NORA Opposes California Senate Bill 546 

Statement of NORA, An Association of Responsible Recyclers Concerning
California Senate Bill 546

NORA is a national trade association, founded in 1984, whose more than 225 members provide collection, marketing and recycling services throughout the entire United States, including California.  NORA members collect and recycle on-specification and off-specification used oil, oil filters, antifreeze, wastewater, parts cleaning solvents and other chemicals.  NORA has been directly involved in the federal used oil management standards (codified at 40 CFR Part 279) and every significant federal and state used oil rule-making since 1985.  NORA members include companies that produce and market used oil fuel products as well as re-refined lubricants and feedstocks.

Although amended significantly, California Senate Bill 546 retains most of the elements of the original bill that (1) creates an expensive and cumbersome used oil testing scheme; and (2) unfairly discriminates against out-of-state used oil recyclers.

The testing scheme requires the testing of each load of used for total halogens, flashpoint and PCBs.  The testing must be accomplished by a laboratory certified by the State of California.  Although each load of used oil must be tested, the entity most knowledgeable about the oil, the generator, is not required to do the testing.  Indeed, the legislation states that a “transporter shall not require a generator to test used oil as a condition of accepting that used oil for shipment.”  There is no provision in the bill for managing used oil that does not pass the test.  Can it be blended by the in-state recycler to meet the specifications?  Does it have to be sent to a hazardous waste facility?  Or does it have to be transported back to the generator?

In any event, the burden for testing is imposed on the transporter, transfer facility or in-state recycler.  Out-of-state facilities are not allowed to conduct the testing – even if the testing were to be conducted by a California-certified laboratory.

S.B. 546 places an additional burden on transporters: “The department shall inspect transporters annually to verify compliance….The department shall charge the transporter for any costs, including indirect costs, associated with the inspection.”  Indirect costs include all costs of operating the department including rent, payroll, retirement, etc.  There is no similar provision for in-state recyclers.

Testing is expensive, especially for PCBs.  Generators are not required to test, out-of-state facilities are not allowed to test and independent used oil transporters are not likely to have the financial resources to pay for the testing. Without any doubt, testing each load of used oil generated in California would overwhelm the capacity of commercial laboratories certified by the State of California.  The only way to avoid chaos and comply with the testing requirements of S.B. 546 is for in-state recyclers to carry out the testing at the California-certified laboratories located at or near their recycling facilities.  The bill virtually guarantees that all used oil generated in California will flow to in-state recyclers.  Regardless of market conditions in the rest of the Nation, S.B. 546 will allow in-state recyclers to charge generators for handling their used oil.

Out-of-state recyclers would be allowed to receive used oil from California generators.  This would seem to occur in two ways.  First, if tested by a transporter or transfer facility the used oil could be transported out of state.  Second, to receive used oil generated in Californiaand be eligible for a recycling incentive, the out-of-state facility would have to be registered with the Integrated Waste Management Board.  This will require that the out-of-state facility certify that it is operating in substantial compliance with 40 CFR Part 279 and that the used oil it receives from California generators is being recycled to meet the purity standards or is producing a rerefined base stock. 

An out-of-state facility is subject to auditing and inspection by the California Department of Toxic Substances Control.  In addition, the out-of state facility “shall enter into an agreement with the department…to pay the department’s full expenses of conducting the audit, including any inspection costs the department may incur in determining whether the facility meet the requirements for certification.”

S.B. 546 has recently been amended to include most of the key provisions of A.B. 907 including special incentives or subsidies to facilities that re-refine used oil into lubricant products or feedstocks.  For the reasons stated in our position on A.B. 907, NORA opposes legislation that tilts the playing field to favor one type of legitimate recycling over another.

It is unclear whether the re-refining incentive that may be paid to the out-of-state recycler would outweigh the costs of the paperwork burden, the audit/inspection costs and the testing costs.

Although the burden on interstate commerce is less under the amended version of S.B. 546 (i.e. in comparison to the original version) there remains a significant degree of discrimination against out-of-state recyclers.

Overall, S.B. 546 is designed to drastically alter the flow of used oil generated in California to a few in-state facilities – thereby shutting off the flow of used oil to out-of-state facilities and requiring used oil to be transported much greater distances.