BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 777 HEARING: 5/1/13
AUTHOR: Calderon FISCAL: Yes
VERSION: 4/23/13 TAX LEVY: No
CONSULTANT: Weinberger
FIREWORKS SALES AND DISPOSAL
Makes numerous amendments to the state laws governing
fireworks sales and disposal.
Background and Existing Law
The State Fireworks Law establishes comprehensive rules
governing the use, manufacture, import, export, and sale of
fireworks. The law defines "dangerous fireworks" and
"exempt fireworks." "Safe and sane" fireworks are any
fireworks which do not come within the definition of
"dangerous fireworks" or "exempt fireworks."
State law requires various entities, including the State
Fire Marshal (SFM), to seize certain prohibited fireworks
and requires an authority that seizes fireworks to notify
the SFM of the seizure and provide specified information.
The law requires the SFM to dispose of, fireworks, and
specifies procedures for disposing of dangerous fireworks.
The law authorizes the SFM to license retailers to sell
certified "safe and sane" fireworks from June 28 to July 6
each year, unless otherwise prohibited by local ordinance.
Currently, about 290 California communities permit the sale
and use of state-approved fireworks each 4th of July.
In anticipation of the millennial celebration, the
Legislature authorized the SFM to issue a one-time retail
license to permit the sale of certified fireworks from 9:00
on December 26, 1999, until midnight of January 1, 2000 (AB
2090, Miller, 1998).
The State Fireworks Law authorizes the State Fire Marshal
to issue a wholesaler's license to allow the sale and
transportation of all types of fireworks to licensed
retailers, or retailers operating under a permit, licensed
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public display operators, and other licensed wholesalers in
California.
The State Fire Marshal must establish and collect original
and annual renewal fees for fireworks licenses. The fees
cannot exceed the amount necessary to cover the SFM's
administrative and enforcement costs.
Last year, in her capacity as the Chair of the Joint
Legislative Committee on Emergency Management,
Assemblymember Bonnie Lowenthal organized stakeholder
working group meetings to discuss the full spectrum of
issues associated with fireworks sales, use, and disposal.
The working groups discussed topics that include
environmental concerns related to fireworks disposal,
funding options, data collection, and enforcement issues.
Through this comprehensive review, stakeholders reached
consensus on a number of proposed reforms.
Proposed Law
Senate Bill 777 amends state laws governing fireworks to:
Create a fireworks sell-back program administered
by the State Fire Marshal.
Authorize the state to issue licenses for retail
sales of fireworks during the week before New Year's
Day.
Allow local governments to impose permit fees on
fireworks retailers.
Require the State Fire Marshal to collect data
related to fireworks.
Exempt specified types of fireworks and related
facilities from hazardous waste fees.
Exempt people transporting fireworks pursuant to a
valid permit or license from specified sanctions.
Enact fireworks-related program evaluation and
performance measurement requirements.
Sell-back program . SB 777 requires the State Fire Marshal,
by January 1, 2015, to establish regional collection
centers to receive safe and sane fireworks and federally
approved consumer fireworks seized by local authorities.
The collection centers must be located throughout the state
in locations determined by the SFM.
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Notwithstanding any other law, SB 777 allows a local
authority or the State Fire Marshal to transfer seized safe
and sane fireworks and federally approved fireworks to a
regional collection center. The bill requires that
fireworks transferred to a regional collection center must
be deemed "hazardous material" until the State Fire
Marshall and a recognized third party testing entity makes
a determination regarding the fireworks' commercial
viability.
SB 777 allows the State Fire Marshal to permit a recognized
third party testing entity to determine, with the State
Fire Marshal, whether any seized fireworks are either
commercially viable or hazardous waste. Any firework deemed
commercially viable may be repackaged by the State Fire
Marshal or the Marshal's designee, including:
A state licensed fireworks importer or exporter,
A wholesaler purchasing the product pursuant to
state law,
The recognized third party testing authority, or
A licensed hazardous materials or hazardous waste
hauler.
Within 72 hours of any fireworks being deemed not
commercially viable, the State Fire Marshal, or the
Marshal's designee, must remove those fireworks from the
regional collection center, transport, and dispose of the
product in accordance with state and federal laws.
SB 777 requires the State Fire Marshal to authorize a state
licensed fireworks importer and exporter to purchase
fireworks deemed to be commercially viable.
SB 777 defines "recognized third party testing entity" as
an independent testing entity recognized by the Federal
Consumer Product Safety Commission as an acceptable testing
entity for consumer fireworks.
SB 777 requires fireworks stored at a regional collection
center to be subject to specified state laws and national
guidelines. The bill prohibits fireworks from being stored
at a collection center for more than 90 days.
The bill deems the regional collection centers to be exempt
facilities under specified provision of state law.
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SB 777 requires the State Fire Marshal to train local fire
and law enforcement personnel on the bill's requirements
and to provide guidance and training to local agencies that
seize, collect, transport, store, and treat seized
fireworks.
Retail licenses . SB 777 requires the State Fire Marshal,
after January 1, 2015, to issue separate one-time retail
licenses authorizing the retail sale of safe and sane
fireworks within California from 9 a.m. on December 26 to
midnight of January 1 of the following year. A retail
license issued for the December 26 through January 1 period
is valid for only one seven-day period and expires at the
end of the period for which it is valid. The bill requires
all fireworks sold pursuant to the license to have been
certified as safe and sane by the State Fire Marshal as of
June 15 of the year in which the license becomes valid.
The bill prohibits other licenses issued pursuant to
specified statutes from authorizing the sale of fireworks
during the December 26 through January 1 period.
SB 777 prohibits the State Fire Marshal from issuing a
retail license for the De-ember 26 through January 1
license period unless:
The charter city, city, county, fire district, or
city and county having jurisdiction over the fixed
location where the fireworks would be sold adopts an
ordinance or resolution allowing that sale, and
The application for that license is received by the
State Fire Marshal on or before December 15 of the
year in which the validity of the license is to
commence.
SB 777 allows the ordinance or resolution authorizing the
sale of fireworks to limit the period during which the
fireworks can be used to specified days and hours within
the period during which fireworks can be sold.
Local permit fees . SB 777 allows the governing body of a
charter city, city, county, fire district, or city and
county that adopts an ordinance or resolution authorizing
fireworks sales to adopt an ordinance or resolution
requiring each applicant receiving a permit to pay a fee to
the charter city, city, county, fire district, or city and
county. The amount of the fee is a pro rata portion of the
costs the local government incurs on or before January 1,
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2015 related to:
Processing and issuing permits.
Inspecting fireworks stands.
Public education and awareness campaigns regarding
the safe and responsible use of safe and sane
fireworks, and the dangers and risks posed by the use
of illegal fireworks.
Enforcing local code provisions related to the sale
and use of safe and sane fireworks, including extra
personnel time, and cleanup of the fireworks trash and
debris. The bill defines "extra personnel time" as
employee or contracted employee time that the local
government would not otherwise incur but for the sale
and use of safe and sane fireworks.
Fire operation and suppression efforts that are
directly related to safe and sane fireworks.
SB 777 requires that the pro rata share of the costs must
be determined using gross sales as shown on each
permittee's sales and use tax return for the applicable
period. The bill prohibits the pro rata share of costs
from exceeding 7% of the gross sales of the fireworks sold
in the charter city, city, county, fire district, or city
and county during the applicable period. A cost recovery
ordinance or resolution in effect on or before January 1,
2015, may supersede these requirements.
Data collection . SB 777 requires the State Fire Marshall,
on or before January 1, 2015, to collect and analyze data
relating to fires, damages, seizures, arrests,
administrative citations, and fireworks disposal issues
caused by the sale and use of both dangerous illegal
fireworks and safe and sane fireworks.
Hazardous waste fees . SB 777 exempts from specified
hazardous waste fees:
Hazardous waste that results from the seizure or
destruction of illegal fireworks by the State Fire
Marshal or other authorized government fire protection
agency.
A mobile fireworks treatment unit used by the State
Fire Marshal to destroy illegal fireworks.
A regional collection center for fireworks.
Transporting fireworks . SB 777 specifies that laws
requiring the Department of Motor Vehicles to suspend the
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commercial license of a person transporting dangerous
fireworks do not apply to a person with a specified, valid
license or permit issued pursuant to the State Fireworks
Law.
Program evaluation and performance measurement . To monitor
the budgets of the Department of Forestry and Fire
Protection (CALFIRE) and the Department of Toxic Substance
Control (DTSC), as those budgets relate to programs
regarding fireworks, SB 777 requires the Director of the
Department of Finance, in collaboration with the Directors
of CALFIRE and DTSC, to create a plan for modifying the
budget process to increase efficiency and focus on
accomplishing fireworks-related program goals. The plan
must include all of the following:
A strategy to incorporate program evaluation
methods into the budget process for selected
activities and programs. The methods must include
zero-based budgeting, performance measures, strategic
planning, audits, cost-benefit analyses, and program
reviews.
Ways to ensure transparency about program goals,
outcomes, and funding.
A process for collaborating with the Legislature,
particularly in establishing program goals and
measuring program outcomes.
A structure to work with local governments to
develop methods to measure and evaluate performance of
state-funded, locally administered programs.
An implementation timeline beginning with the
release of the 2014-2015 Governor's Budget.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . Fireworks sales are a vital
source of revenue for thousands of community-based,
non-profit organizations throughout California. Allowing
the licensed sale of safe and sane fireworks during the
week leading up to New Year's Day will provide struggling
non-profit organizations with a much-needed fundraising
SB 777 -- 4/23/13 -- Page 7
tool. Local governments' seizures of illegal fireworks
raise a number of policy questions regarding safe
transport, storage, handling, and disposal of the seized
materials. SB 777 enacts numerous changes to the state's
fireworks laws to both expand the sales of "safe and sane"
fireworks while addressing enforcement and safety concerns.
The bill maintains local control by allowing local
government officials to "opt-in" to the New Year's
fireworks sales, and allows local governments to impose
permit fees that will pay for local enforcement, education,
fire operation, suppression, and training activities. The
bill also creates new revenue streams from the resale
program and wholesale license fees to pay for reliable data
gathering, disposal, and enforcement. SB 777 will help
raise funds for non-profit organizations while improving
state and local efforts to enforce fireworks safety laws.
2. Timing is everything . SB 777 directs that seized safe
and sane and federally approved fireworks that are not
deemed to be commercially viable become "hazardous waste"
and must be transported and disposed of pursuant to
extensive state and federal laws governing hazardous waste.
However, the bill allows a local agency or the SFM to
transport those same fireworks to a collection center
without having to comply with any other provisions of law
and doesn't require them to be treated as hazardous waste
at the collection center until after they are deemed to be
not commercially viable. As a result, some fireworks that
are hazardous waste will not be treated like hazardous
waste during the time that they are being transported to,
and inspected at, the regional collection centers. The
bill's proponents say that state and federal regulators
will not allow seized fireworks to be immediately deemed to
be hazardous waste and then later redefined as commercially
viable products. SB 777 seeks to mitigate this timing
problem by requiring the SFM to provide local agencies that
seize and handle fireworks with training and education
regarding proper recognition, transportation, storage, and
safe handling of fireworks. The Committee may wish to
consider whether this training and education is a
sufficient response to concerns that the bill allows some
seized fireworks to be transported and handled without
regard for state and federal laws governing hazardous
waste.
3. Follow the money . SB 777 allows the SFM to sell seized
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fireworks that are inspected and determined to be
commercially viable, but the bill doesn't specify how the
SFM must allocate the revenues from those sales. The
amount of revenue retained by the SFM and the amount
allocated to the local agency that seized the fireworks may
vary depending upon the type of materials seized, the
volume of materials, and the distance that they were
transported to a collection center. To clarify how the SFM
should allocate the revenues from fireworks that are sold
from a regional collection center, the Committee may wish
to consider amending SB 777 to require that:
The SFM must allocate revenues from selling seized
fireworks pursuant to an agreement with the local
agency that seized the fireworks; and,
The local agency that seized the fireworks must
receive no less than 65% of the revenues from the sale
of the fireworks.
4. Nice, but not necessary ? SB 777 requires the Director
of Finance to plan for modifying the budget process to
include performance measures and program evaluation for
fireworks-related programs in CALFIRE and DTSC's budgets.
The proposed requirements are similar to
performance-measurement requirements that have been
included in other legislation, like SB 1258 (Wolk, 2012).
Governor Brown vetoed SB 1258, citing his executive order
relating to performance-based budgeting and suggesting that
his administration would prefer to collaborate with the
Legislature through the budget process to establish program
goals and measure outcomes. In recognition of the
Executive Order, the Committee may wish to consider
amending SB 777 to delete the statutory requirement that
DOF develop specific plans for performance measures and
program evaluation. Instead, legislators should work with
the Budget Committee to establish metrics and reporting
requirements through the budget process.
5. Data collection . SB 777 requires the State Fire
Marshal to collect and analyze data relating to fires,
damages, seizures, arrests, administrative citations, and
fireworks disposal issues. The bill's language could be
interpreted as allowing the SFM to collect data only before
2015. The bill also doesn't specify the methodology that
the Fire Marshal should use in collecting the data or
require input on the data collection process from any
relevant stakeholders. The Committee may wish to consider
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amending SB 777 to clarify the bill's data collection
requirement.
6. Let's be clear . SB 777 appears to require that permit
fees imposed by local agencies can only be used to recover
costs the local agencies incur before 2015. To clarify
that the bill authorizes a local agency to impose a permit
fee to recover specified costs on an ongoing basis, the
Committee may wish to consider amending SB 777 to delete
the phrase "on or before January 1, 2015" on line 27 of
page 8 of the bill.
7. Mandate . By creating a new crime, SB 777 also creates
a new state-mandated program. The California Constitution
says that the state does not have to reimburse local
governments for the costs of new crimes (Article XIIIB,
6[a][2]). But the bill disclaims the state's
responsibility for reimbursing local governments' costs by
declaring that any costs that may be incurred by a local
agency are the result of a program for which legislative
authority was requested by that local agency. The
Committee may wish to consider amending SB 777 to replace
this declaration with the standardized mandate
reimbursement disclaimer that Legislative Counsel uses for
bills that create new crimes.
8. Similar legislation . SB 777 is not the first
legislative proposal to authorize licensed fireworks sales
during the week before New Year's Day.
SB 1468 (Calderon, 2012) which would have allowed
New Year's fireworks sales each year from 2013 through
2017, died in the Assembly.
AB 1295 (Bermudez, 2005), which would have allowed
New Year's fireworks sales and used fee revenues to
pay for disposal costs associated with seized
fireworks, died in the Assembly Appropriations
Committee.
AB 1371 (V. Manuel Perez, 2011), which would have
allowed New Year's fireworks sales and authorized
local governments to impose permit fees, died in the
Assembly Governmental Organization Committee.
9. Triple referral . Because SB 777's provisions fall
within the policy jurisdictions of multiple Senate
committees, Senate Rules Committee ordered a
triple-referral. The Senate Governmental Organization
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Committee passed the bill at its April 23 hearing by a 10-0
vote. If the Senate Governance and Finance Committee
passes SB 777, the bill will be referred back to the Rules
Committee.
Support and Opposition (4/25/13)
Support : American Promotional Events, Inc.; California
Association of Non Profits; Vernon Police Officer's Benefit
Association; Friends of Families; Buena Park First Church
of the Nazarene; The Clovis High Instrumental Music
Program; St. Mary Queen of Apostles Council #12555; Soledad
Apostolic Church; Beta Omega Phi; The Tri Counties Blue
Star Moms.
Opposition : Unknown.