Notice of Senate Passage of Substitute House Bill 1290

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SHB 1290, titled AN ACT Relating to reviews of voluntary cleanups, has been passed by the Senate. The Office of Financial Management has identified this bill as requiring a ten-year projection of increased cost to the taxpayers or affected fee payers.

Ten-year projection:

Fiscal Year		Expedited Voluntary Cleanup Recoveries or Fees
2020		$0
2021		388,000
2022		388,000
2023		388,000
2024		388,000
2025		388,000
2026		388,000
2027		388,000
2028		388,000
2029		388,000
Total:		$ 3,492,000

Sections 2(2) and 2(3) would require that Ecology collect all of its costs from customers requesting reviews in the expedited review process, authorize Ecology to waive review costs under both the standard and expedited review processes if the customer commits to remediating the contaminated real property for development of affordable housing, and clarify what elements may be included in a revenue model for the expedited review process (fees, cost recovery, or both). 

To calculate the cash receipt impacts that would result from the expedited review process and healthy housing remediation waiver requires Ecology to anticipate (1) the demand for the expedited review process; (2) when Ecology would initiate the expedited review process; (3) Ecology’s capacity to meet that demand; (4) the pace projects would move through the expedited review process; (5) the fee and/or cost recovery structure Ecology would use to collect its costs under the expedited review process; and (6) the number of projects in both the standard and expedited review processes receiving a waiver. 

UNIT COST OF PROJECTS REVIEWED UNDER THE EXPEDITED REVIEW PROCESS

For the purposes of this analysis, the following assumptions were used to estimate a unit cost of projects reviewed under the expedited review process. The unit cost would depend on the final fee and/or cost recovery structure and policies about how and when customers would pay. The structure would need to ensure that all costs of the expedited review process are collected. The structure could include single fees, multiple fees, or a combination of fees and cost recovery. That structure would be adopted in interpretive guidance and then rules.

Assumed number of new projects entering expedited review process each year = 12 projects. The final fee and/or cost recovery structure generated from these projects would need to be able to support the expedited review process.

Estimated total cost of supporting two cleanup project managers for twelve expedited review projects over one year = $423,000, including two Hydrogeologist 4s, associated program support, and Assistant Attorney General support.

Estimated average unit cost of projects reviewed under expedited review process = $423,000 / 12 projects = $35,250 per project. 

TOTAL CASH RECIEPTS TO NEW VCA EACH YEAR FROM THE EXPEDITED REVIEW PROCESS

Of those 12 projects, Ecology assumes the number of new projects entering the expedited review process each year receiving a healthy housing remediation project waiver = 1 project.

12 projects entering expedited review process – 1 project receiving healthy housing remediation waiver = 11 projects generating cash receipts.

11 projects generating cash receipts X $35,250 per unit cost = $387,750 deposited to the new Voluntary Cleanup Account. Fee revenue is estimated to begin in FY 2021.

Note: Reductions to cash receipts are not included in this analysis. Beginning in FY 2021, some VCP reviews that would have been conducted under the standard process would be conducted under the expedited review process, resulting in a reduction in cash receipts in the State Toxics Control Account for the standard process. In addition, some VCP reviews conducted under the standard and expedited review processes would receive healthy housing remediation waivers, resulting in a reduction in cash receipts in the State Toxics Control Account from reviews receiving waivers.

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