Environment Committee Alert

Contact: Darren Suarez
October 25, 2011

Hazardous Waste Regulatory Fee Changes

Many hazardous waste generators have expressed concern upon learning that the Department of Environmental Conservation (DEC) will be issuing two hazardous waste generation invoices during the 2011 calendar year.

The Business Council after some investigation agrees with the DEC although two invoices will be issued in 2011, that they cover separate annual periods (2010, 2011). The first invoice will be based on the average hazardous waste generated in 2007, 2008, and 2009. The billing year on that invoice will indicate “0789.” The second invoice will be based on actual amounts generated in 2010 and will cover the 2011 annual period.

Additionally, the Business Council strongly supports the DEC’s determination not to assess any fees for generators who did not generate any waste during calendar year 2010. Under some interpretations of the current law waste generators, who generated waste in 2007, 2008, or 2009 would have been assessed a few in 2010 even if they did not generate waste in 2010.

Discussions with DEC

Due to a number of factors many companies were concerned about the receipt of two hazardous waste bills in one calendar. The Business Council immediately upon hearing of the concerns our members address this issues with the DEC. Here you will find a letter that the DEC drafted as a result of our numerous conversations. The Business Council believes that this letter represents a fair and accurate depiction of the current situation.

The letter explains that, “no regulated entity is being billed twice for a single annual period” and acknowledges that much of the confusion stems from a memo that was “not the model of clarity.” Specifically, the DEC Division of Management & Budget Services states memo stated that, “the new law requires a one-time transition invoice.” The new law did not require a transitional invoice, so much as it required for one year the annual invoice should be based upon an alternative means of calculation.

The DEC at the conclusion of the letter acknowledges that there is an inherit incongruity to “requiring generators who did not generate any waste during calendar year 2010 to pay an annual fee based exclusively upon activity in earlier years.”

"Accordingly, DEC has determined that any generator who did generate any hazardous waste during 2010 will not be subject to a transitional charge based merely upon waste generated in the prior three years. In other words, generators which did not create any waste during calendar year 2010 will not be assessed any fees for that year.”

Chapter 99 of the Laws of 2010

As part of a financing package to address the state parks, Chapter 99 of the Laws of 2010 restructured the hazardous waste fees increasing assessments on the state’s largest hazardous waste generators, and resulting in a net reduction of assessments for others. Overall, the proposal increased assessments by 22 percent, or about $2 million, with the additional funds dedicated to the “Environmental Protection Fund.” These provisions are in S.7988/A.11308 (provisions start on page 25, line 19 of the bill text.)

Specifically, Chapter 99 of the Laws of 2010, did the following:

Chapter 99 of the Laws of 2010 Does Not Contain Specific Authorization for a Transition Invoice.

Nowhere in Chapter 99 of the Laws of 2010, is there an explicit authorization for the development of a transitional invoice. Neither the bill jacket nor the legislative memo infer a transitional invoice, the legislative transcripts nor the then Governor Paterson’s press release. In addition, analysis conducted by the Division of Budget, the Legislature and the Division of Budget does not reflect substantial additional revenue derived from a transition invoice.

The DEC has stated that the authorization for the one time transition invoice result from the provision contained in § 7 of Chapter 99 of the Laws of 2010.

§ 7. Subdivision 4 of section 72-0402 of the environmental conservation law, as added by chapter 471 of the laws of 1985 and renumbered  by chapter 62 of the laws of 1989, is amended to read as follows:

4. Bills  issued  for  annual  hazardous  waste program fees shall be [estimated bills] based [either: a. upon the  actual  activity  of  the  preceding  calendar  year,  as reported  to the department, or as adjusted by the department to reflect non-recurring events or reporting errors, or b. in those instances where actual activity cannot  be  determined  or where the status of a person subject to the provisions of this title has changed  since the issuance of the bill for the preceding year so that a different fee category is applicable, upon estimated  activity  for  the current  calendar  year,  as  determined  by the department] upon actual hazardous waste generated for the prior calendar year, as  demonstrated to the  department's satisfaction. During the first year of implementation of this subdivision, bills will be based on the average quantity of hazardous waste generated for the previous three calendar years.

Subdivision 4 of § 72-0402 amends the hazardous waste program fee from an annual estimated bill based upon generated hazardous waste of the prior calendar year, or as adjusted by the department; to a bill based upon actual hazardous waste generated for the prior calendar year. Chapter 99 of the Laws of 2010 contains a provision that stipulates the years bill will be calculated in a different manner. The effective date for this section is April 1, 2010.

Disposition of Revenue Collected by § 72-0402

Annual invoices are sent by the Department to all hazardous waste generators. Payments are sent to DEC. Of the revenue collected, 15% is transferred to the Environmental Protection Fund not to exceed $2.1 million, 71% is transferred to the Hazardous Waste Remedial Fund's Industry Fee Transfer Account, and the balance is used to fund other environmental quality program needs. The Hazardous Waste Remedial Fund's Industry Fee Transfer Account is used to pay 50 percent of the debt service associated with the 1986 Environmental Quality Bond Act (EQBA) bonds used for the remedial program.

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