BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 777 (Calderon) - Public safety: fireworks.
Amended: May 15, 2013 Policy Vote: GO 10-0, Gov&Fin
6-0
Urgency: No Mandate: Yes
Hearing Date: May 23, 2013 Consultant: Marie Liu
SUSPENSE FILE.
Bill Summary: SB 777 makes various changes to the law regarding
the sale of fireworks, including the treatment of seized
fireworks for resale and destruction.
Fiscal Impact:
Unknown costs, likely in the hundreds of thousands of
dollars (General Fund) to the State Fire Marshal for data
collection and analysis.
One-time costs of approximately $550,000 Hazardous Waste
Control Account (special fund/General Fund) to DTSC for
regulations and lost fee revenue.
Ongoing costs of approximately $480,000 Hazardous Waste
Control Account to DTSC ongoing training and ongoing lost
fee revenue.
Unknown revenues from the sale of seized revenues, of which
at least 65% must be given to the locals.
Background: 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. Seized fireworks are
considered hazardous waste.
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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.
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 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
Proposed Law: This bill would create a fireworks sell-back
program by January 1, 2015. Specifically, this bill would:
Require the SFM to establish regional collection centers
for the purposes of receiving safe and sane fireworks and
federally approved consumer fireworks seized by local
authorities.
Allow the transfer of seized fireworks to regional
collection centers while being declared a hazardous material
instead of a hazardous waste.
Requires a third party testing entity permitted by the SFM
to make a determination along with the SFM and the
Department of Toxic Substances Control (DTSC) as to whether
any seized fireworks are commercially viable or hazardous
waste.
Require DTSC to remove any fireworks deemed hazardous waste
for treatment under state and federal hazardous waste laws.
Allow commercially viable seized fireworks to be repackaged
and sold to a state licensed fireworks importer and exporter
or wholesaler.
Allow SFM to enter into an agreement with local authorities
to allocate at least 65% of the revenues generated from the
sale of seized fireworks to that local authority.
Require the SFM and DTSC to train local fire and law
enforcement personnel regarding the buy-back program. The
SFM would also be required to develop and publish necessary
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training and guidance to local agencies that seize,
transport, and treat seized fireworks.
Require DTSC to develop and publish guidelines for the
proper handling of fireworks that are hazardous materials
and hazardous waste and to define "commercially viable" for
the purpose of this program.
This bill would also require the SFM to issue one-time licenses
for the retail sale of safe and sane fireworks from December
26th to January 1 annually.
This bill would require a seller of fireworks to pay a fee to a
local government a pro rata portion of actual and reasonable
costs to the locals for activities related to the sale and use
of fireworks.
This bill would exempt seized fireworks declared as hazardous
from DTSC's hazardous waste facilities fees.
This bill would also require the SFM to collect and analyze data
relating to fire, damages, seizures, arrests, and firework
disposal issues caused by fireworks by January 1, 2015.
Related Legislation:
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.
Staff Comments: Staff notes that the Governor's May revise
included a budget change proposal for $500,000 of General Fund
monies to help pay for disposal of seized fireworks by the SFM.
Additionally, the Governor proposed trailer bill that would
allow local agencies to sell seized fireworks without going
through the state.
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DTSC estimates that establishing five regional collection
centers, training, and inspection costs would cost approximately
$200,000 ongoing. Training for local fire and law enforcement
would be another $130,000. There would also be one-time costs to
develop regulations for safe handing, transport, and storage of
seized fireworks would cost approximately $100,000.
Additionally, since the regional collection facilities would be
exempt from any hazardous waste facility fees, approximately
$450,000 would be lost in fee revenue the first fiscal year,
plus $150,000 annually.
DTSC costs would be paid for through the Hazardous Waste Control
Account. However, staff notes that there are no excess revenues
in this fund currently so DTSC would either need to raise its
fees or receive a General Fund appropriation to fund the
activities associated with this bill.
Currently there is no regular funding mechanism to deal with
disposal of seized fireworks. This bill attempts to address this
issue by generating additional revenue (and potentially more
seized product) by allowing the sale of fireworks for New Year's
Day. This bill would also generate revenues to the locals and
the state by allowing the sale of seized fireworks back to the
wholesalers. Presumably wholesalers would only participate in
this buyback if the costs of the seized and repackaged fireworks
are cheaper than new fireworks. However, the seized fireworks
must be sold at a high enough prices to cover the state and
local costs with seizing, transporting, testing, and reselling
the fireworks, especially since the bill exempts seized
fireworks from DTSC's hazardous waste fee, which is designed to
cover DTSC's regulatory activities. The bill is silent on who
would set the price of the resale seized fireworks. Staff
believes that it is unclear whether the firework sales would
generate enough revenues to offset the costs of the sell-back
program.
This bill does not create a reimbursable mandate.
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