ACG H.B. 3274 75(R)BILL ANALYSIS ENVIRONMENTAL REGULATION C.S.H.B. 3274 By: Howard 4-18-97 Committee Report (Substituted) BACKGROUND Texas has maintained a ban on placing used oil filters in landfills since 1992. The Texas Natural Resource Conservation Commission (commission) wrote extensive rules in an attempt to insure compliance with the landfill ban. These rules are the strictest in the United States and far exceeded federal standards. In 1995 the legislature passed a reform of the used oil recycling program (74R, SB 1683), which contained a statutory directive to maintain the existing landfill ban on oil filters. During floor debate a legislative intent statement was entered into the record to maintain the administrative rules that were first implemented in 1991 (TAC 330.1180-1189) dealing with used oil filters. These stringent rules may have had unintended consequences. Auto and lube shops which were once able to sell barrels of used oil filters for a nominal fee to several industries which used the filters as feedstock had to begin paying significant fees to have the filters taken to one of the facilities which could comply with the used oil filter management standards. There are several possible end uses for used oil filters. However, with current management standards, only a limited number of processes are able to meet the standards. PURPOSE The purpose of this act is to give specific statutory guidance to standards for regulating the collection, management, and processing of used oil filters. While maintaining a ban on placing used oil filters in landfills, this act would insure that standards are written to maximize the number of end users willing to accept used oil filters as feedstock for finished products or for use in energy recovery. RULEMAKING AUTHORITY It is the committee's opinion that though this bill does not expressly grant any new rulemaking authority to a state officer, department, agency or institution, the bill refers to rulemaking authority of the Texas Natural Resources Conservation Commission in SECTION 5 of the bill [Sec. 371.083(3)(B), Health and Safety Code.] SECTION BY SECTION ANALYSIS SECTION 1. Amends Health and Safety Code, Section 371.001 by changing the Section heading to reflect the addition of used oil filters. SECTION 2. Amends Health and Safety Code, Section 371.001 by changing the short title to reflect the addition of used oil filters. SECTION 3. Amends Health and Safety Code, Section 371.0025(c) by stipulating that this chapter does not apply to a used oil filter generated in connection with activities regulated by the Railroad Commission (RRC) under Chapters 131 and 134, Natural Resources Code, or regulated by the Public Utilities Commission (PUC) under the Public Utility Regulatory Act of 1995. Requires a registered processor to process a filter regulated by the RRC or the PUC in accordance with the regulations of the applicable agency. SECTION 4. Amends Health and Safety Code, Section 371.0246(c) by clarifying that the executive director referred to is the director of the commission. SECTION 5. Amends Health and Safety Code, Chapter 371 by adding a new Subchapter E as follows: Sec. 371.081(a) specifies to whom this subchapter applies. Sec. 371.081(b) Other than the ban on placing used oil filters into a landfill, end users of used oil filters are exempt from this subchapter. Section 371.082 defines the following terms: (1) "Bulk filter container" means a container that is approved by the commission, has a capacity of more than 55 gallons, and is a part of an integrated system. (2) An "end user" is one who uses a processed used oil filters or its components in the manufacture of finished products or uses a processed used oil filters or its components for energy recovery. (3) "Free-flowing oil" means a noticeable stream of oil that exits a used oil filter when the filter is lifted. (4) "Household do-it-yourselfer used oil filter" is a used filter that is generated through the maintenance of an individual's personal equipment. (5) "Household do-it-yourselfer used oil filter generator" is the person who generates a household do-it-yourselfer used oil filter. (6) "Oil filter" is the part of an engine system designed to remove contaminants from the flowing oil within the system. (7) "Processing" is a method that separates free-flowing oil and the components of a used oil filter from a whole filter. (8) "Processor" is the person engaged in processing. (9) "Terne" means an alloy of tin and lead. (10) "Transfer facility" means a facility that holds used oil filters during transportation for more than two working days. (11) "Transporter" means a person who is engaged in the off-site transportation of used oil filters. (12) "Used oil filter" is an oil filter detached from an engine system after being used. (13) "Used oil filter collection center" is a facility that accepts household do-it-yourself used oil filters. Facilities can be public or privately owned service centers or other businesses that store used filters in above-ground containers. (14) "Used oil filter component" includes the filter media and metal housing of a used oil filter. (15) "Used oil filter generator" is one who in the course of business produces used oil filters or first causes them to become subject to regulation, but does not include a household do-ityourself used oil filter generator. Sec. 371.083 bans the generation, collection , transport, processing, or recycling used oil filters in a manner that endangers the public or the environment. Acts specifically banned include placing filters on land or in a permitted landfill; collection, transporting, processing, or recycling used oil filters without complying with the requirements of this subsection or in violation of rules adopted by the commission; selling, conveying, or otherwise transferring used oil filters to an end user or disposal facility that has not been processed to the standards required of the particular end use. Sec. 371.084(a) requires used oil filter generators to remove free-flowing oil. Methods of removal include (1) puncturing and draining while the filter is hot, (2) crushing and hot-draining, (3) dismantling and hot-draining, (4) flushing, (5) other methods approved by the commission. Sec. 371.084(b) allows generators to process used oil filters on site to an end user's specifications. Sec. 371.084(c) requires containers for the storage or transportation of used oil filters to be (1) securely closed, (2) waterproof, (3) nonleaking, (4) in good condition, and (5) labeled "Used Oil Filters." Sec. 371.084(d) limits on site storage to no more than two bulk fuel containers, six or fewer containers that do not have an aggregate volume of more than 330 gallons, or more than six containers with commission approval. Sec. 371.084(e) allows a used oil filter generator to transport at one time one bulk fuel container or five or fewer containers that do not have an aggregate volume of more than 275 gallons without registering as a transporter. Sec. 371.084(f) allows generators to ship a used oil filter only to an end user, registered processor, or transfer facility; or with prior approval of the commission. Sec. 371.084(g) stipulates requirements for used oil filter generators who transport used oil filters. Sec. 371.085(a) through (h) requires used oil filter collection centers to register every other year with the commission and to report annually the number of used oil filters collected and shipped, as well as the destinations. The standards applied to generators regarding draining oil, containers for storing used oil filters, the number of filters that can be stored or self transported, are applied to used oil collection center facilities. Sec. 371.085(i) allows organizations to organize one-day special events for the collection of used oil filters as long as the commission is given 30 day notice. Registration and reporting requirements do not apply to these one-day collection events. Sec. 371.085(j) requires facility which ceased to operate as a collection center to notify the commission within 30 days. Sec. 371.086 requires a person who transports or transfers used oil filters to register every other year with the commission and to report yearly to the commission the quantity, sources and dates received, and the destinations of used oil filters. New transporters must register within 30 days of beginning operation. The transporter must ensure that (1) filters are accompanied by proper shipping documents and the documents are retained for three years and made available for inspection, (2) are destined for a registered processor, an end user, or a permitted disposal facility in the case of nonrecyclable filter components and (3) are shipped in containers that are securely closed, waterproof, nonleaking, and in good condition. Sec. 371.087 requires processors to register with the commission every other year and to report to the commission every year. A new processor must register with the commission within 30 days of beginning operation. Processors must keep records of the quantity of used oil filters received, the sources and dates the used oil filters were received, and the destinations of used oil filter components. The processor is required to maintain on-site a copy of end user's acceptance standards and must retain and make available for inspection copies of shipping documents relating to all shipments for three years. Filters must be stored in containers that are securely closed, waterproof, nonleaking, and in good condition. Processors may not store on-site used oil filters or used oil filter components for more than 90 days. SECTION 6. Repeals Chapter 361, Health and Safety Code, Sec. 361.432. SECTION 7.Effective date of the act is September 1, 1997. SECTION 8. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE In addition to the substitute reorganizing some of the language from the original bill, the following changes are made: HB 3274 did not have exemptions for filters regulated by the RRC and the PUC. CSHB 3274 expands exemptions to cover filters regulated by the RRC and the PUC. CSHB 3274 expands the provisions to which end users are subject to include not only the landfill ban, but the requirements for storage in containers. CSHB 3274 adds definitions for the following: bulk filter container, free-flowing oil, terne, transfer facility, and transporter. The substitute also revises the definitions for the following: end user, processing, and used oil filter. HB 3274 does not specifically include parts facilities as possible collection centers. CSHB 3274 specifically includes parts facilities as possible collection centers. CSHB 3274 alters the prohibition from placing a used oil filter in a landfill, so that placing (rather than just receiving) a filter in waste intended for a landfill is a violation. The substitute also alters the prohibition to insure that recyclable components of the oil filter, as defined by the commission, are included in the ban. The substitute changes the storage limits for both generators and collection centers so that they could have on site two bulk filter containers, up to six 55 gallon drums, or more upon commission approval. The substitute changes the term "unprocessed filters" (as used in the original) to "filters", so that the provisions apply to both processed and unprocessed filters. HB 3274 allows a generator to self-transport filters if they are taking them to a processor or an end user. The substitute allows a generator to self-transport filters to a processor, end user, or transfer facility. Additionally, the substitute requires that the number of filters transported by a generator be reported to the commission in the same way a registered transporter reports. As well, the generator must comply with federal and state transportation requirements. CSHB 3274 changes reporting requirements of collection centers to include that they report the destination of oil filters. The substitute requires a collection center which self-transports to comply with federal and state transportation requirements. HB 3274 provides a 90 day time limit for transporters and processors to register with the commission. The substitute changes that time limit to 30 days. The substitute specifies a 30 day time limit which transporters or transfer facilities can hold a filter.