BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
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|Bill No: |SB 677 |Hearing |4/22/15 |
| | |Date: | |
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|Author: |Mendoza |Tax Levy: |No |
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|Version: |4/6/15 |Fiscal: |Yes |
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|Consultant|Weinberger |
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FIREWORKS SALES AND DISPOSAL
Makes numerous amendments to the state laws governing fireworks
sales and disposals.
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. 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
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authorized the SFM to issue a one-time retail license to permit
the sale of certified fireworks from 9:00am 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 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.
In recent years, stakeholders have participated in 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 677 amends state laws governing fireworks to:
Create a fireworks sell-back program administered by the
SFM.
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 people transporting fireworks pursuant to a valid
permit or license from specified sanctions.
Require the SFM to regulate tracking of shipping
containers that transport dangerous fireworks.
Enact fireworks-related program evaluation and
performance measurement requirements.
Sell-back program . Notwithstanding specified statutes, SB 677
allows a local authority or the State Fire Marshal (SFM) to
repurpose or dispose of seized safe and sane fireworks. The
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bill allows a local authority or the SFM transfer any safe and
sane and federally approved fireworks to an entity possessing a
valid importer's and exporter's license or a wholesaler's
license. Any fireworks transferred pursuant to this authority
must:
Remain under the ownership of the seizing local
authority.
Be deemed "hazardous material" until the SFM, the
Department of Toxic Substance Control, and a recognized
third party testing entity make a determination regarding
the fireworks' commercial viability.
SB 677 allows the SFM to permit a recognized third party testing
entity to determine, with the SFM and the DTSC; whether any
seized fireworks are either commercially viable or hazardous
waste. Any firework deemed commercially viable may be repackaged
by the SFM, the authority seizing any fireworks, or the
authority'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 SFM, or the SFM's designee, must dispose of the
product in accordance with state and federal laws.
SB 677 requires the SFM to authorize a state licensed fireworks
importer and exporter to purchase fireworks deemed to be
commercially viable from the SFM or the local authority seizing
the fireworks. Revenue received from the sale belongs to the
seizing local authority. The bill allows the SFM to enter into
an agreement with a local authority for purposes of sharing
revenue from the sale of fireworks. The agreement must allocate
no less than 65% of the revenues to that local authority with
the balance going to the state.
SB 677 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.
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SB 677 requires that a state-licensed fireworks importer and
exporter or wholesaler, upon the purchase of fireworks pursuant
to the bill's provisions, must accept full liability for any
damage done by the fireworks and indemnify the State of
California and the seizing local authority.
SB 677 requires the SFM and the DTSC 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.
SB 677 requires the DTSC to develop and publish guidelines for
the implementation of this chapter that include:
Standards for the proper handling, transport, and
storage of fireworks that are hazardous materials.
Standards for the proper handling, transport, and
disposal of fireworks that are hazardous waste.
A definition of "commercially viable" that ensures that
fireworks that should be disposed of as waste are not
resold.
Retail licenses . SB 677 requires the SFM, after January 1,
2017, 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 then
expires. The bill requires all fireworks sold pursuant to the
license to have been certified as safe and sane by the SFM 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 677 prohibits the State Fire Marshal from issuing a retail
license for the December 26 through January 1 license period
unless:
The charter city, city, county, fire protection
district, or city and county having juris-diction 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.
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SB 677 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 677 allows the governing body of a
charter city, city, county, fire protection 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, 2017 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 677 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 677 requires the SFM, on or before January
1, 2017, 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. The SFM must
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collect data pursuant to a methodology developed in consultation
with the State Fire Marshal's General Fireworks Advisory
Committee.
Tracking dangerous fireworks containers . SB 677 requires the
SFM, on or before January, 1 2018, to identify and evaluate
methods to track all containers containing dangerous fireworks
coming into California ports that will be transported in the
state or trans-shipped out of those ports via container on a
motor vehicle for shipment to a destination outside of
California so as to ensure that the dangerous fireworks reach
their final destination and are not drop shipped or otherwise
offloaded at a location within the State of California. These
tracking methods shall include a cost analysis related to
capturing and reporting the tracking data concerning these
containers. In developing these tracking methods the SFM must
consult with relevant federal, state, and local public agencies,
the fireworks industry, and other relevant stakeholders,
including port authorities for harbors and points of
trans-Pacific importation of any dangerous fireworks.
SB 677 requires the SFM, on or before January 1, 2019, to adopt
regulations relating to the tracking of the dangerous fireworks
containers, which may include provisions relating to tracking
devices installed on each container, voluntarily funded by the
industry, as may be necessary for the protection of life and
property within the state. The regulations must provide for an
annual charge imposed on all holders of an importer's and
exporter's license who import dangerous fireworks into the
state. The annual charge must be determined based on the volume
of product and number of containers imported into the state by
the licensees, and payment of this charge shall be a condition
of licensure pursuant to state law.
SB 677 requires import and export licensees, on and after
January 1, 2019, to verify their compliance with statutory
requirements and regulations relating to the tracking of
dangerous fireworks containers.
Transporting fireworks . SB 677 specifies that laws requiring
the Department of Motor Vehicles to suspend the 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.
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Program evaluation and performance measurement ; To monitor the
budgets of the Department of Forestry and Fire Protection
(CALFIRE) and the DTSC, as those budgets relate to programs
regarding fireworks, SB 677 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:
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 pro-grams.
An implementation timeline beginning with the release of
the 2016-2017 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 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 677 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
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officials to "opt-in" to the New Year's fire-works 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 677 will
help raise funds for non-profit organizations while improving
state and local efforts to enforce fireworks safety laws.
2. Fees vs. taxes . In November 2010, voters approved
Proposition 26, which amended the California Constitution to
expand the definitions of local taxes and tax increases that
require voter approval. Prop. 26 defined any levy, charge, or
exaction of any kind imposed by a local government as a tax,
requiring voter approval, unless that levy, charge, or exaction
is covered by one of seven exceptions specified by Prop. 26. SB
677 allows local government to use license fee revenues for a
variety of specified purposes. Some of those purposes, like the
paying for the costs of issuing permits and conducting
inspections, likely fall within the exceptions defined by Prop.
26. It is unclear whether other purposes, like paying for
education programs or the cleanup of fireworks debris, are
allowed under Prop. 26's exceptions. If the fee revenues are
used for purposes that Prop. 26 does not allow, then the
so-called fees are actually taxes that would require 2/3 voter
approval. To avoid any misinterpretation, the Committee may
wish to amend SB 677 to clarify that local permit fee revenues
must only be used for purposes allowed pursuant to subdivision
(e) of Section 1 of Article XIIIC of the California
Constitution.
3. Timing is everything . SB 677 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
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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 677 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.
4. Mandate . By creating a new crime, SB 677 also creates a new
state-mandated program. But the bill disclaims the state's
responsibility for reimbursing local governments for enforcing
these new crimes. That's consistent with the California
Constitution, which says that the state does not have to
reimburse local governments for the costs of new crimes (Article
XIIIB, 6[a] [2]).
5. Similar legislation . SB 677 is not the first legislative
proposal to authorize licensed fireworks sales during the week
before New Year's Day.
SB 777 (Calderon, 2013), which would have created a
fireworks sell-back program administered by the State Fire
Marshal and authorized the state to issue licenses for
retail sales of fireworks 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.
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6. Double-referral . Because SB 677's provisions fall within
the policy jurisdictions of more than one Senate committee,
Senate Rules Committee ordered a double-referral, first to the
Senate Governance & Finance Committee and then to the Senate
Governmental Organization Committee.
Support and
Opposition (4/17/15)
Support : American Promotional Events, Inc.
Opposition : California Fire Chiefs Association; California
Taxpayers Association, Public Policy Advocate
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