BILL ANALYSIS Ó
AB 794
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Date of Hearing: April 4, 2011
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 794 (Wieckowski)- As Introduced: February 17, 2011
SUBJECT : Solid waste: hazardous electronic waste
SUMMARY : Imposes civil liability against a covered electronic
waste (CEW) recycler or collector who makes a false statement or
representation for purposes of compliance with the Electronic
Waste Recycling Act (Act). Codifies regulations authorizing the
Department of Resources Recycling and Recovery (CalRecycle) to
conduct reviews and audits related to the operations of CEW
recyclers and collectors.
EXISTING LAW :
1)Establishes the Act for the purpose of providing a cost free
and convenient means for consumers to return, recycle, and
ensure the safe and environmentally-sound disposal of covered
electronic devices (CED). A CED is a video display device
containing a screen greater than four inches, measured
diagonally. CED that is discarded is considered CEW.
2)Requires a consumer to pay a CEW recycling fee upon the
purchase of a new or refurbished CED. The CEW recycling fee
ranges from $6 to $10 for each CED depending on the screen
size and is used primarily to pay CEW collectors and
recyclers.
3)Provides payment to CEW collectors and recyclers for costs
associated with collecting and recycling CEW that has been
generated in the state. Regulations expressly prohibit a CEW
collector or recycler from requesting payments for
non-California CEW. CEW owned by a person in California but
used entirely outside of the state is not eligible for
payment.
4)Requires, pursuant to regulations, a CEW collector to make
reasonable efforts to determine if CEW it collects is from
California or non-California sources. These reasonable
efforts include:
a) Posting signs asking for California sources.
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b) Conducting spot checks and/or surveys.
c) Checking for a valid California identification of a
person, a California license plate on a vehicle, and/or a
bill of lading showing a California origin.
d) Requiring additional documentation from California
sources or collectors delivering large numbers of CEW.
e) Instituting measures to prevent CEW from being
dropped-off anonymously or illegally disposed at the
approved collector's facilities or operations.
5)Requires, pursuant to regulations, a CEW recycler to ensure
that recycling payments are not claimed for non-California
source materials.
6)Requires, pursuant to regulations, CalRecycle to review
payment claims made by CEW collectors and recyclers and
determine if a payment is due under the Act. CalRecycle may
deny or adjust payment for an incomplete or deficient payment
claim.
7)Allows, pursuant to regulations, CalRecycle to conduct an
audit of CEW collectors and recyclers to determine compliance
with the Act. If a CEW collector or recycler fails to provide
reasonable access for audits, CalRecycle may revoke the
collectors or recyclers approval to participate in the payment
program and deny current and future claims for payment.
THIS BILL :
1)Allows CalRecycle to pay a CEW collector or recycler if the
CEW is generated by a person who either used the CED while
located in this state or used the CED in another state and
subsequently relocated to this state.
2)Requires CalRecycle to pay a CEW collector or recycler upon
completion of its review of a payment claim. Allows
CalRecycle to examine a payment claim for a period not to
exceed 90 days to validate completeness, accuracy,
truthfulness, and compliance with applicable laws and
regulations.
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3)Allows Cal Recycle to conduct audits of CEW collectors and
recyclers to determine whether recovery or recycling payments
are being paid by CalRecycle according to the requirements of
the Act. CalRecycle may collect and recover any moneys
improperly paid with interest.
4)Allows a CEW recycler to contest a denial or adjustment of a
payment claim made by CalRecycle by filing an administrative
appeal within 30 days of the notice of denial or adjustment.
5)Authorizes civil liability in an amount of up to $25,000 per
violation, which may be imposed administratively, against any
person, including a CEW collector or recycler, who makes a
false statement or representation in any document used for
purposes of compliance with the Act. CalRecycle may also
revoke the approval or deny the renewal application of a CEW
collector or recycler who wishes to participate in the Act's
program if he/she (1) makes a false statement or
representation in a document used for purposes of compliance
with the Act or (2) has a history demonstrating a pattern of
operation in conflict with the requirements of the Act.
FISCAL EFFECT : Unknown
COMMENTS :
1)Background. CEW collectors under the Act provide a free and
convenient system for collecting, consolidating, and
transporting CEW generated in the state. CEW collectors then
deliver the waste to CEW recyclers who receive, process, and
recycle the CEW. The CEW collectors and recyclers submit
payment claims to CalRecycle for compensation. CalRecycle
reviews the claims for compliance with the Act and, if
appropriate, makes payments to the CEW collectors and
recyclers.
Since January 2005, approximately 965 million pounds of
claimed CEW have been recycled and over $420 million in
payments have been made to CEW collectors and recyclers. The
Act has created jobs and fostered California's electronic
waste and recycling infrastructure with approximately 600
approved CEW collectors and 60 approved recyclers throughout
the state. The state's CEW infrastructure also recovers
substantial quantities of miscellaneous electronic waste not
covered by the CEW payment system.
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2)Problems with Non-Compliance and Fraud. CalRecycle has
annually denied between 2 percent and 12 percent of submitted
payment claims because of non-compliance or significantly
inconsistent (and possibly fraudulent) documentation. Since
2005, approximately $20 million in payment claims have been
denied. In addition, some believe that millions of dollars
have been paid out for fraudulent claims that were undetected
by the state.
A major issue with fraud involves electronic waste that is
brought in from out of state. The Act only allows payment for
CEW generated in California. Regulations prohibit payment for
CEW owned by a person in California but used entirely outside
of the state. However, some CEW collectors and recyclers
seek payment under the Act for out of state electronic waste
by submitting fraudulent documents claiming that the waste was
generated in California. CalRecycle reviews payment claims to
ensure compliance under the Act and to prevent fraud. As part
of this review, CalRecycle conducts spot-checking, which
involves contacting the sources of the CEW listed on the
payment claim. Under regulations, CalRecycle can also conduct
audits to detect fraud.
The bill codifies CalRecycle's review and audit regulations.
Codifying these regulations will prevent any legal challenge
against the validity of CalRecycle's authority to conduct
reviews and audits to detect fraud and malfeasance.
The bill also provides CalRecycle with significant
administrative authority to punish and deter fraud by allowing
CalRecycle to impose up to $25,000 in fines per violation
against a CEW collector or recycler who makes a false
statement in a document submitted pursuant to the Act.
Additionally, the bill authorizes CalRecycle to exclude a
collector or recycler from the CEW program who has committed
fraud or has a history demonstrating malfeasance under the
Act.
3)Suggested Amendments. The author and committee may wish to
consider amendments:
a) Clarifying that the Act does not apply to CED used
entirely outside of the state. The bill currently allows
payment if the CEW is generated by a person who used the
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CED in another state and subsequently relocated to this
state. This provision is broader than existing law and
could lead to payments for large amounts of out of state
electronic waste.
b) Exempting a CEW collector or recycler from civil
liability if he/she can demonstrate that reasonable efforts
were made to determine that the CEW it collected was from
California sources. Existing regulations contain this
"reasonable efforts" requirement.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916)
319-2092