SPONSOR: Maxwell (Ransdall)

COMMITTEE ACTION: Voted "do pass" by the Committee on Environment and Energy by a vote of 10 to 7.

This substitute establishes a Dry Cleaning Solvent Environmental Response Trust Fund to provide moneys for the investigation, assessment, and remediation of releases of solvents from dry cleaning facilities. The fund is administered by the Hazardous Waste Management Commission. Payments from the fund may be made after July 1, 2002, and are capped at a total of $1 million per site. Payments may also not exceed 25% of the fund balance per site during any fiscal year. There is a $25,000 deductible for active facilities and abandoned sites. Moneys from the fund may not be used if the release was caused by illegal operating practices, if the facility operator obstructs actions by the Department of Natural Resources, or if the operator is in arrears for payments to the fund. Fund moneys may also not be used to compensate third parties for damages.

Operators of active facilities must register with the department and pay an annual registration surcharge to the fund. The surcharge is set at $500 for small facilities; $1,000 for medium facilities; and $1,500 for large facilities. Sellers of dry cleaning solvents must pay a solvent surcharge of $10 per gallon for chlorinated solvents and 50 cents per gallon for nonchlorinated solvents, collected quarterly. All surcharges are subject to a late fee of 15% plus 10% per annum interest on unpaid balances. If the unobligated balance of the fund exceeds $5 million, the facility registration and solvent surcharges are not collected until the fund balance falls below $2 million.

The substitute also requires the Hazardous Waste Management Commission to establish, by July 1, 2002, standards for new dry cleaning facilities, including requirements for solvent delivery, solvent storage, solvent disposal, prohibition of solvent discharges, and containment structures for dry cleaning units. The commission will also establish a schedule for upgrading existing dry cleaning facilities to the new standards within 3 years and determine facility closure procedures and appropriate completion requirements for corrective actions in response to a release.

Violators of any dry cleaning provisions of the substitute are subject to civil penalties of up to $500 per violation, payable to the fund. The dry cleaning provisions of the substitute terminate on August 28, 2007.

The substitute also restructures hazardous waste generator fees and category taxes and extends their sunset date from January 1, 2004, to January 1, 2005.

The annual revenue target for category taxes of $1.5 million is replaced with a calculation formula. The tax cap on waste placed in a disposal facility or stored 180 days or more on site is increased from $50,000 to $80,000; and the tax cap on other waste is increased from $25,000 to $40,000. The company cap is also increased from $50,000 to $80,000; and a minimum fee of $50 per year is established for all generators subject to category taxes. The current category tax exemption for out-of-state fuel blenders is repealed. Category taxes on blended fuels are assessed and collected at the site where the fuel is burned, and are subject to a cap of $80,000. All category tax caps and rates may be adjusted annually by no more than 2.55% by the commission. Of the revenue collected from category taxes, 60% is deposited in the Hazardous Waste Remedial Fund and 40% is deposited in the Hazardous Waste Fund.

The substitute also requires that 60% of the revenue collected from the current hazardous waste generator and land disposal fees be deposited in the Hazardous Waste Remedial Fund and 40% be deposited in the Hazardous Waste Fund. The Department of Natural Resources will request annually an appropriation of at least $1 million of general revenue for deposit in the Hazardous Waste Remedial Fund.

Further, the substitute establishes an annual hazardous waste generator registration fee of $100, to be deposited in the Hazardous Waste Fund. The current $100 per vehicle hazardous waste transporter fee is replaced with an annual application fee and a use fee based upon vehicle weight, mileage, or both. The fees are set to generate a total of $600,000 per year. Railroads transporting hazardous substances pay an annual transporter fee of $350. Revenues from transporter fees are deposited in the Hazardous Waste Fund.

Anyone constructing, altering, or operating a resource recovery facility must apply for certification from the department and pay a fee of no more than $500 for facilities only recovering on-site waste, or a fee of no more than $1,000 for facilities recovering off-site waste. Revenue from these fees is deposited in the Hazardous Waste Fund.

Expenditures for hazardous substance emergency responses are made from the Hazardous Waste Fund rather than the Hazardous Waste Remedial Fund. The department is authorized to include overhead costs for emergency responses when determining reimbursement required for emergency response service. Expenditures for voluntary cleanup oversight are made from the Hazardous Waste Remedial Fund rather than the Hazardous Waste Fund. The department is also authorized to oversee and recover costs for corrective actions at regulated facilities.

FISCAL NOTE: Estimated Net Cost to General Revenue Fund of $0 in FY 2001, $1,335,209 in FY 2002, and $1,000,000 in FY 2003. Estimated Net Effect on Dry Cleaning Environmental Response Trust Fund of $0 in FY 2001, an income of $1,050,480 to $1,365,998 in FY 2002, and a cost of $1,681,516 to an income of $844,680 in FY 2003. Income to Hazardous Waste Fund of $2,275,564 in FY 2001, $2,521,256 in FY 2002, and $2,563,689 in FY 2003. Estimated Net Income to Hazardous Waste Remedial Fund of $52,667 in FY 2001, $1,087,050 in FY 2002, and $1,089,986 in FY 2003. In FY 2001, certain fee increases are prorated and could vary depending on timing of collections. Cost to Highway Fund of $4,000 in FY 2001, FY 2002, and FY 2003.

PROPONENTS: Supporters say that currently, there is a severe shortfall in funding for remediation work and proper management of hazardous waste. The substitute's provisions are the product of a joint interim committee and extensive negotiations between the state and the regulated community. The public, waste generators, and waste transporters all provide a portion of the needed revenue. The substitute also provides funds to assist dry cleaners with remediation work at active and abandoned sites.

Testifying for the bill were Senator Maxwell; Department of Natural Resources; Associated Industries of Missouri; Lone Star Alternative Fuels; Department of Health; and Missouri Dry Cleaners Coalition.

OPPONENTS: There was no opposition voiced to the committee.

Terry Finger, Senior Legislative Analyst