BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
274 (Portantino)
Hearing Date: 08/27/2009 Amended: 07/09/2009
Consultant: Brendan McCarthy Policy Vote: EQ 5-2
AB 274 (Portantino)
Page 2
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BILL SUMMARY: This bill creates a fee funded program for the
future cleanup of closed solid waste facilities. The fee would
go into effect provided that more than 50 percent of the
operators of solid waste facilities opt to participate in the
program. Participating operators would pay a fee into a trust
fund for remedial actions at closed waste facilities, provided
that the facility's operator is unable to pay for the
remediation.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Fee revenues to trust fund ($1,000)
($2,100)Special *
Development of regulations $160 $150 Special
**
Program implementation $270 $520 Special
**
* New special fund.
** Integrated Waste Management Account or the new special fund.
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STAFF COMMENTS: Suspense file. As proposed to be amended.
Under current law, operators of solid waste facilities are
required to pay a per ton "tipping fee" in an amount established
by the Integrated Waste Management Board (Waste Board) to pay
for the state's cost to regulate those facilities. Owners and
operators of solid waste facilities are also required to plan
and provide funds for the closure and management of a facility
after closure, to ensure that there is no unanticipated impact
on the environment from the contents of the facility. The
funding that is arranged by facility owners for the post-closure
period is known as a financial assurance.
This bill prohibits the owner of a solid waste facility that is
subject to a post closure plan from selling the facility unless
AB 274 (Portantino)
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the prospective purchaser can demonstrate sufficient financial
assurances.
The bill creates the State Solid Waste Postclosure Trust Fund
which will be funded by a voluntary fee on solid waste facility
operators of $0.12 per ton of solid waste. The fee will only go
into effect if more than 50 percent of facility operators (by
volume) agree to participate in the program by July 1, 2010. If
the fee does go into effect, those facility operators that elect
to pay the fee cannot withdraw from the program. In addition, if
an operator elects to join the program after the fee goes into
effect, the operator will be required to pay back all previous
fees plus a penalty.
Revenues generated by the fee will be deposited in the Trust
Fund and will be available to pay for the costs of corrective
actions or other postclosure activities that are not paid for by
the facility's owner. Funds from the Trust Fund can only be used
at facilities owned by a program participant. The Waste Board
can only use these funds if it determines that the owner has not
performed actions required by the Waste Board, that any existing
financial assurances are insufficient to pay for the required
actions, that the facility had a valid permit as of January
1988, and that all financial assurances have been exhausted.
The bill requires the Waste Board to attempt to recover any
Trust Fund money from the facility owner. To the extent funds
are recovered, those proceeds will be deposited back in the
Trust Fund. The bill authorizes the Waste Board to impose a lien
on an operator's property to assist in the recovery of funds.
Beginning in January 2014, the bill requires the Waste Board to
report biannually to the Legislature on the status of the
program.
Assuming that at least 50 percent of solid waste facility
operators opt to participate in the program, the fee will
generate about $2.1 million per year. If participation rates are
higher, then fee revenues will be commensurately higher. The
Waste Board will incur costs to develop regulations and begin
program implementation. Because some of these costs will occur
before fees are collected under the bill, they will be paid from
the Integrated Waste Management Account. Staff estimates that
the Waste Board will require about five positions and some
additional contracting funds for ongoing oversight of the
AB 274 (Portantino)
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program. At some point, the Waste Board will presumably begin
using money in the Trust Fund for remediation activities. It is
impossible to predict when those expenditures will occur.
However, the bill stipulates that the Waste Board can only fund
cleanup activities to the extent funds are available and the
bill is clear that it does not create any additional financial
obligation on the state's part.
Staff notes that the language of the bill is ambiguous as to
whether the Waste Board can fund its administrative costs from
the Trust Fund. If the bill is interpreted to preclude the use
of Trust Fund money for administrative expenses, the bill would
create cost pressures on the Integrated Waste Management
Account.
The author's proposed amendments eliminate the requirement that
a prospective purchaser of a postclosure landfill demonstrate
that he or she can meet financial assurance requirements. The
amendments modify the allowable uses of the Trust Fund to allow
expenditures for cleanup actions at any postclosure landfill,
not just a landfill whose owner is a participant in the Trust
Fund program. The amendments change the start date for
collection of the fee to January 1, 2012. The amendments require
the Waste Board to include information about the program in an
existing report, rather than creating a new reporting
requirement. The amendments also substantially reorganize the
bill and clarify the procedures for collection of the fee by the
Board of Equalization.