not limited to, active negligence, and including defending the state and its agencies against any claims against it arising from any action undertaken pursuant to this chapter. Indemnification may be provided in the form of an insurance policy, cash settlement, or other mechanism as determined by the department. The transferor shall be entitled to assert, and the state and its agencies shall not waive, any defenses that the state and its agencies may have against any claims against the state subject to indemnification pursuant to this section. Notwithstanding any provision of this section, the transferor shall not indemnify or be liable for any claims that may arise from the administration or use of the cost savings transmitted by the transferor pursuant to Section 6610 by the state and its agencies, the California Endowment for Marine Preservation, the Fish and Game Preservation Fund, the Coastal Act Services Fund, or the county immediately adjacent to the location of the facility prior to its decommissioning.

SEC. 16.

 Section 6612 of the Fish and Game Code is amended and renumbered to read:
6612.

(a)Upon receipt of an application to partially remove an offshore oil structure pursuant to this chapter, the department shall determine whether the application is complete and includes all information needed by the department.

(b)(1)Upon a determination that the application is complete, the applicant

6606.
 (a) The transferor shall provide surety bonds executed by an admitted surety insurer, irrevocable letters of credit, trust funds, or other forms of financial assurances, determined by the department to be available and adequate, to ensure that the applicant transferor will provide sufficient funds to reimburse the department, council, commission, and conservancy to carry out coastal commission for all required activities pursuant to this article, chapter, including all of the following:

(A)Environmental review of the proposed project pursuant to Section 6604.

(B)

(1) A determination of net environmental benefit pursuant to Section 6613. 6607.
(2) Consultation on preparation and review of a management plan pursuant to Section 6608.

(C)

(3) A determination of cost savings pursuant to Section 6614. 6609.

(D)Preparation of a management plan for the structure pursuant to Section 6615.

(E)

(4) Implementation of the management plan and ongoing maintenance and monitoring of the structure artificial reef after the department takes title pursuant to Section 6620. 6605.

(F)Development of an advisory spending plan pursuant to Section 6621.

(G)

(5) Other activities undertaken to meet the requirements of this article, chapter, including the costs of reviewing applications for completeness, and reviewing, approving, and permitting the proposed project, which includes the costs of determining whether the project transfer meets the requirements of all applicable laws and regulations laws, regulations, and leases, and the costs of environmental assessment and or review.

(2)The department shall consult with the council, commission, and conservancy in determining appropriate funding for activities to be carried out by those agencies.

(b) A prospective transferor may withdraw its offer of transfer at any time before transfer of title become effective. Upon notification that the transferor has withdrawn its offer, the department shall return to the prospective transferor any funds provided by the prospective transferor for purposes of this section that have not been expended or committed as of the date of receipt of notification of withdrawal.

(3)

(c) The funds provided pursuant to paragraph (1) subdivision (a) and Section 6604 shall not be considered in the calculation of cost savings pursuant to Section 6614 or 6609 and the apportionment of cost savings pursuant to Section 6618. 6610.

(c)The first person to file an application on and after January 1, 2011, to partially remove an offshore oil structure pursuant to this chapter, shall pay, in addition to all costs identified under subdivision (b), the startup costs incurred by the department or the commission to implement this chapter, including the costs to develop and adopt regulations pursuant to this chapter. This payment of startup costs shall be reimbursed by the department as provided in paragraph (3) of subdivision (c) of Section 6618.

(d)As soon as feasible after reaching the agreement pursuant to subdivision (b), the lead agency shall begin the environmental review of the proposed project as required pursuant to Section 6604.

SEC. 17.

 Section 6613 of the Fish and Game Code is repealed.
6613.

(a)The council shall determine whether the partial removal of an offshore oil structure pursuant to this chapter provides a net benefit to the marine environment compared to the full removal of the structure.

(b)As a necessary prerequisite to determining net environmental benefit as required in subdivision (a), the council shall, upon receipt of its initial application from the department pursuant to Section 6610, establish appropriate criteria for evaluating the net environmental benefit of full removal and partial removal of offshore oil structures.

(1)The criteria shall include, but are not limited to, the depth of the partially removed structure in relation to its value as habitat and the location of the structure, including its proximity to other reefs, both natural and artificial.

(2)The criteria shall not include any consideration of the funds to be generated by the partial removal of the structure.

(3)In determining the criteria, the council shall consult with appropriate entities, including, but not limited to, the department, the commission, the California Coastal Commission, and the California Ocean Science Trust.

(4)The council shall establish the criteria in time to use them in making its initial determination of net environmental benefit pursuant to this section.

(c)Upon certification of environmental documents pursuant to the California Environmental Quality Act, the council shall, based on the criteria developed pursuant to subdivision (b) and other relevant information, determine whether partial removal of the structure would provide a net benefit to the marine environment compared to full removal of the structure. In making the determination, the council shall, at a minimum, take into account the following:

(1)The contribution of the proposed structure to protection and productivity of fish and other marine life.

(2)Any adverse impacts to biological resources or water quality, or any other marine environmental impacts, from the full removal of the facility that would be avoided by partial removal as proposed in the application.

(3)Any adverse impacts to biological resources or water quality, or any other marine environmental impacts, from partial removal of the structure as proposed in the application.

(4)Any benefits to the marine environment that would result from the full removal of the structure or from partial removal as proposed in the application.

(5)Any identified management requirements and restrictions of the partially removed structure, including, but not limited to, restrictions on fishing or other activities at the site.

(d)Benefits resulting from the contribution of cost savings to the endowment shall not be considered in the determination of net environmental benefit.

(e)The council may contract or enter into a memorandum of understanding with any other appropriate governmental or nongovernmental entity to assist in its determination of net environmental benefit.

(f)The determination made pursuant to this section and submitted to the department by the council shall constitute the final determination and shall not be revised except by the council.

(g)The council shall take all feasible steps to complete its determination in a timely manner that accommodates the department’s schedule for consideration of the application.

SEC. 18.

 Section 6614 of the Fish and Game Code is amended and renumbered to read:

6614.6609.
 (a) Upon certification of the appropriate environmental documents by the lead agency, the The commission shall determine, or cause to be determined, the cost savings that will result from the partial removal of an offshore oil structure as proposed in the application compared to versus full removal of the structure. offshore oil and gas platform.
(b) The commission shall ensure that any cost savings are accurately and reasonably calculated. The commission may contract or enter into a memorandum of understanding with any other appropriate governmental agency or other party, including an independent expert, to ensure that cost savings are accurately and reasonably calculated. calculated and, to that end, may obtain the assistance of governmental, nongovernmental, or private entities and experts through contracts or memoranda of agreement.
(c) The commission shall consider any estimates of cost savings made by any governmental agency, including, but not limited to, the Internal Revenue Service, the Franchise Tax Board, and the United States Department of the Interior. The commission shall include in its determination a written explanation, which shall be available to the public, of the differences, and the reasons for the differences, between the commission’s determination of cost savings and any other estimates of cost savings the commission considered.
(d) The applicant transferor shall provide all necessary documentation, as determined by the commission, to allow the commission to calculate the amount of cost savings. Failure to provide information requested by the commission in a timely manner may result in rejection of the application.
(e) The determination made pursuant to this section and submitted to the department by the commission shall constitute the final determination and shall not be revised except by the commission.
(f) The commission shall take all feasible steps to complete its determination in a timely manner that accommodates the department’s schedule for consideration of the application. manner.

SEC. 19.

 Section 6615 of the Fish and Game Code is repealed.
6615.

Prior to granting conditional approval of an application for partial removal of an offshore oil structure, the department shall do all of the following:

(a)Prepare a plan to manage the offshore oil structure after its partial removal. The plan shall include measures to manage fishery and marine life resources at and around the structure in a manner that will ensure that the net benefits to the marine environment identified pursuant to Section 6613 are maintained or enhanced. Consistent with state and federal law, management measures may include a buffer zone in which fishing or removal of marine life is restricted or prohibited.

(b)Provide an opportunity for public comment on the application pursuant to the California Environmental Quality Act.

(c)Hold a public hearing in the county nearest to the location of the offshore oil structure that is the subject of the application.

SEC. 20.

 Section 6616 of the Fish and Game Code is repealed.
6616.

The department may grant conditional approval of an application for partial removal of an offshore oil structure only if all of the following criteria are satisfied:

(a)The partial removal of the offshore oil structure and the planning, development, maintenance, and operation of the structure would be consistent with all applicable state, federal, and international laws, including, but not limited to, all of the following:

(1)The federal Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. Sec. 1801 et seq.).

(2)The federal National Fishing Enhancement Act of 1984 (33 U.S.C. Sec. 2101 et seq.).

(3)The federal Coastal Zone Management Act (16 U.S.C. Sec. 1451 et seq.).

(4)The California Coastal Management Program.

(5)The Marine Life Management Act (Part 1.7 (commencing with Section 7050)).

(6)The Marine Life Protection Act (Chapter 10.5 (commencing with Section 2850) of Division 3).

(7)State and federal water quality laws.

(8)Navigational safety laws.

(b)The partial removal of the offshore oil structure provides a net benefit to the marine environment compared to full removal of the structure, as determined pursuant to Section 6613.

(c)The cost savings that would result from the conversion of the offshore oil platform or production facility have been determined pursuant to Section 6614.

(d)The applicant has provided sufficient funds consistent with subdivision (b) of Section 6612.

(e)The department and the applicant have entered into a contractual agreement whereby the applicant will provide sufficient funds for overall management of the structure by the department, including, but not limited to, ongoing management, operations, maintenance, monitoring, and enforcement as these relate to the structure.

(f)The department has entered into an indemnification agreement with the applicant that indemnifies the state and the department, to the extent permitted by law, against any and all liability that may result, including, but not limited to, active negligence, and including defending the state and the department against any claims against the state for any actions the state undertakes pursuant to this article. The agreement may be in the form of an insurance policy, cash settlement, or other mechanism as determined by the department. In adopting indemnification requirements for the agreement, the department shall ensure that the state can defend itself against any liability claims against the state for any actions the state undertakes pursuant to this article and pay any resulting judgments. The department shall consult with and, as necessary, use the resources of the office of the Attorney General in preparing and entering into the indemnification agreement.

(g)The applicant has applied for and received all required permits, leases, and approvals issued by any governmental agency, including, but not limited to, a lease issued by the commission if the proposed project involves state tidelands and submerged lands. For structures located in federal waters, all of the following requirements shall be met:

(1)The department and the owner or operator of the structure reach an agreement providing for the department to take title to the platform or facility as provided in Section 6620.

(2)The department acquires the permit issued by the United States Army Corps of Engineers.

(3)The partial removal of the structure is approved by the Bureau of Ocean Energy Management, Regulation and Enforcement of the United States Department of the Interior.

SEC. 21.

 Section 6617 of the Fish and Game Code is repealed.
6617.

Upon a finding that all the requirements of Sections 6615 and 6616 have been met, the department shall grant conditional approval to an application for partial removal of an offshore oil structure.

SEC. 22.

 Section 6618 of the Fish and Game Code is amended and renumbered to read:

6618.6610.
 (a) The cost savings from the partial removal of an offshore oil structure, platform, as determined pursuant to Section 6614, 6609, shall be apportioned and transmitted as described in this section.
(b) Upon receipt of conditional approval pursuant to Section 6617, the owner or operator of the structure Except as provided in subdivision (c), upon acceptance of the transfer by the department pursuant to Section 6605, the transferor shall apportion and directly transmit a portion of the total amount of the cost savings to the entities in subdivision (c) endowment as follows:
(1) Fifty-five percent, if transmitted by the transferor before January 1, 2017.
(2) Sixty-five percent, if transmitted by the transferor on or after January 1, 2017, and before January 1, 2023.
(3) Eighty percent, if transmitted by the transferor on or after January 1, 2023.

(c)Of the total amount of the cost savings to be transmitted pursuant to subdivision (b), the applicant shall directly transmit the following amounts to the following entities:

(c) Upon acceptance by the department pursuant to Section 6605 of the transfer identified pursuant to subdivision (c) of Section 6604, the transferor shall apportion and directly transmit 55 percent of the total amount of the cost savings of the partial removal of the platform subject to the transfer to the department.
(d) If the department’s acceptance of the transfer pursuant to Section 6605 or any other federal, state, or local permit or approval required for the partial removal of the offshore oil platform is permanently enjoined, vacated, invalidated, rejected, or rescinded by a court or governmental agency as the result of litigation challenging the acceptance, and the transferor is required to carry out full removal of the platform, the department or endowment, as applicable, shall promptly return the cost savings to the transferor.
(e) Upon final, nonappealable judicial decisions upholding the department’s acceptance pursuant to Section 6605 and all permits and approvals required for the partial removal of the offshore oil or gas platform or the running of the statutes of limitations applicable to all the permits and approvals, whichever is later, the department or endowment, as applicable, shall directly transmit the following amounts from the total amount of the cost savings transmitted pursuant to subdivision (b) or (c) to the following entities and funds:
(1) Eighty-five percent shall be deposited into the California Endowment for Marine Preservation established pursuant to Division 37 (commencing with Section 71500) of the Public Resources Code.
(2) Ten percent shall be deposited into the General Fund.
(3) Two percent shall be deposited into the Fish and Game Preservation Fund for expenditure, upon appropriation by the Legislature, by the department to pay any costs imposed by this chapter that are not otherwise provided for pursuant to subdivision (b) of Section 6612 and subdivision (e) (a) of Section 6616. 6606. Any moneys remaining in the Fish and Game Preservation Fund, after providing for these costs, shall be used, upon appropriation by the Legislature, first to reimburse the payment of the startup costs described in subdivision (c) of Section 6612, and thereafter to conserve, protect, restore, and enhance the coastal and marine resources of the state consistent with the mission of the department.
(4) Two percent shall be deposited into the Coastal Act Services Fund, established pursuant to Section 30620.1 of the Public Resources Code, and shall be allocated to support state agency work involving research, planning, and regulatory review associated with the application and enforcement of coastal management policies in state and federal waters pursuant to state and federal quasi-judicial authority over offshore oil and gas development. in the coastal zone.
(5) One percent shall be deposited with the board of supervisors of the county immediately adjacent to the location of the facility prior to its decommissioning. The amount paid to the county shall be managed pursuant to paragraph (1) of subdivision (d) of Section 6817 of the Public Resources Code.

SEC. 23.

 Section 6619 of the Fish and Game Code is repealed.
6619.

Upon a determination by the department that the full amount of cost savings has been transmitted pursuant to Section 6618, the department shall grant final approval of the application for partial removal of an offshore oil structure.

SEC. 24.

 Section 6620 of the Fish and Game Code is repealed.
6620.

The department shall not take title to a decommissioned offshore oil structure in open coastal waters or take responsibility for management of the structure pursuant to this article until decommissioning and partial removal of the structure have been completed and both of the following requirements are met:

(a)The partial removal of the structure has been granted final approval by the department.

(b)The state is indemnified, as required in subdivision (f) of Section 6616, from any liability that may result from approving the partial removal of an offshore oil structure or any liability that may result from the ownership of the structure.

SEC. 25.

 Section 6621 of the Fish and Game Code is repealed.
6621.

Upon the department’s final approval of the first application for partial removal of an offshore oil structure pursuant to Section 6619, the conservancy shall create an advisory spending plan for cost savings deposited in the endowment, to provide the Board of Directors of the California Endowment for Marine Preservation with guidance on spending those funds. The conservancy shall update the spending plan no less than once every five years, except the conservancy shall also update the spending plan when each additional application for partial removal is approved. The conservancy shall submit a copy of the spending plan and all updates to the plan to the Legislature, in accordance with Section 9795 of the Government Code, and to the Board of Directors of the California Endowment for Marine Preservation.

SEC. 26.

 Section 71550 of the Public Resources Code is amended to read:

71550.
 (a) The members of the board first appointed shall serve as incorporators of the endowment and shall take whatever actions are necessary to establish the endowment pursuant to the Nonprofit Public Benefit Corporation Law (Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code) once a majority of the board is appointed.
(b) It is the intent of the Legislature that the endowment not be incorporated until the endowment board has received its initial notice of application an offer from the Department of Fish and Game, Wildlife, pursuant to Section 6610 6605 of the Fish and Game Code.

SEC. 27.

 Section 71551 of the Public Resources Code is amended to read:

71551.
 The California Endowment for Marine Preservation shall receive funds generated pursuant to the California Marine Resources Legacy Act (Article 2 (commencing with Section 6420) of Chapter 5 (Chapter 5.5 (commencing with Section 6600) of Part 1 of Division 6 of the Fish and Game Code).

SEC. 28.

 Section 71560 of the Public Resources Code is amended to read:

71560.
 (a) The endowment may receive charitable contributions or any sources of income that may be lawfully received, including loans from the state.
(b) The endowment shall administer any funds it receives in accordance with this division.
(c) (1) Except as provided in paragraph (2), the endowment shall invest and manage any funds it receives so that the investments shall provide a source of income in perpetuity and the principal amount consisting of charitable contributions and donations, including cost savings donated pursuant to Section 6618 6610 of the Fish and Game Code, shall not be spent. Any returns on investments made by the endowment are the only funds that shall be available for expenditure by the endowment.
(2) Ten percent of any funds received by the endowment pursuant to Section 6618 6610 of the Fish and Game Code in a calendar year shall be allocated by the endowment board, pursuant to Section 71552, as grants for projects or programs consistent with the purpose of this chapter within 24 months of receipt of the funds. The majority of these funds shall be granted to state agencies engaged in coastal and ocean protection.
(d) The endowment shall invest and manage any funds it receives in accordance with the Nonprofit Public Benefit Corporation Law (Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code).
(e) The accounts of the endowment shall be audited annually in accordance with generally accepted auditing standards by independent certified public accountants.
(f) The financial transactions of the endowment for any fiscal year may be audited by the California State Auditor’s Office.
(g) Each recipient of assistance by grant, contract, or loan pursuant to this division shall keep records reasonably necessary to disclose fully the amount of the assistance, the disposition of the assistance, the total cost of the project or undertaking in connection with which the assistance is given or used, the amount and nature of that portion of the cost of the project or undertaking supplied by other sources, and other records that will facilitate an effective audit. Each recipient of a fixed price contract awarded pursuant to competitive bidding procedures is exempt from this subdivision.
(h) The endowment, or its authorized representative, and the California State Auditor’s Office shall have access to any records necessary for the purpose of auditing and examining all funds received or expended by the recipients of assistance.