BILL ANALYSIS
SB 546
Page 1
SENATE THIRD READING
SB 546 (Alan Lowenthal)
As Amended September 1, 2009
Majority vote
SENATE VOTE :23-15
NATURAL RESOURCES 7-1 APPROPRIATIONS 12-5
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|Ayes:|Skinner, Brownley, |Ayes:|De Leon, Ammiano, |
| |Chesbro, | |Charles Calderon, Coto, |
| |De Leon, Hill, Huffman, | |Davis, Fuentes, Hall, |
| |Logue | |Hill, John A. Perez, |
| | | |Skinner, Solorio, |
| | | |Torlakson |
| | | | |
| | | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Knight |Nays:|Conway, Harkey, Miller, |
| | | |Nielsen, Audra Strickland |
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SUMMARY : Raises the fee paid by lubricating oil manufacturers
from $0.16 to $0.24 per gallon; increases the incentives paid for
recycling used oil; increases the testing requirements for used
oil transporters and requires a life cycle analysis of used oil.
Specifically, this bill:
1)Requires testing of each truckload of used oil before it is
shipped to a transfer facility, recycling facility or a facility
located out-of-state. The used oil must not have a flashpoint
of more than 100 degrees Fahrenheit, a concentration of
polychlorinated biphenyls (PCBs) of more than five parts per
million (ppm), and a concentration under1000 ppm for halogens.
2)Exempts out-of-state haulers from the above requirement for used
oil that is transported to an out-of-state facility that has
entered into an agreement with the Department of Toxic
Substances Control (DTSC) that is equivalent to the testing and
testing-related reporting requirements for an in-state facility.
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3)Revises and clarifies various definitions, including "rerefined
oil" and "used oil hauler."
4)Revises the requirements for certifying a used oil recycling
facility to include out-of-state facilities and establishes
certification requirements for rerefining facilities, as
specified. Authorizes the California Integrated Waste Management
Board (CIWMB) to certify or recertify a used oil recycling
facility located out-of-state. Specifies that certified
out-of-state recycling facilities are eligible to receive the
recycling incentive for California used oil.
5)Increases the amount of the fee paid by manufacturers from 16
cents per gallon to $0.26 per gallon of new lubricating oil sold
in California. For lubricating oil containing at least 70%
rerefined oil, $0.16 per gallon. On and after January 1, 2014,
decreases the fee to $0.24 per gallon.
6)Increases the amount of the recycling incentive paid to
certified collection centers, industrial generators, and
curbside collection operators from $0.16 per gallon to $0.40 per
gallon. Establishes a rerefining incentive of $0.02 per gallon
on and after 2014 and authorizes the
California Integrated Waste Management Board (CIWMB) to increase
this incentive beginning 2015, as specified.
7)Requires that used oil be treated to the "recycled" oil standard
of purity or the standard for "rerefined oil" to qualify for
payment of the incentive.
8)Authorizes CIWMB to certify or recertify a used oil rerefining
facility located out-of-state if the facility certifies to CIWMB
that the facility produces rerefined base lubricant meeting the
specifications for rerefined oil. Specifies that certified
out-of-state rerefining facilities are eligible for rerefining
incentive for California used oil.
9)Specifies that out-of-state facilities eligible for an incentive
are subject to audit by DTSC to verify the applicable
requirements for certification. Requires out-of-state
facilities to enter into an agreement with DTSC to pay DTSC's
full expenses for conducting the audit, including any inspection
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costs.
10)Updates and clarifies the provisions authorizing CIWMB to issue
payments to local governments for local used oil collection
programs and increases the total amount available for this
purpose from $10 million to $13 million annually.
11)Makes various changes to the requirements for certified used
oil collection centers.
12)Requires CIWMB, using existing resources, to contract for an
independent life cycle analysis of the used lubricating and
industrial oil management process.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, increased annual revenues from used oil fees in the
millions of dollars and likely in excess of the costs imposed by
the bill. Annual costs, beginning in 2013-14, ranging from
$500,000 to $1 million for rerefined oil incentive payments, and
reduced annual costs of about $1 million in recycling incentive
payments. Increased annual payments to local governments to local
governments of as much as $3 million. Minor and absorbable
one-time costs to CIWMB to expand the existing used oil program.
COMMENTS : According to the author, this bill encourages the best
re-use of used oil in California and reduces toxic air pollution
resulting from some uses of used oil. It also updates the
California Oil Recycling Enhancement Act (Act) to better address
the current state of used oil recycling in California.
Background . CIWMB's Used Oil Recycling Program (Program) has a
structure similar to the "bottle bill" program at the Department
of Conservation which establishes a deposit on beverage containers
with the unredeemed deposits used to fund collection, recycling
and market development efforts. The CIWMB Program develops and
promotes alternatives to the illegal disposal of used oil by
establishing a statewide network of collection opportunities and
undertaking outreach efforts to inform and motivate the public to
recycle used oil. Program responsibilities include: providing
the public with convenient collection locations for used oil;
increasing the demand for rerefined oil; developing methods to
motivate the public to recycle their used oil; and, providing
grants to local governments, nonprofit organizations, and for
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research and demonstration projects.
The Act, which is administered by CIWMB, was passed in 1991 and is
designed to discourage the illegal disposal of used oil. This law
requires oil manufacturers to pay CIWMB $0.16 for each gallon of
lubricating oil sold in California. Registered industrial
generators, curbside collection programs, and certified collection
centers are eligible to receive $0.16 for each gallon of used
lubricating oil recycled. The fee provides between $15 and $19
million per year to fund program activities. $3 million is
allowed for administration, approximately 20% is used to pay the
recycling incentives; and the remainder is used for grants to
local governments and non-profit groups. The fee and incentive
has not been adjusted since the inception of the Act.
Rerefined oil . Rerefining is an energy-efficient and
environmentally beneficial method of managing used oil. 50-80%
less energy is required to produce a gallon of rerefined base
stock than a base stock from crude oil. Rerefined oil is a
lubricant base stock or oil base that has been derived from used
oil and was processed using a series of mechanical or chemical
methods, or both, including vacuum distillation followed by
solvent refining or hydrotreating and capable of meeting the
Physical and Compositional Properties, as defined under the
American Society for Testing and Materials (ASTM) D6074-99 and
processed into a material that has a quality level suitable for
use in a finished lubricant.
Other uses of used oil . Used oil can also be treated and used as
a fuel in marine diesel engines. Asphalt flux used in roofing
materials is another marketable product. Outside of California it
is often burned for energy. Large industrial boilers burn the
used oil and for energy and on a smaller scale some quantity of
used oil is burned in specially designed heaters to provide space
heating for small businesses.
Transport and testing of used oil . Used oil in California must be
handled as a hazardous waste. Most used oil testing requirements
are imposed at recycling, storage and recycling facilities;
however, used oil that is picked up from generators and shipped
directly out of California is not tested. If the oil tests
outside the standards for used oil, it must be managed differently
to protect against the hazardous constituents such as heavy metals
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or polychlorinated biphenyls.
Out-of-state recycling facilities . Currently, used oil that is
eligible for incentive payments must only go to approved
facilities in California that meet specified standards. Used oil
that is shipped out-of-state should be managed at facilities that
meet federal requirements. This bill, for used oil that is part
of the Act, would require out-of-state recycling facilities
participating in California's incentive program to certify that
they are operating in compliance with federal law and meet
environmental compliance standards.
Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916)
319-2092
FN: 0002752