BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 546|
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UNFINISHED BUSINESS
Bill No: SB 546
Author: Lowenthal (D), et al
Amended: 9/4/09
Vote: 21
SENATE ENV. QUALITY COMMITTEE : 5-2, 4/27/09
AYES: Simitian, Corbett, Hancock, Lowenthal, Pavley
NOES: Runner, Ashburn
SENATE APPROPRIATIONS COMMITTEE : 8-3, 5/11/09
AYES: Kehoe, Corbett, DeSaulnier, Hancock, Leno, Wolk,
Wyland, Yee
NOES: Cox, Denham, Walters
NO VOTE RECORDED: Oropeza, Runner
SENATE FLOOR : 23-15, 5/26/09
AYES: Alquist, Cedillo, Corbett, DeSaulnier, Florez,
Hancock, Harman, Kehoe, Leno, Liu, Lowenthal, Negrete
McLeod, Oropeza, Padilla, Pavley, Romero, Simitian,
Steinberg, Wiggins, Wolk, Wright, Wyland, Yee
NOES: Aanestad, Ashburn, Benoit, Calderon, Cogdill,
Correa, Cox, Denham, Dutton, Hollingsworth, Huff,
Maldonado, Runner, Strickland, Walters
NO VOTE RECORDED: Ducheny, Vacancy
SUBJECT : Used oil
SOURCE : DeMenno/Derdoon
Evergreen Oil, Inc.
CONTINUED
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DIGEST : This bill raises the fee paid by lubricating oil
manufacturers from $0.16 to $0.26 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.
Assembly Amendments (1) reverse the change in the ________
version oil manufacture from $0.06 to $0.065 for every
quart and $0.24 to $0.26 through 12/31/03 and after 1/1/14
those changes would be $0.06 for every quart and $0.24 for
every gallon; (2) increase the amount to be available which
local government may reverse from the State Integrated
Waste Management Board for local used oil collection
purposes; (3) deletes the reversion of the definition of
used oil recycling faculty; (4) requires the Board to
coordinate a _____________ life cycle _____________ of the
use lubricating oil industrial management policies on used
oil collection rates and by 1/1/14 report its funding; (5)
delete costs _______________________ adjustment language;
(6) provides for clarifying language, and (7) adds
co-authors.
ANALYSIS :
Existing law:
1. Pursuant to Health and Safety Code (HSC) commencing with
Section 25250, et seq., establishes management standards
for used oil including:
A. Defines "used oil and 'recycled oil" as oils
that meet specified characteristics including
flashpoint and contaminant levels.
B. Defines "used oil recycling facility", "used oil
storage facility" and "used oil transfer facility.
C. Establishes transportation, testing and storage
requirements.
2. Pursuant to the California Oil Recycling Enhancement Act
(Act) commencing with Section 48600 of the Public
Resources Code:
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A. Prescribes a program to increase the amount of
used oil recycled in California.
B. Establishes the Integrated Waste Management
Board (IWMB) as the implementing agency for the
Act.
C. Establishes a fee of 16 cents per gallon on new
lubricating oil sold in California that is paid by
manufacturers to fund the program activities under
the Act.
D. Provides a recycling incentive payment of 16
cents a gallon to every industrial generator,
curbside collection program, and certified used oil
collection centers for the used oil they collect,
as specified.
E. Provides grants to local governments and other
entities to further the Act.
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.
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
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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 percent 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
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.
10.Updates and clarifies the provisions authorizing CIWMB
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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.
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.
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
percent 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
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adjusted since the inception of the Act.
Rerefined oil . Rerefining is an energy-efficient and
environmentally beneficial method of managing used oil.
50-80 percent 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.
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, requires
out-of-state recycling facilities participating in
California's incentive program to certify that they are
operating in compliance with federal law and meet
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environmental compliance standards.
According to the author's office, 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 Act to better address the current state of used
oil recycling in California.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
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.
SUPPORT : (Verified 7/6/09) (per Senate Natural Resource
Committee)
DeMenno/Kerdoon (co-source)
Evergreen Oil, Inc. (co-source)
California Independent Oil Marketers Association
Coast Oil Company, LLC
Waste Management
OPPOSITION : (Verified 7/6/09) (per Senate Natural
Resource Cmte.)
Independent Waste Oil Collectors and Transporters
Safety-Kleen Systems, Inc.
Thermo Fluids Inc.
Western States Petroleum Association
DLW:do 9/10/09 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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