Legislation sought to fix fund for Waste Management

During the 2010 Legislature, the Department of Environmental Quality will seek legislation aimed at providing a permanent fix to a dwindling fund that pays for oversight of waste management in the state.

The fund, the Environmental Quality Restricted Account or EQRA – an account funded by waste disposal fees, is financially strapped. The recession has taken a toll on waste disposal so revenues going into the fund have dwindled. In addition, $400,000 in the EQRA each year is provided to the General Fund while other money has been used to cover the state’s legal opposition to high-level nuclear waste. All of this has put the fund in financial jeopardy.

Sen. Curt Bramble (R-Provo) and Rep. Ronda Menlove (R-Garland) plan to sponsor a bill that puts into place key compromising components that would keep the fund solvent in Fiscal Year 2011 and beyond. Specifically, it would hike waste disposal fees – to be capped on the amount of excess revenue – but in exchange, guarantee a “hands off” approach by making sure the $400,000 annual appropriation into the state’s General Fund remains in the EQRA.

“We see this as a compromise,” said Amanda Smith, executive director of DEQ. “By raising fees, disposal companies and municipalities will feel some pain but the money in the fund will be used solely for waste management. The Department will need to make adjustments and some cuts as well. The other solution is to ask the Legislature for General Fund monies to keep us solvent. This solution seems less painful.”

The problem didn’t happen overnight.

When the EQRA was put in statute in 1996 its intent was simple: the revenues from disposal fees paid by the operators of commercial solid, hazardous, radioactive waste facilities and municipal landfills would pay for the regulatory oversight.

Over the years, the EQRA has fluctuated with the ups and downs of the disposal business. It has gone from nearly $6 million in 2006 to under $4 million in 2008. At the end of Fiscal Year 09, the fund balance was down to $30,000, with another $1 million shortfall in revenues than anticipated. As a short-term fix, DEQ scraped together enough money from other accounts to balance the account in 2010.

Without additional funding, the account faces dire financial straits.

“We began addressing this problem as far back as last year when we realized if we continued on the same financial course the EQRA would be an insolvent fund,” said Bill Sinclair, deputy director of DEQ.

Since May, Sinclair, along with Division Directors, has met with key stakeholders to discuss the problem. Stakeholders included municipal landfill operators, commercial hazardous waste companies like Clean Harbors and Radioactive Waste Disposal Giant EnergySolutions. It also included the Tooele County Commission, state lawmakers and representatives of the Governor’s Office.

After months of meetings, stakeholders came up with an “Agreements in Principle” that would set the stage for upcoming legislation in 2010.

In summary, the legislation would address future shortfalls in the following ways:

Keep the $400,000 in the account that has historically been allocated to the General Fund;
Move fee adjustments from a statutory to a fee schedule basis;
Increase disposal fees for FY2011;
Cap the amount of excess revenue in the fund; and
Provide the Governor and Legislature an annual report of the status of the fund.

“I think this spreads the pain,” Sinclair said. “It makes for an equitable disbursement of increases whereby everybody has to give a little.”