BILL ANALYSIS Ó
AB 273
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ASSEMBLY THIRD READING
AB
273 (Committee on Environmental Safety and Toxic Materials)
As Introduced February 11, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
|----------------+------+----------------------+---------------------|
|Environmental |5-0 |Alejo, Dahle, | |
|Safety | |Gonzalez, McCarty, | |
| | |Ting | |
|----------------+------+----------------------+---------------------|
|Appropriations |11-0 |Gomez, Bonta, | |
| | |Calderon, Daly, | |
| | |Eggman, Eduardo | |
| | |Garcia, Holden, | |
| | |Quirk, Rendon, Weber, | |
| | |Wood | |
| | | | |
| | | | |
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SUMMARY: Increases the interest rate accrued on monetary
obligations owed to the California Department of Toxic Substances
Control (DTSC). Specifically, this bill:
1)Requires a person to pay for oversight of any corrective action
with respect to hazardous waste;
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2)Authorizes the State Attorney General to recover costs incurred
with regard to carrying out or overseeing a removal action, a
remedial action, or a corrective action;
3)Deletes the interest rate on monetary obligations owed to DTSC
as being the same rate earned on investments in the Surplus
Money Investment Fund, and establishes the interest rate as 10%
per annum, and 7% per annum for local governments;
4)Requires DTSC to waive the interest if the obligation is paid
within 60 days of receipt of the invoice;
5)Requires DTSC to waive the interest from accruing for up to 180
days if the liable person in receipt of the invoice notifies
DSTC of dispute over all or a portion of the invoice.
FISCAL
EFFECT: According to the Assembly Appropriations Committee,
assuming the 10% interest is applied and received from all
outstanding invoices as well as increased cost recovery, the
potential increased revenues to the Toxic Substance Control
Account could be up to $3 million. DTSC would have minor and
absorbable costs for updating billing documents and procedures.
COMMENTS:1)
State Audit Report: On August 7, 2014, the Bureau of State Audits
(BSA) released a report on DTSC's cost recovery. The BSA found
that long-standing shortcomings with DTSC's recovery of costs have
resulted in millions of dollars in unbilled and billed but
uncollected cleanup costs dating back to 1987.
According to the report, "increasing the interest rate charged on
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billed but delinquent unpaid amounts may improve the timeliness of
collections from responsible parties. State law requires the
department to charge interest for invoices not paid within 60 days
at a rate equal to the rate of return earned on investments in the
State's Surplus Money Investment Fund (SMIF). However, the SMIF
interest rate is substantially lower than the interest rate
charged for late payments by other state entities, such as the
California State Board of Equalization (BOE). For example, for
the quarter ending June 30, 2013, the SMIF interest rate was
0.246%, while the BOE interest rate was 6% for the same period.
As long as the SMIF interest rate remains low, there is less
incentive for responsible parties to make payments on time."
The BSA recommended that in order to improve DTSC's efforts to
promptly recover its costs, the legislature should revise state
law to allow DTSC to use a higher interest rate assessed on late
payments.
Analysis Prepared by:
Paige Brokaw / E.S. & T.M. / (916) 319-3965 FN:
0000157