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CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

91

Introduced by Senators Blakespear and Gonzalez

(Coauthors: Senators Allen and Stern)

February 19, 2026

An act to add Article 4.5 (commencing with Section 13277) to Chapter 4 of Division 7 of the Water Code, relating to refineries.

Vote: majority   Appropriation: no   Fiscal committee: yes   Local program: no

LEGISLATIVE COUNSEL’S DIGEST

Existing law establishes the State Water Resources Control Board in the California Environmental Protection Agency (CalEPA) and the California regional water quality control boards which prescribe waste discharge requirements in accordance with the Federal Water Pollution Control Act and the Porter-Cologne Water Quality Control Act.

Existing law, the Petroleum Industry Information Reporting Act of 1980, requires refiners, as defined, to report monthly to the State Energy Resources Conservation and Development Commission (Energy Commission), for each of their refineries, specified information, and requires that any confidential information pertinent to the responsibilities of the Energy Commission, as provided, which is obtained by another state agency be available to the Energy Commission and be treated in a confidential manner.

This bill would require, no later than December 31, 2028, every refiner, as defined for purposes of the bill, to submit to CalEPA a retirement plan setting forth information concerning decommissioning and site remediation for every refinery it owns, operates, or controls, as provided. The bill would require the CalEPA, no later than 6 months following the submission of the retirement plan, to review the retirement plan for completeness and reasonableness and to make a determination as to whether the retirement plan complies with the requirements imposed by the bill. The bill would require CalEPA, if it determines that the retirement plan complies with the bill’s requirements, to make the retirement plan available on CalEPA’s internet website for public comments for not less than 45 days. The bill would authorize CalEPA to require further revisions to the retirement plan after the public comment period, as provided, before it is deemed final. The bill would require CalEPA, after CalEPA has determined that no further revisions are necessary, to promptly post the final retirement plan on its internet website.

This bill would require a refiner who who, on or after January 1, 2026, gives notice of intent to permanently shut down, shut down to reconfigure, or sell a refinery in a transaction that may result in a refinery shutting down or reconfiguring, as provided, to submit either the required retirement plan, or, if a final retirement plan has been released, an update of the retirement plan within a specified timeframe, as provided. The bill would require, on or before December 31, 2027, CalEPA to publicly provide an overview of the methods, costs, and timelines associated with soil and groundwater remediation that have been employed at refineries that have undergone decommissioning and remediation and to update the overview, as provided.

This bill would make information filed pursuant to the above-described provisions confidential information, as provided.

The bill would require a refiner to file the final retirement plan concurrently with the Energy Commission and the Division of Occupational Safety and Health. The bill would authorize CalEPA, the Energy Commission, and the Division of Occupational Safety and Health to share the information with the Legislature, a state or local any governmental agency, or a local government, including an air pollution control district or an air quality management district, only if the Legislature, the state or local governmental agency, or the local government that receives the information agrees to maintain the confidentiality of the information. The bill would further require any information that is, or may be, accessible by the public, as provided, by CalEPA, the Department of Toxic Substances Control, a certified unified program agency, or a local government, to be made publicly available even if that information is also contained in the retirement plan.

This bill would require, on or before December 31, 2027, CalEPA, in coordination with the Energy Commission, to compile a survey of existing local, state, and federal statutory and regulatory requirements applicable to refiners concerning decommissioning, closure, financial assurance, and site remediation obligations, as provided, for a specified purpose.

This bill would require CalEPA, no later than one year after the retirement plans are deemed final, to publish publicly on CalEPA’s internet website a report assessing the total decommissioning and remediation liabilities for refineries in the state, and identify opportunities for greater transparency prior to the closure notice, as provided.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

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

SECTION 1.

The Legislature finds and declares all of the following:

(a) California has entered a transition period in which its legacy petroleum fuels system is declining while the replacement decarbonized transportation system is still scaling up. During this period, the continued operation of California’s remaining refineries serves critical public interests, including fuel supply reliability, employment, and regional economic stability, and the state has a responsibility to understand and address the pressures threatening that continued operation before closures become inevitable.

(b) Multiple recent petroleum refinery retirement announcements have exposed the absence of a state framework for understanding why refineries are closing, what barriers to continued operation exist, and what policy interventions could support a stable transition. The state has responded to closures reactively, without the information or tools needed to evaluate whether those outcomes were avoidable.

(c) The state cannot manage the transition one crisis at a time. But the lesson of recent closures is not only that the state needs better closure management tools; it is that the state lacked early enough visibility into operational, financial, and regulatory pressures to evaluate strategic actions to manage the transition in the public’s best interest. Proactive governance means building that visibility now, while California’s remaining refineries are still operating.

(d) California’s petroleum infrastructure is almost entirely privately owned, and the state cannot directly control the timing or sequence of its retirement. The state’s role is therefore to build the planning, transparency, and financial accountability frameworks that align private retirement decisions with the public interest.

(e) Waiting for a closure announcement to gather information limits the state’s ability to evaluate and act on policy options regarding continued operation, stabilize fuel supply, reduce workforce or community impacts, or evaluate policy interventions that could sustain systemwide reliability. These interventions could support infrastructure operations to maintain safety and reliability through governmental coordination and transparency and promote investor confidence.

(f) Petroleum refineries in the state have been in operation for many decades, in some cases for over a century, commencing their operations in most cases long before the advent of modern environmental laws. For that reason, refinery sites tend to be heavily contaminated with hydrocarbons and associated toxic chemicals that can pose a threat to public health both offsite and onsite, and require costly and prolonged efforts to clean up.

(g) Sea level rise associated with climate change will cause groundwater levels to rise and increase flooding, especially in coastal areas. Most refineries in the state are near the ocean or connected waters due to their logistical shipping needs. Contamination at refinery sites is of particular concern because the rising groundwater levels may cause subsurface contaminants to migrate, increasing the risk of negative health and environmental impacts.

(h) Explicit requirements exist in other energy sectors to develop, disclose, and plan for retirement obligations to ensure orderly and well-managed decommissioning, and prevent the cost of retirement from being shifted onto taxpayers. These industry-specific requirements are in place for nuclear generating facilities, wind and solar installations, and fossil fuel extraction, for example. However, there are no requirements specifically addressing refinery retirements, even though refineries pose closure challenges of comparable or greater scale and complexity.

(i) While refiners who are publicly traded corporations are required to report their asset retirement obligations to the United States Securities and Exchange Commission in quarterly and annual reports, applicable accounting principles have been interpreted to allow refiners to delay presenting a cost estimate for those obligations until a firm retirement date is announced. Even when refinery asset retirement obligation values are eventually reported to the commission, the calculation of those obligations does not necessarily include the costs of postretirement site remediation. This reporting gap leaves the state, host communities, and investors without the information needed to plan responsibly, well before a closure date is set.

(j) The state has a strong interest in obtaining a full understanding of refinery operational and financial health, including decommissioning and remediation obligations, not only to prevent those costs from falling on taxpayers, but to enable the state to distinguish between refineries facing genuine market-driven transition and those facing pressures that state policy could address.

(k) Communities that are economically dependent upon refineries are under pressure to see the land returned to productive use as soon as possible. State and local governments have historically played a role in facilitating rapid redevelopment, such as offers of tax increment financing or protecting buyers from certain liabilities. Without advance understanding of the extent of pollution, the scope of remediation, and the timeline and sequencing of necessary cleanup work, state and local governments may be unable to make informed financial decisions or attract necessary investors.

(l) Communities that are economically dependent on refineries also face fiscal exposure from the loss of property and other tax revenue, and workforce exposure from the loss of high-wage jobs that comparable regional industries are not positioned to absorb at similar wages or scale. Long-term planning, remediation, and redevelopment of former refinery sites represents a significant challenge, but meeting that challenge can be an opportunity to support the creation of high-road jobs and new avenues of economic development.

(m) A June 27, 2025, letter from State Energy Resources Conservation and Development Commission vice chair Siva Gunda to Governor Gavin Newsom recognized the value to “identify challenges, opportunities, and strategies for the future of land affected by the transition (e.g. remediation, marketability, and value), such as Asset Retirement Obligations and standards for refinery remediation and decommissioning plans.”

(n) Senate Bill 237 (Chapter 118 of the Statutes of 2025) of the 2025–26 Regular Session directed the State Energy Resources Conservation and Development Commission to submit an assessment to the Legislature and Governor this year that, in part, “evaluates the recommendations and strategies put forward by” that same June 27 letter. That assessment has found that California has made meaningful governance progress, but that significant gaps remain, including the absence of a systematic framework for assessing what is driving individual refinery closures, and what the state’s options are for serving the public interest. Moreover, the physical and financial legacies of petroleum infrastructure, remediation obligations that in other industrial sectors have repeatedly fallen to the public, require the same kind of forward-looking accountability that California has applied in other contexts.

(o) Senate Bill 237 (Chapter 118 of the Statutes of 2025) of the 2025–26 Regular Session directed the State Energy Resources Conservation and Development Commission to submit an assessment to the Legislature and the Governor. The State Energy Resources Conservation and Development Commission issued a draft assessment report on May 1, 2026, stating: “Even if more information becomes available after operations have ceased, more comprehensive, standardized, and transparent estimates of site remediation needs and methods ahead of time could enable the state and local communities to better prepare for and manage the myriad changes future petroleum infrastructure retirements will bring. The state, host communities, and investors would benefit from more transparency into the liability a company bears for decommissioning and remediation of a refinery or other major petroleum infrastructure site and how that is calculated.”

(p) Generally accepted accounting principles dictate that calculating the fair value of an asset retirement obligation requires a settlement date to estimate the present value. However, refiners’ financial reports state that their plants have “indeterminate lives for the purposes of estimating asset retirement obligations” because dates upon which they would retire assets cannot be reasonably estimated. Even when these asset retirement obligations are disclosed, they are not standardized for the activities required, the level of remediation required, or the extent to which the company will cover the costs.

SEC. 2.

Article 4.5 (commencing with Section 13277) is added to Chapter 4 of Division 7 of the Water Code, to read:

Article 4.5. Retirement Plan for Oil Refineries

13277.

For purposes of this article, the following definitions shall apply:

(a) “CalEPA” means the California Environmental Protection Agency.

(b) “Energy Commission” means the State Energy Resources Conservation and Development Commission.

(c) “Refiner” has the same meaning as in Section 25127 of the Public Resources Code, and additionally includes persons who own, operate, or control the operations of one or more facilities that formerly processed crude oil feedstock, but now process renewable feedstocks and otherwise meet that definition.

(d) “Refinery” has the same meaning as in Section 25128 of the Public Resources Code, and additionally includes facilities that formerly processed crude oil feedstocks, but now process renewable feedstocks and otherwise meet that definition.

(e) “Retirement plan” means the plan by a refiner for the decommissioning and remediation of a refinery.

13278.

(a) Except as provided in subdivision (h), no later than December 31, 2028, every refiner shall submit to CalEPA a retirement plan setting forth information concerning decommissioning and site remediation for every refinery it owns, operates, or controls. The retirement plan shall be detailed and technically rigorous, and shall include all of the following components:

(1) A plan for decommissioning the refinery, including, but not limited to, cleaning, removal, and disposal of physical refinery infrastructure, such as refining equipment, tanks, and pipelines. The plan shall include all of the following:

(A) A technical description of the anticipated decommissioning processes.

(B) The estimated cost and duration of decommissioning.

(C) Documentation of financial assurances required under existing law.

(D) The estimated workforce needed during and one year prior to decommissioning, with anticipated job classifications, workforce numbers within each classification, and duration of employment by phase.

(E) A specific description of the applicable local, state, or federal laws, regulations, or orders that impose financial assurances for completion of decommissioning on the owner or operator.

(2) A description of anticipated site remediation measures, including, but not limited to, remediation of soil and groundwater and any needed measures to address associated offsite contamination. The description shall include all of the following:

(A) A technical description of anticipated site remediation processes.

(B) The estimated cost and duration of remediation of the site to the intended land use of the site.

(C) Documentation of financial assurances required under existing law.

(D) The estimated workforce needed for remediation activities, with anticipated job classifications, workforce numbers within each classification, and duration of employment by phase.

(E) A specific description of the applicable local, state, or federal laws, regulations, or orders that impose financial assurances for completion of remediation on the owner or operator.

(b) The development and presentation of the retirement plan required pursuant to subdivision (a) shall be governed by all of the following principles, methods, and assumptions:

(1) The retirement plan shall separately specify each component of decommissioning and site remediation, presenting a separate description and cost estimate associated with each component.

(2) In preparing the retirement plan, the refiner shall consult with all state and local regulatory agencies with jurisdiction over the decommissioning and remediation, including, but not limited to, the California Environmental Protection Agency, the relevant regional board, the board, the Department of Toxic Substances Control, the Division of Occupational Safety and Health, the relevant air quality management district or air pollution control district, and the relevant certified unified program agency, as defined in Section 25404 of the Health and Safety Code. A record of the consultation shall be included in the retirement plan.

(3) The retirement plan shall fully document the basis for every cost calculation, based upon, as appropriate, both site-specific estimates and the cost of reasonably comparable decommissioning and remediation at other refineries, both in state and out of state.

(4) If the information needed to accurately estimate costs is unknown, the refiner shall undertake a diligent investigation to obtain that information, including, but not limited to, making all appropriate inquiries, as defined in Part 312 (commencing with Section 312.1) of Title 40 of the Code of Federal Regulations, as that part read on the date of enrollment. The retirement plan shall document all efforts made to seek and identify that information. Any missing information that cannot be obtained shall be substituted in the calculation by an approximation arrived at in consultation with regulatory agencies identified in paragraph (2) and environmental professionals, as defined in Part 312 (commencing with Section 312.1) of Title 40 of the Code of Federal Regulations, and the basis of that approximation shall be set forth in the retirement plan.

(5) The estimate shall present results that assume a refinery retirement date of 10 years from the submittal of the draft retirement plan for the purpose of establishing present value. This retirement date shall be used for cost estimations within the retirement plan and should not be construed as a bona fide intention or direction to close at that time.

(6) The estimated methods, costs, and timelines of soil and groundwater remediation in the retirement plan shall be reasonably consistent, as applicable, with the overview prepared pursuant to subdivision (i). CalEPA shall consider factors including, but not limited to, length of operation, facility capacity, and levels of remediation in determining consistency of the retirement plan with the overview.

(7) The retirement plan may identify, as applicable, the refiner’s intent to sell, transfer, or otherwise convey the refinery to a third party, including a developer or other prospective purchaser, for the purpose of completing decommissioning and site remediation. If that intent is disclosed, the retirement plan shall identify, to the extent known, the prospective purchaser or category of purchaser, the anticipated timeline for transfer, and how decommissioning and remediation obligations are anticipated to be allocated between the refiner and the purchaser.

(8) In satisfying the requirements of subdivision (a), a refiner may incorporate by reference, and upon attachment of the relevant document, any existing local, state, or federal filing, permit, retirement plan, or other regulatory submission that addresses a required component of the retirement plan, provided that the refiner demonstrates to CalEPA, pursuant to Section 13279, that the incorporated material is current, applicable to the refinery, and sufficient in scope and detail to satisfy the corresponding requirement of this section. If an incorporated submission only partially satisfies a requirement, the refiner shall supplement it as necessary to achieve full compliance.

(c) (1) No later than six months following submission of the retirement plan required by subdivision (a), CalEPA shall review the retirement plan required by subdivision (a) for completeness and reasonableness and make one of the following determinations:

(A) The retirement plan complies with all the requirements of subdivisions (a) and (b).

(B) The retirement plan requires minor, nonsubstantive corrections to comply with all the requirements of subdivisions (a) and (b).

(C) The retirement plan does not comply with all the requirements of subdivisions (a) and (b). If CalEPA makes this determination, it shall disclose the specific, material deficiencies demonstrating why the retirement plan does not comply with all the requirements of subdivisions (a) and (b).

(2) If CalEPA determines the retirement plan does not comply with all the requirements of subdivisions (a) and (b), CalEPA shall immediately notify the refiner of the failure to comply with these requirements and the refinery shall revise its retirement plan to address the deficiencies and resubmit the retirement plan to CalEPA within 60 days, unless CalEPA determines that an extension of time, not to exceed six months, is required.

(d) Once CalEPA has determined that no further revisions are necessary, the retirement plan becomes final.

(e) The refiner shall file the final retirement plan concurrently with the Energy Commission and the Division of Occupational Safety and Health.

(f) Retirement plans do not limit the scope of, or appropriate measures for, decommissioning and remediation at any refinery, or limit liability for that decommissioning and remediation or for contamination associated with a refinery site. The actual decommissioning and remediation processes carried out upon closure may deviate from the retirement plans due to new or updated information. The retirement plan shall not by itself establish remediation requirements, cleanup standards, liability determinations, binding cost estimates, or financial assurance obligations.

(g) Refiners shall present to CalEPA, upon request, but no less often than every 10 years, beginning 10 years from the date the retirement plan is final, and every 10 years thereafter pursuant to subdivision (c), updates to the retirement plan incorporating any new information that has become available, including, but not limited to, information concerning site conditions, potential or likely decommissioning and remediation methods, any updates to CalEPA’s overview developed pursuant to subdivision (i), updating the retirement and remediation cost estimate, and the cost of relevant services.

(h) (1) A refiner who who, on or after January 1, 2026, gives notice of intent to permanently shut down, shut down to reconfigure, or sell a refinery in a transaction that may result in a refinery shutting down or reconfiguring pursuant to subdivision (p) of Section 25354 of the Public Resources Code shall submit either the retirement plan required pursuant to subdivision (a) or, if a final retirement plan has been released pursuant to subdivision (d), an update of the retirement plan as described in subdivision (g), either within 90 days after the notice of intent is provided, or 90 days after the release of the overview developed pursuant to subdivision (i), whichever is later.

(2) If the retirement plan pursuant to paragraph (1) is determined to comply with subdivisions (a) and (b), CalEPA shall make the retirement plan available on CalEPA’s internet website for public comment for not less than 45 days. After the public comment period, CalEPA may require the refiner to make further revisions to the retirement plan consistent with paragraph (2) of subdivision (c) before the retirement plan is deemed final.

(3) If CalEPA has determined that no further revisions are necessary, the retirement plan becomes final and CalEPA shall promptly post the final retirement plan on CalEPA’s internet website.

(i) On or before December 31, 2027, CalEPA shall publicly provide an overview of the methods, costs, and timelines of soil and groundwater remediation that have been employed for decommissioning and remediation at refineries, and any additional information CalEPA deems appropriate. CalEPA may consult with state and local regulatory agencies in preparing the overview, as applicable. CalEPA shall update the overview, as appropriate, based on the availability of new data regarding soil and groundwater remediation at refineries.

(j) (1) Notwithstanding any other law, information Information filed pursuant to this section, except for the information filed pursuant to subdivision (h), (h) or described in subdivision (k), is confidential information not subject to public disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).

(2) CalEPA, the Energy Commission, and the Division of Occupational Safety and Health may share information filed pursuant to this section with the Legislature, a state or local any governmental agency, or a local government, including an air pollution control district or an air quality management district, only if the Legislature, the state or local governmental agency, or the local government that receives the information agrees to maintain the confidentiality of the information.

(k) Any information that is, or may be, accessible by the public, including, but not limited to, enforcement, investigation, remediation, corrective action, permit, or other similar information, by CalEPA, the Department of Toxic Substances Control, a certified unified program agency, or a local government, shall be made publicly available even if that information is also contained in the retirement plan.

13279.

(a) On or before December 31, 2027, CalEPA, in coordination with the Energy Commission, shall compile a survey of existing local, state, and federal statutory and regulatory requirements applicable to refiners concerning decommissioning, closure, financial assurance, and site remediation obligations. The survey shall identify, for each applicable requirement of this article, the agency with jurisdiction, the timeline under which the existing requirement is triggered, and the scope of the obligation.

(b) CalEPA shall use the information provided by the survey pursuant to subdivision (a) alongside the accompanying documentation submitted by the refiner of any relevant filings, permits, or other regulatory submissions pursuant to paragraph (8) of subdivision (b) of Section 13278 to determine whether existing requirements are sufficient in scope and detail to satisfy a corresponding requirement of retirement plan obligations in Section 13278.

13279.5.

(a) CalEPA, in consultation with the Energy Commission, shall, no later than one year after the retirement plans are deemed final pursuant to subdivision (d) of Section 13278, publish publicly on CalEPA’s internet website a report assessing the total decommissioning and remediation liabilities for refineries in the state. state and identify opportunities for greater transparency prior to the closure notice. This report shall do all of the following:

(1) Protect confidential information or other information that may be subject to protection under the Petroleum Industry Information Reporting Act of 1980 (Chapter 4.5 (commencing with Section 25350) of Division 15 of the Public Resources Code) or other applicable laws. laws,

(2) Aggregate including by aggregating information to the extent necessary to ensure confidentiality.

(2) Include consideration of the existing financial assurances that operating refineries are subject to under local, state, and federal laws and regulations.

(3) Assess the adequacy of existing financial assurance mechanisms to cover decommissioning and remediation costs.

(4) Include coordination with state and local agencies as CalEPA deems necessary and appropriate.

(b) Notwithstanding the requirements contained in the Public Contract Code or the State Contracting Manual, CalEPA may enter into contracts to develop the report required by subdivision (a). The contracts shall not require the review, consent, or approval of the Department of General Services or any other state department or agency.

SEC. 3.

The Legislature finds and declares that Section 2 of this act, which adds Article 4.5 (commencing with Section 13277) to Chapter 4 of Division 7 of the Water Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:

It is in the public interest to ensure that certain information pertaining to the decommissioning and site remediation of refineries is made available to the public while balancing the protection of confidential information.