BILL ANALYSIS
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THIRD READING
Bill No: SB 231
Author: Lowenthal (D)
Amended: 4/20/09
Vote: 21
SENATE ENV. QUALITY COMMITTEE : 5-2, 4/27/09
AYES: Simitian, Corbett, Hancock, Lowenthal, Pavley
NOES: Runner, Ashburn
SENATE APPROPRIATIONS COMMITTEE : 7-3, 5/11/09
AYES: Kehoe, Corbett, DeSaulnier, Hancock, Leno, Wolk, Yee
NOES: Cox, Denham, Walters
NO VOTE RECORDED: Oropeza, Runner, Wyland
SUBJECT : Hazardous waste: generator fees
SOURCE : Author
DIGEST : This bill requires each generator of five 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 exceptions.
ANALYSIS : 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 or the Department of
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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.
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 five 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 conditions.
2. Eliminates the use of tiered divisions as a basis for
calculating different categories of fees.
Background
In enacting SB 1222 (Chapter 638, Statutes of 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
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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
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.
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
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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.
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.
Comments
This bill 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11
2011-12 Fund
Fee revenues unknown increases
or decreases Special*
*Hazardous Waster Control Account
TSM:nl 5/12/09 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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