BILL ANALYSIS
SB 231
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2009-2010 Regular Session
BILL NO: SB 231
AUTHOR: Lowenthal
AMENDED: April 20, 2009
FISCAL: Yes HEARING DATE: April 27, 2009
URGENCY: No CONSULTANT: Bruce Jennings
SUBJECT : HAZARDOUS WASTE: GENERATOR FEES
SUMMARY :
Existing law :
1) Under existing law, the Health and Safety Code imposes
various hazardous waste fees on the generation,
transportation, transfer, storage, treatment, and disposal
of hazardous wastes. These fees are collected by either
the Board of Equalization (BOE or the board) or the
Department of Toxic Substances Control (DTSC). Revenues
from the hazardous waste fees are used to fund DTSC's
administration of the hazardous waste regulatory program
and the state Superfund program.
2) Requires the generator of hazardous waste to pay the State
Board of Equalization a generator fee for each generator
site for each calendar year, with certain exceptions and
conditions, based on tiers of rates calculated according to
the amount of waste generated during the prior calendar
year.
a) Existing law sets the base fee rate at $2,748 for the
1997 calendar year and requires the board to adjust the
base fee rate annually to reflect changes in the cost of
living.
This bill :
1) Requires each generator of 5 tons or more to pay a fee in
an unspecified amount per ton of hazardous waste generated
during the prior calendar year, subject to the specified
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conditions.
2) Eliminates the use of tiered divisions as a basis for
calculating different categories of fees.
COMMENTS :
1) Purpose of Bill . SB 231 has been introduced to re-organize
the current generator fee formula so that each generator of
hazardous waste pays per ton of hazardous waste generated.
This revised approach could simplify the reporting for
generators as well as simplify the collection by the
Department of Toxic Substances Control and the Board of
Equalization. Additionally, this approach could provide an
incentive to reduce the amount of hazardous waste
generated, thereby saving the generator money as well as
reducing possible exposure of hazardous waste to all
Californians.
2) Background . In enacting Senate Bill 1222 (Ch. 638, 1995),
the Legislature required the Secretary for Environmental
Protection to convene a task force to review the existing
hazardous waste fee structure and provide recommendations
to the Legislature no later than January 1, 1997. The task
force was directed to propose a new fee system for
providing financial support to California's hazardous waste
and hazardous substance regulatory programs which would 1)
provide protection for public health and safety and the
environment; 2) provide adequate funding to ensure
remediation of contaminated sites; 3) not impose a
disproportionate burden on any sector of California's
economy; 4) provide a level of funding that enables DTSC to
appropriately implement programs authorized by the
Legislature in a manner consistent with the objectives of
those programs; and, 5) provide a means of funding
consistent with the objectives of DTSC's programs
The task force consisted of representatives from the
Legislative Analyst, Senate and Assembly policy committees,
Senate and Assembly fiscal committees, state employees,
environmental organizations, and hazardous waste feepayers.
After reviewing the existing fee system, the task force
concluded 1) the fee system is complex due to many
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incremental legislative or policy changes, 2) revenue
prediction is difficult, 3) revenues are in a declining
pattern, and 4) some fees are not cost-effective to collect
and are insufficient to fund certain needs. The task force
adopted the principle that an entity receiving a benefit or
causing a problem should pay the costs associated with the
fee's regulation, except in those instance in which a
specific beneficiary or polluter cannot be identified. In
those cases, the task force proposed the development of a
funding source from a broad-based fee. Finally, the task
force report suggests a reduction and consolidation of the
fees paid by the hazardous waste industry for regulation,
permits, and oversights in order to provide a funding
source related to the activities supported by the fees.
3) Simplifying A Complex Fee Structure . The current hazardous
waste generator fee is both complex to calculate and tiered
in such a way as to be of questionable fairness. In
discussions convened by the staff of the Senate
Environmental Quality Committee in late 2008, there is an
interest among stakeholders in revising the current fee
structure to simplify and make fairer the structure of the
generator fee and possibly other fees that contribute to
the HWCA. Specifically, concern has been voiced that the
current organization of the generator fee encourages
sources to generate greater amounts of hazardous waste.
The generator fee is the single largest source (approximately
half) of revenue within the Hazardous Waste Control Account
and this account has been spending more than it has been
receiving in revenue over the last four fiscal years. DTSC
has utilized less than its authorized budgetary authority
from the HWCA, owing in part to the available reserves in
the Account. In addition to the generator fee, the
Hazardous Waste Control Account receives revenue from
eleven other fees. In addition to the dwindling reserves
in the HWCA, there is growing concern that the current
economic downturn will quickly deplete the remaining
reserves, thereby jeopardizing programs at DTSC.
Approximately 2,500,000 tons of hazardous waste was manifested
during 2007 in California. Almost 1.5 million tons of
hazardous waste was subject to the generator fee in 2007.
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4) Exploring Policy Options to Simplify Fee Collection and
Maintain Fairness.
As the past chair of Senate Budget Subcommittee responsible
for Cal EPA programs, Senator Lowenthal initiated several
efforts to revise fees and has introduced SB 231 as a
vehicle to determine if stakeholders and the administration
can agree on a plan for revising the generator fee. The
current state of the HWCA raises the question of whether a
uniform fee-per ton approach is a better policy choice and
more appropriate given the change in environmental policies
and revenue streams over the last decade. There is also a
need to advance legislation on this topic given the
distinct possibility that DTSC may confront a near-term
obstacle with continuing operations in light of the
changing economics of many firms and probable changes,
perhaps dramatically so, in what they have historically
paid to the HWCA.
5) End Note: Dr. Jennings wishes to express his appreciation
to the chair, members, and staff of the Senate
Environmental Quality Committee for their fine work and
dedication to ensure that California's environmental
policies will serve as a model in the coming years.
SOURCE : Senator Lowenthal
SUPPORT : None on file
OPPOSITION : None on file