BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chairman
907 (Chesbro)
Hearing Date: 08/17/2009 Amended: 08/17/2009
Consultant: Brendan McCarthy Policy Vote: EQ 5-2
_________________________________________________________________
____
BILL SUMMARY: AB 907 makes a variety of changes to the
statutes regulating used lubricating oil. The bill reduces the
number of used oil collectors that can apply for recycling
incentives. The bill creates a new incentive for re-refined oil.
The bill allows additional funding for local government oil
recycling efforts, providing sufficient revenues are available.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Waste Board Enforcement $100
$100Special *
Additional grants to local $1,400 $2,100
$2,100Special *
governments
Reduced incentive payments ($1,400) ($2,800)
($2,800)Special *
for used oil collection
New incentive payments $600 $600 Special
*
for re-refined oil
* California Used Oil Recycling Fund.
_________________________________________________________________
____
STAFF COMMENTS:
Under current law, manufacturers of lubricating oil pay a fee of
$0.16 per gallon sold in the state. Revenues derived from this
fee are used for regulating used lubricating oil disposal,
providing incentive payments for used lubricating oil
collection, and providing grants to local governments to
encourage recycling of used lubricating oil.
AB 907 makes a variety of changes to the statutes governing used
lubricating oil.
The bill eliminates payment of incentives for used oil that is
generated by certified used oil collection centers rather than
collected from the public. (In other words, for auto mechanics
or oil change service providers, incentives would not be paid
for the used oil they generate themselves, only for used oil
they collect from the public.) This provision of the bill would
generate savings of about $2.8 million per year.
The bill establishes certification requirements for oil
re-refining facilities. The bill requires the California
Integrated Waste Management Board to pay an incentive payment of
$0.02 per gallon for re-refined oil and allows the Board to
increase the incentive
AB 907 (Chesbro)
Page 2
payment provided that increased expenditures do not adversely
affect the fund balance. Based on current levels of re-refining
of used oil, the Waste Board estimates that this provision will
result in costs of $600,000 per year.
The bill slightly revises the existing statutory funding formula
for grants to local governments. The bill authorizes funding to
local jurisdictions of $10 million, provided that there is a
sufficient fund balance. (Current law limits expenditures for
this purpose to $10 million per year; currently payments to
local governments are limited to $6 million per year due to a
low fund balance.)
Based on the mix of reduced expenditures for used oil recycling
and increased expenditures for re-refined oil incentives and
additional regulatory oversight, there should be about $2.1
million available for additional funding to local governments,
based on current revenues estimates.
This bill is similar to SB 546 (Lowenthal) which is in the
Assembly Appropriations Committee.