BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 907|
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THIRD READING
Bill No: AB 907
Author: Chesbro (D)
Amended: 8/17/09 in Senate
Vote: 21
SENATE ENV. QUALITY COMMITTEE : 5-2, 7/6/09
AYES: Simitian, Corbett, Hancock, Lowenthal, Pavley
NOES: Runner, Ashburn
SENATE APPROPRIATIONS COMMITTEE : 8-4, 8/17/09
AYES: Kehoe, Corbett, Hancock, Leno, Oropeza, Price, Wolk,
Yee
NOES: Cox, Runner, Walters, Wyland
NO VOTE RECORDED: Denham
ASSEMBLY FLOOR : 43-31, 6/1/09 - See last page for vote
SUBJECT : California Oil Recycling Enhancement Act:
rerefined oil
SOURCE : Californians Against Waste
DIGEST : This bill makes a variety of changes to the
statutes regulating used lubricating oil. This bill
reduces the number of used oil collectors that can apply
for recycling incentives. This bill creates a new
incentive for re-refined oil. This bill allows additional
funding for local government oil recycling efforts,
providing sufficient revenues are available.
CONTINUED
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ANALYSIS : Existing law:
1.Pursuant to Health and Safety Code commencing with
Section 25250, et seq., establishes management standards
for used oil including:
A. Defines "used oil" as oil that meets specified
characteristics including flashpoint and contaminant
levels including not more than 5 ppm polychlorinated
biphenyls (PCBs).
B. Defines 'recycled oil" as oil that meets
specified characteristics including flashpoint and
contaminant levels including not more than 2 ppm
PCBs.
C. Defines "used oil recycling facility", "used
oil storage facility" and "used oil transfer
facility.
D. Establishes transportation, testing and storage
requirements.
2.Pursuant to the California Oil Recycling Enhancement Act
(Act) commencing with Section 48600 of the Public
Resources Code:
A. Prescribes a program to increase the amount of
used oil recycled in California.
B. Establishes the Integrated Waste Management
Board (IWMB) as the implementing agency for the Act.
C. Establishes a fee of 16 cents per gallon on new
lubricating oil sold in California that is paid by
manufacturers to fund the program activities under
the Act.
D. Provides a recycling incentive payment of 16
cents a gallon to every industrial generator,
curbside collection program, and certified used oil
collection centers for the used oil they collect, as
specified.
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E. Provides grants to local governments and other
entities to further the Act.
This bill 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 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.
(Existing 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.)
Background
According to the Senate Environmental Quality Committee
analysis, the IWMB's Used Oil Recycling Program has a
structure similar to the "bottle bill" program at the
Department of Conservation which establishes a deposit on
beverage containers with the unredeemed deposits used to
fund collection, recycling and market development efforts.
The IWMB's Used Oil Recycling Program (program) develops
and promotes alternatives to the illegal disposal of used
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oil by establishing a statewide network of collection
opportunities and undertaking outreach efforts to inform
and motivate the public to recycle used oil. Program
responsibilities include:
1.Providing the public with convenient collection locations
for used oil.
2.Increasing the demand for rerefined oil.
3.Developing methods to motivate the public to recycle
their used oil.
4.Providing grants to local governments, nonprofit
organizations, and for research and demonstration
projects.
The Act, which is administered by the IWMB, was passed in
1991, and is designed to discourage the illegal disposal of
used oil. This law requires oil manufacturers to pay to
the IWMB $0.16 for each gallon of lubricating oil sold in
California. Registered industrial generators, curbside
collection programs, and certified collection centers are
eligible to receive $0.16 for each gallon of used
lubricating oil recycled.
The fee provides between $15 and $19 million per year to
fund program activities. $3 million is allowed for
administration, approximately 20% is used to pay the
recycling incentives; and the remainder is used for grants
to local governments and non-profit groups. The fee and
incentive has not been revisited since the inception of the
Act.
In 2007 lubricating oil sales totaled 150.0 million
gallons, and 88.3 million gallons were recycled for a
recycling rate of 58.8 percent.
Rerefined Oil . Rerefining is environmentally beneficial
method of managing used oil. Rerefined is a lubricant base
stock or oil base that has been derived from used oil and
was processed using a series of mechanical or chemical
methods, or both, including but not limited to, vacuum
distillation, followed by solvent refining or
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hydrotreating; capable of meeting the Physical and
Compositional Properties, as defined under the American
Society for Testing and Materials (ASTM) D6074-99; and
processed into a material that has a quality level suitable
for use in a finished lubricant.
Other Uses of Used Oil . Used oil can also be treated and
used as a fuel in marine diesel engines. Asphalt flux used
in roofing materials is another marketable product.
Outside of California it is often burned for energy. Large
industrial boilers burn the used oil for energy and on a
smaller scale small quantities of used oil are burned in
specially designed heaters to provide space heating for
small businesses.
Transport and Testing of Used Oil . Used oil in California
must be handled as a hazardous waste. The management of
used oil is governed by the Health and Safety Code Section
25250 et seq. that establishes tracking and testing
procedures. Testing requirements are imposed at recycling,
storage and recycling facilities, however used oil that is
picked up from generators and shipped directly out of
California is not tested. If the oil tests outside the
standards for used oil, it must be managed differently to
protect against the hazardous constituents such as heavy
metals or PCBs.
Out-of-State Recycling Facilities . Currently, used oil
that is part of the Act through the incentive payments must
only go to approved facilities in California that meet
rigorous standards. Used oil that is shipped out-of-state
should be managed at facilities that meet federal
requirements. This bill, for used oil that is part of the
Act, requires out-of-state recycling facilities
participating in California's incentive program to certify
that they are operating in compliance with federal law and
meet environmental compliance standards.
According to the author's office, this bill authorizes the
IWMB to develop a program to provide incentives to
manufacturers of re-refined oil, and to develop additional
capacity for the re-refining of used oil within the State
of California. It provides for an update of the Act which
has not been substantially changes since its inception in
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1992.
Related Legislation
SB 546 (Lowenthal), 2009-10 Session, contains content
similar to this bill.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
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.
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.
SUPPORT : (Verified 8/19/09)
Californians Against Waste (source)
Safety-Kleen Systems, Inc.
Sierra Club California
OPPOSITION : (Verified 8/19/09)
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DeMenno/Kerdoon
Evergreen Oil, Inc.
Independent Waste Oil Collectors and Transporters
Western States Petroleum Association
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Beall, Blumenfield, Brownley,
Buchanan, Caballero, Carter, Chesbro, Coto, Davis, De La
Torre, De Leon, Eng, Evans, Feuer, Fong, Fuentes,
Furutani, Hayashi, Hill, Huffman, Jones, Krekorian, Lieu,
Bonnie Lowenthal, Ma, Mendoza, Monning, Nava, John A.
Perez, Portantino, Price, Ruskin, Salas, Saldana,
Skinner, Swanson, Torlakson, Torres, Torrico, Yamada,
Bass
NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill,
Blakeslee, Conway, Cook, DeVore, Duvall, Emmerson,
Fletcher, Fuller, Gaines, Galgiani, Garrick, Gilmore,
Hagman, Harkey, Huber, Jeffries, Knight, Logue, Miller,
Nestande, Niello, Nielsen, Silva, Smyth, Audra
Strickland, Tran, Villines
NO VOTE RECORDED: Block, Charles Calderon, Hall,
Hernandez, V. Manuel Perez, Solorio
TSM:nl 8/19/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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