BILL ANALYSIS
SB 231
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Date of Hearing: August 4, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 231 (Lowenthal) - As Amended: June 22, 2010
Policy Committee: Environmental
Safety and Toxic Materials Vote: 6-3
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill resets the base amount of the Hazardous Waste
Generator Fee and changes the way the Department of Toxic
Substances Control (DTSC) may adjust the fee. Specifically,
this bill:
1)Sets the Hazardous Waste Generator Fee at $3,949, with a base
year of 2010.
2)Authorizes DTSC to adjust the fee annually, based on program
costs, but by no more than a 5% increase between calendar
years.
3)Prevents DTSC from increasing the fee in a year when there is
an account reserve balance greater than one-third of the
annual revenue generated by the fee or when there is an
outstanding loan from the Hazardous Waste Control Account to
the General Fund (GF).
FISCAL EFFECT
1)Potential increased annual revenue to the Hazardous Waste
Control Account, possibly in the millions of dollars, to the
extent program needs, as determined by DTSC, exceed changes in
the cost of living, as measured by the Consumer Price Index
(CPI).
2)Potential decreased annual revenue to the account, possibly in
the millions of dollars, to the extent fund conditions-an
account balance or outstanding loans to the GF-prevent an
increase to the fee in a year in which the CPI would have
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resulted in a fee increase under current law.
3)Minor, absorbable costs to DTSC to assess the need to adjust
the fee according to program needs, review fund balances, and
communicate with the Board of Equalization (BOE). (According
to DTSC, Board of Equalization (BOE) will continue to inform
businesses of fee changes.)
4)Minor annual savings to BOE, which will no longer be
responsible for adjusting the fee according to the general
cost of living.
COMMENTS
1)Rationale . The author expresses concern that, in recent
years, Hazardous Waste Control Account expenditures have
exceeded revenues to that account. This account imbalance has
occurred, according to the author, because of the statutorily
prescribed "autopilot" formula by which the Hazardous Waste
Generator Fee is adjusted. The author contends this bill will
improve management of the fee in two ways. First, the bill
ties the amount of the fee to annual changes in program needs,
not annual changes to the general cost of living. Second, the
bill places DTSC, instead of the Board of Equalization (BOE),
in charge of annually adjusting the fee. The author contends
this change is appropriate because DTSC, as the administering
entity, is most capable of identifying changes in program
needs and adjusting the fee accordingly.
2)Background . Current law requires generators of hazardous
waste, such as certain types of landfills and storage and
treatment facilities, to pay the Hazardous Waste Generator Fee
each calendar year. The amount of the fee paid by a generator
depends upon two factors: the "base" fee, set at $2,748 in
1997 dollars, and the amount of waste generated by a facility
during the preceding calendar year. Hazardous waste
generators pay the fee to BOE, which adjusts the base fee
annually according to the CPI. BOE deposits fee revenue in
the Hazardous Waste Control Account, which funds DTSC's
programs to regulate the generation, storage, transportation,
treatment and disposal of hazardous waste.
3)Shortfalls Loom Ahead, DTSC Says . Hazardous Waste Control
Account revenues and expenditures vary from year to year.
During fiscal years 2004-05 through 2008-09, the account
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generated annual revenue ranging from about $44 million to
just over $62 million, with annual revenues averaging
approximately $49 million. During that same period, account
expenditures ranged from $46 million to $57 million and
averaged about $51 million. Expenditures exceeded revenues in
four of the five years. While the account always carried a
balance, in 2007-08 the fund balance fell to 4% of program
expenditures. In only one year-2006-07-did the fund balance
exceed one-third of program expenditures. There were no loans
from the fund to the GF during this period.
Despite the maintenance of past fund balances, DTSC fears
future shortfalls. According to the department, the economic
downturn means a reduction in activities that generate
hazardous waste and which, therefore, produce program revenue.
Yet many program costs result from "legacy" activities-past
waste generation and disposal-that do not correspond to
current economic activity. For this reason, the department
projects fund shortfalls by 2014-15, absent adequate fee
increases.
4)There is no registered support for or opposition to this bill.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081