6 CCR 1007-3-8.70 - Basis and Purpose

These amendments to 6 CCR 1007-3, Part 262 and Part 100 are made pursuant to the authority granted to the Solid and Hazardous Waste Commission in § § 25-15-302(2) and (3.5), C.R.S.

Amendments to Hazardous Waste Fees

After three years under the present hazardous waste fee structure, the Department has determined that an increase in fees is necessary beginning in State Fiscal Year 2010, which begins on July 1, 2009. § 25-15-301.5, C.R.S., provides general directives for implementation of the hazardous waste regulatory program. These directives include implementing a hazardous waste program that a) maintains program authorization by the U.S. EPA, b) promotes a community ethic to reduce or eliminate waste problems, c) is credible and accountable to industry and the public, d) is innovative and cost-effective, and e) protects the environmental quality of life for impacted residents of the state. § 25-15-302(2), C.R.S., provides guidance for future fee adjustments by the Solid and Hazardous Waste Commission. This guidance includes setting the fees such that the revenue generated by each fee approximates the actual reasonable program costs attributable to the facilities paying the fee.

The Department is authorized by the U.S. EPA to operate the hazardous waste regulatory program in Colorado in lieu of the federal government. One of the key criteria evaluated by the U.S. EPA in authorizing the state program is resources, both in terms of funding and in terms of qualified personnel. Without an increase in fee revenues, the Department has determined that it will not be able to operate an adequate program beginning in State Fiscal Year 2010 and would be in danger of losing program authorization.

The purpose of these amendments is to implement a balanced increase in hazardous waste program fees that the Department expects will provide adequate funding for the hazardous waste program for a period of approximately two years. The adjusted fees are expected to increase the revenue from fees to the hazardous waste program by approximately 15% in state fiscal years 2010 and 2011. When the funding provided by U.S. EPA is considered, the fee changes are expected to increase funds available to operate the hazardous waste program by approximately 11%. This 15% fee increase has been discussed and agreed to by a group of key stakeholders convened by the Department. The stakeholder group included the two largest treatment, storage, and disposal facilities in Colorado, one of the largest hourly fee payers, and several important Large Quantity Generators and Small Quantity Generators of hazardous waste. This group met three times in January and February, 2009, and discussed many aspects of the Department's Hazardous Waste Program and its budget and finances. In the three previous adjustments to this fee structure the Department proposed adjustments that would cover anticipated funding needs for the following three years rather than two. In discussion with the stakeholder group it was agreed that, given the current economic recession, proposing adjustments to cover a 2-year period rather than three was appropriate.

Over the next two years, Department costs are anticipated to rise about 3% per year, or 6% over the 2-year period of this fee increase. In addition, over this timeframe, the EPA hazardous waste grant is anticipated to remain the same, as it has for many years. Therefore, as the EPA grant represents about one-third of program funding, the fee revenue must cover inflationary increases on those items paid for by the EPA grant. This represents about another 3% increase over the 2-year period. On top of these cost increases is a one-time $200,000 upgrade to our databases and data management system. This represents another 4% increase that is needed over the 2-year period. Lastly, because of the very tough economic recession, we anticipate a decrease in the number of fee-paying businesses in Colorado. Our staff is projected to stay at about the current levels over the next two years so the drop in the number of fee payers must be offset by further increases in the fee amounts. This accounts for the remainder, or about 2%, of the 15% overall fee increase. It is worth noting that this 15% fee increase represents about a 7.5%/yr fee increase over its projected two-year life expectancy. This is significantly less than the last two hazardous waste fee increases which have averaged about an additional 10%/yr over the last six years.

It is also important to note that the proposed fee increase is not a flat 15% fee increase across the board. Some fee components have been increased more than 15%, some less. The reason for the different fee increase amounts is that we have tried to adjust each fee component to more closely align with the Department's investment of time and effort in activities related to that component, as is asked for by § 25-15-302(2), C.R.S. This is explained more fully in the following sections.

The amendments being adopted at this time include the following:

a) General: A few non-substantive clarifications and corrections are being incorporated into Part 100 and Part 262. Substantive changes are explained in more detail below.
b) Amendment of Part 262: Section 262.13 of Part 262 is being amended to:
1) Raise the annual fee for Conditionally Exempt Small Quantity Generators (CESQGs) that generate waste codes F001, F002, F004, and F005 from $100/year to $200/year. The Department believes this 100% fee increase is justified for the following reasons:
a. The Department is investing an increasing amount of resources in ensuring that CESQGs comply with the regulations. The four waste codes listed in this regulation represent the most problematic and wide-spread contamination issues in Colorado. These are solvent wastes that are extremely toxic and extremely mobile in the environment. Therefore, the Department is obligated to carefully monitor generators of these waste codes to ensure that they stay in compliance and safely manage their wastes so that public health and the environment are adequately protected. At $200/year, the CESQG fee is being brought into close alignment with the LQG fee in terms of the fee revenue compared to the Department's investment of time and effort in this regulated sector.
b. This fee was instituted in 2007 and is now paid by about 1100 CESQGs in Colorado. Simply building a system to bill and collect this fee has proven to be a large undertaking with significant time and effort invested by Department staff. At a fee level of $100/year, too much of the fee went to paying for its collection and not enough went to program implementation. To resolve this problem, the fee needs to be significantly increased.
2) Raise the annual fee for Small Quantity Generators (SQGs) from $480/year to $625/year. The Department believes this 30% fee increase is justified because of the rapidly increasing time and effort investment the Department is making in this 720-facility regulated sector. Over the last several years, the Department has implemented an annual self-certification program for SQGs where each facility self-reports their compliance status. This allows the Department to effectively re-train each facility on the regulatory requirements each year. Similar programs in other states have an impressive record of improved compliance rates - our program is still too new to demonstrate this type of improved compliance. Self-certification programs are very resource intensive. The self-certifications must be followed up with a relatively high number (~100) of random inspections each year to ensure accurate and honest self-certifications and to evaluate how the program is working. This is about the same number of inspections the Department performed at SQGs each year before self-certification, but the administration of the self-certification program has added significant workload - preparation of certification forms and instruction booklets, follow-up with late filers, data entry, and data evaluation. Bringing the SQG fee up to $625 does not yet raise this fee to a level equivalent to the CESQG and LQG fee in terms of Department time and resources invested. However, in light of the poor economy and the fact that most SQGs are small businesses, the Department felt limiting the fee increase to 30% was appropriate at this time. Further adjustments attaining equity and parity can be made in the future.
3) Raise the annual fee for Large Quantity Generators (LQGs) from $3,050/year to $3,200/year. The Division believes this 5% fee increase is justified because the Department is not decreasing its efforts within the LQG sector. These facilities are the largest waste generators in Colorado and have the biggest potential effects on public health and the environment. We have invested a significant amount of resources in this sector over the last 10 years and have seen measurable improvement in LQG compliance rates. This, in turn, means that public health and the environment are safer. However, experience has shown that backing off our efforts in this sector will quickly result in an erosion of our compliance gains. The LQGs have historically paid a higher share of fee revenue because the Department has spent more time and effort on LQGs than we have SQGs and CESQGs. In the next few years, Department time with LQGs will remain essentially flat while efforts at SQGs and CESQGs will increase. Therefore, the proposed fee increase for LQGs is much less than either the SQG or CESQG increases.
c) Amendment of Part 100.3:
1) The Annual Fee Table at the end of Section 100.31 is being amended to include an overall 5% increase in TSD fees. This applies to both the volume fees and the minimum fees for all classes of facilities. The Division believes this 5% fee increase is appropriate. It is less than the increases being proposed for SQGs and LQGs, and it is less than the increase being proposed for the hourly fee rate. This is due to the fact that the Department is slowly decreasing its investment of time and effort in TSDs - all TSDs needing permits are permitted and our efforts are in permit maintenance; our inspection efforts at TSDs are driven by EPA requirements, but compliance rates have been high so extra time spent in enforcement has been low. Therefore, this lower fee increase keeps TSD fees in line with the other two major fee components (hourly fees and generator fees) in terms of revenue versus time and effort invested.
2) Section 100.32(a)(2) is being amended to clarify that document review and activity fees will apply to pre permit application meetings and review of documents beginning with the second meeting between the Department and the facility, regardless of whether the facility files a permit application, Corrective Action Plan, or other document listed in Part 100(a)(1). The Department tries to get contaminated facilities to enter our regulatory process through a Corrective Action Plan (CAP) because that is the most efficient mechanism for the facility and for our staff. However, in many cases, after investing quite a bit of time meeting with a facility and explaining the CAP document and process, the facility will not submit a CAP and the Department must resort to alternative enforcement mechanisms. This makes our initial investment of time unrecoverable. To alleviate this problem somewhat, the proposed regulatory change states that we will begin charging hourly fee beginning with the second meeting, rather than the third.
3) Section 100.32(b) is being amended to change the hourly rate for the document review and activity fee from $135/hour to $150/hour - an 11% increase. While this rate is high, the Department believes it is justified for three reasons:
a. It is a "loaded" fee that recoups the cost of not only the technical staff performing the review, but also the proportional cost of direct management, direct administrative support, direct IT support, and indirect Department support;
b. The Department has documented that the "loaded" cost is actually $152/hour for 2010, slightly more than the proposed $150/hour; and
c. The document review and activity fee was originally implemented in 1991 at a "loaded" rate of $85/hour. Inflating $85/hour through 2010 results in $162/hour, again more than the proposed $150/hour.
4) Section 100.33 is being amended to raise the fee charged for certain notifications from $100 to $120. This fee was added in 2006 and is intended to be a cost recovery fee for Department staff time spent processing the new or revised notifications. It is similar to processing fees charged by other Departmental programs. Similar to item 2 above, the main need for this fee increase is to continue to fully cover our transaction costs. This fee is only charged for the following types of notifications:
a. Notifications where a facility is lowering its generator status; and
b. New notifications for SQGs and LQGs, but not for CESQGs.

Statement of Basis and Purpose - Rulemaking Hearing of August 18, 2009


6 CCR 1007-3-8.70
37 CR 24, December 25, 2014, effective 3/2/2015 38 CR 11, June 10, 2015, effective 6/30/2015 39 CR 05, March 10, 2016, effective 3/30/2016 39 CR 11, June 10, 2016, effective 6/30/2016 40 CR 06, March 25, 2017, effective 4/14/2017 40 CR 11, June 10, 2017, effective 6/30/2017 40 CR 21, November 10, 2017, effective 11/30/2017 41 CR 06, March 25, 2018, effective 4/14/2018 41 CR 11, June 10, 2018, effective 6/30/2018 41 CR 24, December 25, 2018, effective 1/14/2019 42 CR 06, March 25, 2019, effective 4/14/2019 42 CR 06, March 25, 2019, effective 5/30/2019 42 CR 11, June 10, 2019, effective 6/30/2019 43 CR 12, June 25, 2020, effective 7/15/2020 44 CR 06, March 25, 2021, effective 4/14/2021 44 CR 11, June 10, 2021, effective 6/30/2021 44 CR 24, December 25, 2021, effective 1/14/2022 45 CR 11, June 10, 2022, effective 6/30/2022 45 CR 17, September 10, 2022, effective 9/10/2022 45 CR 17, September 10, 2022, effective 9/30/2022 45 CR 23, December 10, 2022, effective 1/30/2023

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