BILL ANALYSIS C.S.S.B. 1683 By: Nixon (Howard) May 15, 1995 Committee Report (Substituted) BACKGROUND The Used Oil Recycling program was created by Acts 1991, 72nd Leg., ch. 303, eff. Sept. 1, 1991 and amended by Acts 1993, 73rd Leg., ch. 899, eff. Oct. 1, 1993. At the time the program was established, the Environmental Protection Agency (EPA) had not promulgated their final rules related to used oil or oil filters. The rules, once adopted, were inconsistent with Texas' law and with the rules adopted by the Texas Natural Resource Conservation Commission (TNRCC). The original legislation addressed used oil; no provisions were made for used oil filters. Subsequent to the enactment of legislation, the TNRCC adopted rules regarding used oil and used oil filters (18 TexReg 6493, effective Oct. 6, 1993) that are among the most stringent in the nation. The current eight cent per gallon fee attached to the sale of oil has raised approximately $8 million per year. The fund has returned an average of $2.6 million per year, for the past four years, to the state's general revenue fund. The TNRCC has used up to 20 percent of the fund for administrative costs. There have been 60 direct grants made to local governments for a total of $2,474,212 since the beginning of the grant program in 1992. In 1993 additional grants were made to Councils of Government for a total of $1,518,940 of which 62% of the total was re-distributed to local communities for used oil collection. PURPOSE SB 1683 will make Texas' regulations consistent with federal standards, provide more specific legislative direction for the management of used oil filters, and create an incentive program for private industry through which more used oil collection centers will be established. SB 1683 will also cap administrative costs, reduce available funds through a lower fee on motor oil, and provide for a fee sunset. RULEMAKING AUTHORITY It is the committee's opinion that this bill expressly grants rulemaking authority to the Texas Natural Resource Conservation Commission (TNRCC) in SECTION 4 [Sec. 371.028, Health & Safety Code] and SECTION 10 [Sec. 361.432, Health & Safety Code] of the bill. It is also the committee's opinion that this bill does not expressly grant rulemaking authority, but modifies existing rulemaking authority of the TNRCC in SECTION 4 of the bill [Sec. 371.023, Sec. 371.024, and Sec. 371.026, Health & Safety Code]. SECTION BY SECTION ANALYSIS SECTION 1. Amends Sections 371.001 and 371.002, Health & Safety Code, as follows: Sec. 371.001 amends the short title of this act from Used Oil Collection, Management, and Recycling Act to Texas Used Oil Collection, Management, and Recycling Act. Amends Section 371.002, Health and Safety, by deleting existing findings and adding new findings as follows: (1) when properly managed and recycled, used oil is a valuable energy resource (2) used oil can be recycled into a number of different products (3) improper disposal of used oil is a significant environmental problem (4) there is a need for an expanded statewide network of used oil collection sites (5) the private sector, with incentives, is best equipped to establish and operate used oil collection centers (6) the need for publicly operated used oil collection centers is greatest in more sparsely populated areas and the need should diminish (7) the Environmental Protection Agency (EPA) has issued final regulations classifying and regulating used oil and used oil filters (8) the current Texas used oil and used oil filter program imposes more stringent requirements than the EPA rules (9) limited public money is needed to finance infrastructure investments to collect, manage and recycle used motor oil (10) the federal standards establish a balanced approach SECTION 2. Amends Subchapter A, Chapter 371, Health and Safety Code, by adding 371.0025 as follows: (a) States that the purposes of this chapter are to ensure that the Texas used oil program is consistent with and not more stringent than the federal program, and to establish a program to promote public and private do-it-yourselfer used oil collection centers and used oil collection centers. (b) This chapter does not apply to used oil generated in connection with activities regulated by the Railroad Commission of Texas, exempted under 40 C.F.R. §279.10(g), or generated through other exempted activities. (c) This chapter does not apply to a used oil filter generated in connection with certain activities regulated by the Railroad Commission. SECTION 3. Amends Section 371.003, Health and Safety Code, by deleting the existing definition of "public used oil collection center," "generator," and "reclaiming" and adding new findings as follows: (1) "Aboveground tank" means a tank used to store or process used oil that is not an underground storage tank. (2) "Automotive oil" means any lubricating oils intended for use in an internal combustion engine for an automobile, bus, or truck. (3) "Commission" means the Texas Natural Resource Conservation Commission. (4) "Container" means a portable device in which material is stored, transported, treated, disposed of, or otherwise handled. (5) "Do-it-yourselfer used oil collection center" means a site that accepts or aggregates and stores used oil collected from household do-it-yourselfers. If the registered do-it-yourselfer used oil collection center is also a used oil generator, the center may commingle household do-it-yourselfer used oil with its own self-generated used oil. (6) "Existing tank" means a tank that is used for the storage or processing of used oil and that as of September 1, 1995, is in operation or being installed. (7) "Household do-it-yourselfer (DIY) used oil" means oil that is derived from a household, including used oil generated through the maintenance of a personal vehicle or equipment. (8) "Household do-it-yourselfer used oil generator" means an individual who generates household do-it-yourselfer used oil. (9) "New tank" means a tank that will be used to store or process used oil. (10) "Petroleum refining facility" means an establishment primarily engaged in producing gasoline, etc. through fractionation or other processes. (11) "Processing" means chemical or physical operations designed to produce from used oil fuel oils, lubricants, or other oil-derived products. (12) "Reclaiming" means processing material to recover a usable product or regenerating material, rather than used oil. (13) "Recycling" adds subsection (C) to the current definition to include burning used oil for energy recovery. (14) "Rerefining" means applying processes to material composed primarily of used oil to produce high-quality base stocks for lubricants or other petroleum products. (15) "Rerefining distillation bottoms" means the heavy fraction of filtered and dehydrated used oil produced by vacuum distillation. (16) "Tank" means a stationary device designed to contain an accumulation of used oil that is constructed primarily of nonearthen materials. (17) "Used oil" means any oil that has been refined from crude oil, that as a result is contaminated; deletes language calling "used oil" unsuitable for its original purpose. (18) "Used oil aggregation point" means a site that accepts, aggregates or stores used oil collected from other used oil sites owned by the owner of the aggregation point, or from household do-it-yourselfers. (19) "Used oil burner" means a facility where used oil not meeting specific requirements is burned for energy recovery in specified devices. (20) "Used oil collection center" means a site or facility registered by the commission to manage used oil and accepts oil from used oil generators who transport used oil in shipments of not more than 55 gallons and household do-it-yourselfers. (21) "Used oil filter" means a non-terne-plated oil filter that as a result of use, storage, or handling has become contaminated by physical or chemical impurities. (22) "Used oil fuel marketer" means a person who directs a shipment of off-specification used oil or first claims that used oil to be burned for energy recovery meets used oil specifications. (23) "Used oil generator" means any person, by site, who produces used oil or first causes used oil to become subject to regulation. (24) "Used oil processor or rerefiner" means a facility that processes used oil. (25) "Used oil transfer facility" means a transportation-related facility where shipments of used oil are held for more than 24 hours and not longer than 35 days. (26) "Used oil transporter" means a person who transports used oil or owns or operates a used oil transfer facility. SECTION 4. Chapter 371, Subchapter B, Health and Safety Code, is amended as follows: Sec. 371.021 adds used oil filters to the public education program. Sec. 371.022 requires high volume automobile oil retailers to include instructions for disposal of used oil filters on the already required sign posted in a prominent place. Sec. 371.023 is amended as follows: (a) adds private entities to the list of possible recipients of grants for used oil collection programs. Stipulates that the grant program is for the purpose of encouraging the collection, reuse, and recycling of household do-it-yourselfer used oil. (b) Allows the commission to approve a grant for curbside pickup of containers of household do-it-yourselfer used oil, retrofitting of municipal solid waste equipment to facilitate curbside pickup, establishment of do-it-yourselfer used oil collection centers and used oil collection centers at locations accessible to the public, provision of containers and other materials and supplies that can be used to store household do-it-yourselfer used oil, and any other activity the advisory committee established in Subsection (c) determines will encourage the proper recycling of household do-it-yourselfer used oil. (c) Is added to require the commission to appoint an advisory committee for the used oil grant program. (d) The commission is required to establish procedures for the application for and criteria for the award of grants under this section, and to adopt guidelines for allowable administrative expenditures in accordance with guidelines established by the advisory committee. Sec. 371.024 is amended as follows: (a) Encourages all appropriate businesses and government agencies to serve as do-it-yourselfer used oil or used oil collection centers. (b) Requires a do-it-yourselfer used oil collection center and a used oil collection center to register with the commission biannually and report to the commission annually. (c) Requires the commission to govern the registration of and reporting by do-it-yourselfer used oil and used oil collection centers. (d) Requires the commission to adopt standards for managing and operating a do-it-yourselfer used oil collection center or a used oil collection center. (e) Allows the commission to impose a fee to cover the actual cost of registering do-it-yourselfer and used oil collection centers. Adds a requirement that private entities which serve voluntarily as do-it-yourselfer used oil collection centers are exempt from registration fee. Sec. 371.0245 is amended as follows: (a) Requires the commission to reimburse do-it-yourselfer or used oil collection centers for costs associated with the center's disposal of household do-it-yourselfer used oil collected that, unknown to the collection center, is unfit for recycling or has been commingled with other oils and is unsuitable for recycling, or contaminated used oil left at the collection center after posted business hours. (b) A registered do-it-yourselfer or used oil collection center or used oil collection center is eligible for reimbursement if it demonstrates that the center has established procedures to minimize the risk that the center will mix used oil the center generates or collects from the public with hazardous wastes, the center accepts not more than five gallons of used oil from any person at one time, or 55 gallons of used oil from any person at one time if the center is a registered used oil collection center; and that the center can document the volume of used oil the center collects from the public during any period or length of time under review by requiring individuals who leave do-it-yourselfer oil to provide their names, addresses, and approximate amount of oil left. Deletes requirement that do-it-yourself oil be kept in a separate container. (c) The owner or operator of a registered do-it-yourselfer used oil collection center may presume that an amount of no more than the applicable limit of used oil collected from a member of the public is not mixed with a hazardous substance. (d) A registered do-it-yourselfer used oil collection center may not be reimbursed for more than $7,500 in any state fiscal year. (e) Requires all reimbursements made under this section to be paid out of the used oil recycling fund which shall not exceed an aggregate amount of $500,000 each fiscal year. Sec. 371.0246 is amended as follows: (a) An owner or operator of a do-it-yourselfer used oil collection center or used oil collection center may apply for reimbursement from the commission. (b) An application for reimbursement shall be submitted on an approved form. (c) In addition to already existing requirements, an application for reimbursement must contain a copy of any shipping documents that accompanied the transportation of the shipment of used oil, and documentation required before acceptance of a hazardous waste by the disposal facility that accepted the contaminated used oil for treatment and/or disposal. (d) Claims for reimbursements are subject to funds available for reimbursement. Sec. 371.025 is amended by changing "public used oil collection center" to "do-it-yourselfer used oil collection center" and adding "or used oil collection center." Sec. 371.026 is amended as follows: (a) The commission is required to govern registration and reporting of used oil handlers other than generators. The rules shall require the handler to register biannually, report annually, provide evidence of familiarity with applicable state laws and rules applicable to used oil handling, and provide proof of financial responsibility for liability that may be incurred in handling used oil. (b) Requires the commission to adopt reasonable management and safety standards for the handling of used oil. (c) Allows the commission to impose a registration fee in an amount sufficient to cover the actual cost of registering used oil handlers. (d) Is added to allow a used oil transporter to consolidate or aggregate loads of used oil for the purposes of transportation. Also allows a used oil transporter to conduct incidental processing operations not designed to produce used-oil-derived products or used oil fuel. Sec. 371.027 changes "department" to "commission". Sec. 371.028 is amended to require the commission to establish, not later than January 1, 1996, rules, standards and procedures as necessary to implement the used oil program. They must be consistent with and not more stringent than federal used oil management standards. SECTION 5. Section 371.041, Health and Safety Code, is amended as follows: (b) A person commits an offense if the person: (1) not amended (2) knowingly mixes or commingles used oil with waste that is to be disposed of in landfills or directly disposes of used oil on land (3) knowingly transports, treats, stores, disposes, recycles, causes to be transported, or otherwise handles any used oil in violation of standards or rules, or without complying with registration requirements. (4) intentionally applies used oil to roads or land (5) violates an order of the commission to cease and desist (6) intentionally makes any false statement or representation in any document filed, maintained, or used for program compliance (c) It is an exception to the application of Subsection (b) if a person unknowingly disposes into the environment any used oil not properly segregated from other solid wastes. (d) Reference to "solid waste" is changed to "waste". SECTION 6. Amends Section 371.042, Health and Safety Code, as follows: (a) Except as provided by Subsection (b), an offense under 371.041 is punishable by a fine of not less than $100 or more than $10,000 for each act of violation or each day of a continuing violation, imprisonment for a term not to exceed five years, or both. (b) If the defendant has been previously convicted, the offense is punishable by a fine of not less than $200 or more than $20,000 for each act of violation or each day of a continuing violation, imprisonment for a term not to exceed 10 years, or both. SECTION 7. Section 371.043, Health and Safety Code, is amended as follows: (c) Reference to "Section 371.026" is deleted. (d) Changes "department" to "commission". SECTION 8. Sec. 371.061, Health and Safety Code, is amended as follows: (b)(3) Changes "department" to "commission". (c) The commission may use money in the fund only for the purposes authorized by this chapter. Adds grants to public and private do-it-yourselfer used oil collection centers; registration of do-it-yourselfer used oil centers, used oil collection centers, and used oil handlers; and administrative costs as authorized purposes. (d) Requires the commission to set aside 25 percent of the fees collected under Section 371.062 for the sole purpose of restoring environmental quality that have been contaminated through improper used oil management. This subsection expires on January 1, 1997. SECTION 9. Sec. 371.062, Health and Safety Code, is amended as follows: (a) Definitions are amended as follows: (1) "Distributor" is added to mean a distributor who maintains a distribution center or warehouse in this state and annually sells more than 25,000 gallons of automotive oil. (2) "First sale" means the first actual sale of automotive oil delivered to a location in this state and sold to a purchaser who is not an automotive oil manufacturer or distributor. A stipulation is added to the current definition that the term does not include the sales of automotive oil to any subsequent purchaser who maintains a registered do-it-yourselfer used oil collection center at the location where the oil is changed, or to the United States government. Other definitions are renumbered accordingly. (b) A distributor, as well as an oil manufacturer, who makes a first sale of oil is liable for a fee. (f) A distributor, as well as an oil manufacturer, is obligated to follow the requirements of this subsection. (j) The fee imposed under this section is one cent per quart or four cents per gallon of automotive oil. (m) A distributor must obtain a permit from the comptroller; the comptroller is required to adopt an application form for the permit which must include the business name, the location, the names of principal officers of the corporation or members of the partnership (if applicable), any other information required by the comptroller. (n) Allows the comptroller to deny or revoke a permit under Subsection (m) if false information is submitted. (o) A permit under Subsection (m) may not be assigned. SECTION 10. Amends Subchapter N, Chapter 361, Health and Safety Code, by adding Section 361.432 as follows: (a) Prohibits used oil filters from being intentionally or knowingly placed in or accepted for disposal in a landfill permitted by the commission. (b) Allows the commission by rule to adopt reasonable standards for the management of used oil filters and to encourage the recycling of used oil filters. SECTION 11. (a) The change in law made by this Act to Section 371.042, Health and Safety, applies only to an offense committed on or after the effective date of this Act. (b) An offense committed before the effective date of this Act is covered by the law in effect when the offense was committed. SECTION 12. (a) Effective date: September 1, 1995, except as provided by Subsection (b). (b) Effective date for Section 371.062(j), Health and Safety,: January 1, 1997. SECTION 13. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substantial differences between the committee substitute for SB 1683 and the engrossed version are as follows: SB 1683 as Engrossed Committee Substitute for SB 1683 SECTION 2, §371.002 FINDINGS is included in SECTION 1 of the substitute. SECTION 1 includes §371.002 FINDINGS, which is in SECTION 2 of the engrossed version. SECTION 3 of the engrossed version corresponds to SECTION 2 of the substitute. SECTION 2 of the substitute corresponds to SECTION 3 of the engrossed version. SECTION 4 of the engrossed version corresponds with SECTION 3 of the substitute.§371.003 (5) "Do-it-yourselfer used oil collection center" means a site that accepts or aggregates and stores used oil collected from household do-it-yourselfers. (6)(B) the definition for "existing tank" includes a stipulation that the contractual obligation is for installation of the tank to be completed within a reasonable time. 26 "Used oil transporter" includes (A) collects used oil from more than one generator and transports the collected used oil. SECTION 3 of the substitute corresponds to SECTION 4 of the engrossed version. §371.003 (5) "Do-it-yourselfer used oil collection center" means a site that accepts or aggregates and stores used oil collected from household do-it-yourselfers. The substitute adds the following: If the registered do-it-yourselfer used oil collection center is also a used oil generator, the center may commingle household do-it-yourselfer used oil with its own self-generated used oil. (6)(B) the definition for "used tank" does not include the stipulation that the contractual obligation is for installation of the tank to be completed within a reasonable time. (26) omits the engrossed letter (A) and renumbers (B) and (C) to become (A) and (B). SECTION 5 of the engrossed version corresponds to SECTION 4 of the substitute. SECTION 4 of the substitute corresponds to SECTION 5 of the engrossed version. §371.023(b)(3) refers to establishment of do-it-yourselfer used oil collection centers. §371.023(b)(3) refers to establishment of do-it-yourselfer used oil collection centers and used oil collection centers. §371.023(b)(5) references Subsection (e). §371.023(b)(5) references Subsection (c). §371.023(c) The advisory committee consists of 9 members. Part of the advisory committee represents used oil collection centers. The advisory committee recommends guidelines for allowable administrative expenditures. §371.023(c) The advisory committee consists of 7 members. Part of the advisory committee represents operators of used oil collection centers. The advisory committee establishes guidelines for allowable administrative expenses. §371.023(d) The commission is required to adopt guidelines for allowable administrative expenditures. §371.023(d) The commission is required to adopt guidelines for allowable administrative expenses. §371.024(e) A private entity that serves voluntarily as a do-it-yourselfer used oil collection center is exempt from the registration fee. §371.024(e) A private entity that serves voluntarily as a do-it-yourselfer used oil collection center or a used oil collection center is exempt from the registration fee. §371.0245(a)(1)&(2) and (b)(3)(A) include DIY in language. §371.0245(a)(1)&(2) and (b)(3)(A) do not include DIY in language. §371.0245(b)(2) the center accepts not more than five gallons of used oil from any person at any one time. §371.0245(b)(2) is divided into (A) the center accepts not more than five gallons of used oil from any person at any one time if the center is a registered do-it-yourselfer used oil center; or (B) 55 gallons of used oil from any person at one time if the center is a registered used oil collection center. §371.0245(c) A collection center may presume that a quantity of not more than five gallons of used oil collected from a member of the public is not mixed with a hazardous substance . . . §371.0245(c) A collection center may presume that a quantity of used oil collected from a member of the public that does not exceed the applicable collection limit established by that subsection is not mixed with a hazardous substance . . . §371.0246 (c)(2) refers to do-it-yourselfer used oil collection center. §371.0246 (c)(2) refers to do-it-yourselfer used oil collection center or used oil collection center. §371.0246 (c)(4) application must include copy of manifest. §371.0246 (c)(4) application does not include copy of manifest. §371.025 (a),(b) and (c) refer to do-it-yourselfer used oil collection center. §371.025 (c) This section does not apply to grossly negligent activities related to the operation of a used oil collection center. §371.025 (a),(b) and (c) refer to do-it-yourselfer used oil collection center or used oil collection center. §371.025 (c) This section does not apply to grossly negligent activities related to the operation of a do-it-yourselfer used oil collection center or a used oil collection center. §371.028 Rules must be consistent with and no more stringent than the used oil management standards under 40 C.F.R. Part 279. §371.028 Rules must be consistent with and not more stringent than the used oil management standards under the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.) SECTION 6 of the engrossed version corresponds to SECTION 5 of the substitute. SECTION 5 of the substitute corresponds to SECTION 6 of the engrossed version. §371.041(b)(3) refers to used oil regulated by the commission in violation of standards or regulations. §371.041(b)(3) is divided into (A) & (B) and refers to used oil within the state in violation of standards or rules. §371.041(b)(6) A person commits an offense if the person makes any false statement . . . §371.041(b)(6) A person commits an offense if the person intentionally makes any false statement . . . SECTION 7 of the engrossed version corresponds to SECTION 6 of the substitute. SECTION 6 of the substitute corresponds to SECTION 7 of the engrossed version. SECTION 8 of the engrossed version corresponds to SECTION 7 of the substitute. SECTION 7 of the substitute corresponds to SECTION 8 of the engrossed version. SECTION 9 of the engrossed version corresponds to SECTION 8 of the substitute. SECTION 8 of the substitute corresponds to SECTION 9 of the engrossed version. §371.061(c)(4) is deleted. §371.061(c)(4) is not deleted. §371.061(d) This subsection expires on January 1, 1998. §371.061(d) This subsection expires on January 1, 1997. SECTION 10 of the engrossed version corresponds to SECTION 9 of the substitute. SECTION 9 of the substitute corresponds to SECTION 10 of the engrossed version. §371.062(a)(1) "Distributor" means a person who maintains a distribution center or warehouse in this state and annually exports from this state to a location outside the state more than 25,000 gallons of automotive oil. §371.062(a)(1) "Distributor" means a person who maintains a distribution center or warehouse in this state and annually sells more than 25,000 gallons of automotive oil. §371.062(a)(2)(C) The term does not include the sale of automotive oil to a subsequent purchaser who maintains a do-it-yourselfer used oil collection center. . . §371.062(a)(2)(C) The term does not include the sale of automotive oil to a subsequent purchaser who maintains a do-it-yourselfer used oil collection center or used oil collection center. . . §371.062(a)(2)(D) The term does not include sale of automotive oil to the United States government. §371.062(a)(2)(D) The term does not include sale of automotive oil to the United States. §371.062(j) The fee is two cents per quart or eight cents per gallon. Fee is reduced as of September 1, 1997. §371.062(j) The fee is one cent per quart or four cents per gallon. There is no reduction for this fee, but the effective date is September 1, 1997 [see SECTION 12(b)]. SECTION 11 of the engrossed version corresponds to SECTION 10 of the substitute. SECTION 10 of the substitute corresponds to SECTION 11 of the engrossed version. §361.432(a) uses "shall". §361.432(a) uses "may". SECTION 12 of the engrossed version corresponds to SECTION 11 of the substitute. SECTION 11 of the substitute corresponds to SECTION 12 of the engrossed version. SECTION 13 of the engrossed version corresponds to SECTION 12 of the substitute. SECTION 12 of the substitute corresponds to SECTION 13 of the engrossed version. Effective date for §371.062(j) is January 1, 1996. Effective date for §371.062(j) is January 1, 1997. SECTION 14 of the engrossed version corresponds to SECTION 13 of the substitute. SECTION 13 of the substitute corresponds to SECTION 14 of the engrossed version. SUMMARY OF COMMITTEE ACTION SB 1683 was considered by the House Committee on Environmental Regulation in a public hearing on May 15, 1995. The committee considered a complete substitute for the bill. The substitute was adopted without objection. SB 1683 was reported favorably as substituted with the recommendation that it do pass and be printed, by a record vote of eight (8) ayes, no (0) nays, no (0) pnv, and one (1) absent.