BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
546 (Lowenthal)
Hearing Date: 05/11/2009 Amended: 04/20/2009
Consultant: Brendan McCarthy Policy Vote: EQ 5-2
SB 546 (Lowenthal)
Page 2
_________________________________________________________________
____
BILL SUMMARY: SB 546 makes a variety of changes to the statutes
regulating used lubricating oil. The bill raises the fee paid by
lubricating oil manufacturers. The bill increases the incentives
paid for recycling used oil and also reduces the number of used
oil collectors that can apply for incentives. The bill increases
the testing requirements for used oil transporters and requires
that transporters be inspected annually.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Waste Board Enforcement $100
$100Special *
DTSC Enforcement Unknown, potentially up to $1,000Special
*
Additional grants to local $3,500 $7,000
$7,000Special *
Governments
Reduced incentive payments ($650) ($1,300)
($1,300)Special *
(net effect)
New incentive payments $600 Special
*
for re-refined oil
* California Used Oil Recycling Fund. Fully offset by additional
fee revenues.
_________________________________________________________________
____
STAFF COMMENTS:
Under current law, manufacturers of lubricating oil pay a fee of
$0.16 per gallon of lubricating oil sold in the state. Revenues
derived from this fee are used for regulating used oil disposal,
providing incentive payments for used oil collected, and to
provide grants to local governments to encourage recycling of
used oil.
SB 546 (Lowenthal)
Page 2
SB 546 makes a variety of changes to the statutes governing used
lubricating oil.
The bill increases the fee paid by manufacturers from $0.16 per
gallon to $0.24 per gallon on lubricating oil sold in the state.
This is estimated to generate about $8 million per year in
additional fee revenues. Beginning in 2011, the bill allows the
fee level to be adjusted for inflation.
The bill increases the incentive payments made to collection
centers, industrial generators, and curbside collectors from
$0.16 per gallon to $0.40 per gallon. The bill eliminates
payments of incentives for used oil that is generated by
certified used oil collection centers rather than collected from
the public. (In other words, for auto mechanics or oil change
service providers, incentives would not be paid for the used oil
they generate themselves, only for used oil they collect from
the public.) This provision of the bill would generate a net
savings of $1.3 million because the increase in incentive
payments is estimated to be more than offset by limiting
incentive payments to used oil collected exclusively from the
public.
The bill requires additional testing of used oil before it is
shipped from a collection point to a transfer facility,
recycling facility, or an out-of-state facility. (The purpose of
the testing is to determine whether the used oil has been
contaminated with specified pollutants.) The bill specifies
requirements for the entity performing the tests. The bill
requires the Department of Toxic Substances Control to inspect
used oil transporters annually to determine compliance.
The bill changes the definition of "used oil hauler" to include
those that transfer oil to out-of-state facilities. The bill
also increases the annual allocation of funds for oversight of
used oil facilities from $250,000 to $350,000.
With respect to used oil collection facilities, the bill allows
the California Integrated Waste Management Board to reimburse
collection facilities for contaminated oil.
The bill changes a statutory funding formula for grants with a
more general requirement that grant funds be used in furtherance
of the California Oil Recycling Enhancement Act. The bill
SB 546 (Lowenthal)
Page 2
increases the amount of funding available to local jurisdictions
from an allowed $10 million to $13 million annually. (Currently,
payments to local governments are limited to $6 million per year
due to a low fund balance. The bill authorizes these
expenditures to be $13 million per year and provides sufficient
additional revenue to do.)
The bill establishes certification requirements for oil
re-refining facilities. After 2014, the bill requires the
California Integrated Waste Management Board to pay an incentive
payment of $0.02 per gallon for re-refined oil and allows the
Board to increase the incentive payment provided that increased
expenditures do not adversely affect the fund balance. Based on
current levels of re-refining of used oil, the Waste Board
estimates that this provision will result in costs of $600,000
per year.
The bill authorizes the Waste Board to expend funds to build
public and private partnerships to increase recycling of used
oil.
The estimated net impact of the changes in the bill is the
generation of about $1.6 million in revenues beyond the
expenditures required in the bill.