BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 333 (Wieckowski) - Medical waste. Amended: June 24, 2014 Policy Vote: EQ 7-0 Urgency: No Mandate: Yes (see staff comment) Hearing Date: August 4, 2014 Consultant: Marie Liu This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 333 makes numerous changes to the Medical Waste Management Act (MWMA) including, among other things, codifying existing federal preemptions and requirements, modifying definitions, creating procedures for the generation of medical waste from a temporary event, modifying contracts with medical waste transporters for the collection of fees, and preempting local programs regarding infectious waste. Fiscal Impact: Initial costs of $340,000 annually from the Medical Waste Management Fund (special) for FY 2015-16 and FY 2016-17 to assist with compliance with the changes to the MWMA. Initial costs of $166,000 for FY 2015-16 and FY 2016-17 then $145,000 thereafter from the Medical Waste Management Fund to DPH to review and approve treatment technologies. Minor revenue losses to the Medical Waste Management Fund (special) by allowing medical waste transporters to keep an additional 2.5% of the small generator annual fee for administrative costs. Unknown, possibly minor, cost pressures to the Medical Waste Management Fund (special) by deleting the ability for DPH to adjust multiple fees through regulation. Background: The MWMA was created in response to several incidents of medical waste washing up on San Diego County beaches, as well as several reports of medical waste being disposed of in dumpsters and trashbins. In 1989 and 1990, AB 109 (Hayden) and AB 1641 (Mojonnier) were ultimately combined to form the MWMA to, according to the original Legislative intent, "comprise a single, integrated, and complementary approach to the storage, treatment, transportation, and disposal of medical waste." AB 333 (Wieckowski) Page 1 The MWMA allows any local ordinance regulating infectious waste that was in existence before 1990 and regulated both large and small quantity generators to continue. The MWMA also allows local governments to elect to be the enforcement agency of the MWMA and to assess appropriate fees for their enforcement activities. Currently 25 counties rely on the state for enforcement. Proposed Law: This bill has numerous provisions to modify the MWMA. Specifically, this bill would (only provisions that potentially have a fiscal impact are listed): Specify that a "medical waste management plan" is a document completed by generators of medical waste that describes how the medical waste generated at their facility shall be segregated, handled, stored, packaged, treated, or shipped for treatment (§117710). Require DPH to approve treatment technologies for the treatment of medical waste (§117918). Delete the ability for the Department of Public Health (DPH) to adjust by regulation the registration and inspection fees for small quantity generators, registration and inspection fees for large quantity generators, application and annual fees for transfer stations, and application fees alternative treatment technologies (§§117920, 117990, 118045, and 118245) However, DPH would retain the ability to adjust fees by regulations for medical waste treatment facility permits and inspections. Allow a medical waste transporter to retain 7.5% rather than 5% of the annual small quantity generator fee which it collects pursuant to a contract with DPH. This bill would also specify that generators are only required to pay the fee once annually (§117924). Staff Comments: Due to the large number of changes that this bill makes to the MWMA, DPH anticipates additional temporary workload to assist compliance with the new requirements including meeting with stakeholder groups and local enforcement agencies, developing training and guidance materials to assist local enforcement agencies and the regulated industry. DPH anticipates approximately $340,000 of additional staff workload annually for FY 2015-16 and 2016-17 for these activities. AB 333 (Wieckowski) Page 2 This bill also requires DPH to approve all types of treatment technology for infectious waste. To complete this task, DPH anticipates initial costs of $166,000 for two years to meet with stakeholders, review treatment technologies, and promulgate regulations establishing a method for approval. Ongoing costs after the initial period to review and approve new technologies would be $145,000 annually. This bill raises the amount that a medical waste transporter can keep as an administrative fee from 5% to 7.5% when it has contracted with DPH for the collection of small quantity generator annual fees. Currently the only medical waste transporter that has such a contract with DPH is Stericycle, the sponsor of the bill. According to Stericycle, because the annual fee that is being collected is only $25, the current administrative fee of 5% or $1.25 does not cover the cost of collecting the fee, particularly since it the fee must be collected separately from any other billing. DPH estimates that this provision will result in a loss of approximately $2,000 in revenue annually. This bill deletes the ability for DPH for adjust certain fees through regulations, though the ability for the fees to be adjusted by Department of Finance to reflect changes in salaries and operating expenses will remain. Staff notes that deleting the ability to adjust fees to cover program costs other than through the Department of Finance for certain program increases may make it difficult to assure that fees cover DPH's enforcement and oversight costs. Staff notes that it is not clear why DPH should maintain the ability to adjust fees by regulations regarding medical waste treatment facilities, but not other fees.