BILL ANALYSIS
SB 546
Page 1
SENATE THIRD READING
SB 546 (Lowenthal)
As Amended September 4, 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.
SB 546
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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, $0.12 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; this
rerefining incentive takes effect on January 1, 2013.
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 costs.
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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 $11 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 research and
demonstration projects.
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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 or polychlorinated biphenyls.
SB 546
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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: 0003009