BILL ANALYSIS
AB 907
Page 1
ASSEMBLY THIRD READING
AB 907 (Chesbro)
As Amended May 11, 2009
Majority vote
NATURAL RESOURCES 6-3 APPROPRIATIONS 9-4
-----------------------------------------------------------------
|Ayes:|Skinner, Brownley, |Ayes:|De Leon, Ammiano, Davis, |
| |Chesbro, | |Fuentes, Hall, John A. |
| |De Leon, Hill, Huffman | |Perez, Price, Skinner, |
| | | |Torlakson |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Gilmore, Knight, Logue |Nays:|Nielsen, Duvall, Harkey, |
| | | |Audra Strickland |
| | | | |
-----------------------------------------------------------------
SUMMARY : Increases the recycling fee on lubricating oil sold in
the state, increases the collection and recycling incentive
payments awarded by the California Integrated Waste Management
Board (CIWMB), and makes related changes to the California Used
Oil Recycling and Enhancement Act (Act). Specifically, this
bill , updates, clarifies, and makes numerous changes to the Act,
including:
1)Defines "rerefined oil."
2)Authorizes CIWMB to enter into public and private partnerships
with local governments, nonprofit organizations, and private
entities to encourage the collection and recycling of used
oil.
3)Increases the recycling fee collected on lubricating oil from
4 cents per quart to 6 cents and authorizes CIWMB to adjust
the fee annually to reflect changes in the California Consumer
Price Index.
4)Increases the recycling incentive awarded by CIWMB to
industrial generators, curbside collection programs, and
certified used oil collection centers for used oil collected
from a minimum of 4 cents per quart to a minimum of 10 cents
per quart. Authorizes CIWMB to award this incentive to
registered or certified out-of-state facilities, as specified.
AB 907
Page 2
5)Authorizes CIWMB to award a rerefining incentive to registered
or certified in-state and out-of-state facilities of not less
than 2 cents per quart to promote rerefining used oil.
6)Increases the total amount of payments issued by CIWMB to
local governments for used oil collection programs from $10
million to $13 million annually.
7)Lengthens the certification term for used oil collection
centers from two years to four years.
EXISTING LAW , pursuant to the Act, which is administered by
CIWMB, establishes a used oil recycling program designed to
discourage the illegal disposal of used oil. The Act requires
oil manufacturers to pay a $0.16 fee to CIWMB for each gallon of
lubricating oil sold in California. Registered industrial
generators, curbside collection programs, and certified
collection centers are eligible to receive a $0.16 incentive
payment for each gallon of used lubricating oil recycled.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill has minor and absorbable one-time costs to
CIWMB to expand and revise the existing used-oil program. This
bill may increase annual revenues, potentially in the millions
of dollars, from increased used-oil and rerefined oil fees;
increase annual incentive payments to used oil refineries,
likely ranging from $500,000 to $1 million; and, increase annual
payments to local governments, by as much as $3 million, for
used oil collection programs. (California Used Oil Recycling
Fund)
COMMENTS : According to CIWMB, used oil can contain toxic
substances, including benzene, lead, zinc, and cadmium. The oil
from a single oil change can ruin the taste of a million gallons
of drinking water, the supply of 50 people for one year.
Improperly disposed oil, such as dumped in the storm drain,
harms surface water by preventing the replenishment of dissolved
oxygen, and impairs photosynthetic processes. Improper
disposal onto land pollutes soil and groundwater supplies.
In 2008 CIWMB released the report, Improving Used Oil Recycling
in California, which was prepared by the Lawrence Livermore
AB 907
Page 3
National Laboratory. According to the report, in 2006
approximately 115.8 million gallons, or 71% of all used oil
generated in the state, was collected. 45.7 million gallons
(approximately 4 times the amount spilled by the Exxon Valdez)
is unaccounted for. Of the oil collected in California, only
10% is currently rerefined, even though rerefineries in the
state are operating at maximum capacity. The remainder is used
for energy generation out-of-state or is processed into marine
diesel oil (MDO).
According to the American Petroleum Institute, "rerefined oil is
as high quality as virgin product. In fact, rerefining used oil
uses from 50% to 80% less energy than refining crude oil."
According to the author, this bill would authorize [CIWMB] to
develop a program to provide incentives to manufacturers of
rerefined oil and to develop additional capacity for the
rerefining of used oil within the state." Because California's
strict air emissions standards do not allow the burning of used
oil for energy generation, 85% of used oil collected is
transferred to out-of-state energy facilities where the oil is
burned, untreated, and contributes to greenhouse gas emissions.
Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916)
319-2092
FN: 0000904