BILL ANALYSIS Ó AB 794 Page 1 Date of Hearing: May 18, 2011 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 794 (Wieckowski) - As Amended: May 3, 2011 Policy Committee: JudiciaryVote:9-0 Natural Resources 9-0 Urgency: No State Mandated Local Program: No Reimbursable: No SUMMARY This bill strengthens the ability of the Department of Resources Recycling and Recovery (Calrecycle) to identify and prosecute fraudulent electronic waste recycling claims. Specifically, this bill: 1)Authorizes Calrecycle to impose a civil penalty up to $25,000, per violation, against a person who makes a false statement or representation in a document filed for purposes of compliance with the Electronic Recycling Act and who has not made a verifiable and reasonable effort to determine the source of the electronic waste. 2)Authorizes Calrecycle to revoke or deny renewal of an electronic waste collector or recycler application for an individual who makes false statements or representations, as described above. 3)Prohibits Calrecycle from making an electronic waste recycling payment for electronic waste used in another state and then brought into California. 4)Requires Calrecycle to pay an electronic waste collector or recycler upon completion of its review of a payment claim. 5)Allows Cal Recycle to conduct audits of electronic waste collectors, recyclers and manufacturers receiving electronic waste recovery payment and to recover payments that Calrecycle finds were made improperly. 6)Allows an electronic waste recycler to contest a denial or AB 794 Page 2 adjustment of a payment claim by filing an administrative appeal within 30 days of the notice of denial or adjustment. FISCAL EFFECT 1) One-time costs to Calrecycle in 2011-12, ranging from $50,000 to $150,000, to conduct a rulemaking procedure to establish a framework to implement and regulate Calrecycle civil penalty authority. (Electronic Waste and Recycling Recovery Account (EWRRA).) 2) Ongoing annual costs to Calrecycle starting in 2012-13, ranging from $500,000 to $725,000, equivalent to four to five positions, to investigate potentially fraudulent activity, assess and collect penalties, hear appeals and participate in litigation. (EWRRA.) 3) Annual increased civil penalty revenue to Calrecycle, starting in 2012-13, of an unknown amount but potentially in the low hundred thousands of dollars, available to Calrecycle upon appropriation. (EWWRRA.) COMMENTS 1)Rationale. The author intends this bill to address problems with fraud the program discussed during an informational hearing held in the fall of 2010 and to codify Calrecycle's regulatory practices to implement the act. 2)Background . The Electronic Waste Act intends to provide a cost-free and convenient means for consumers to return, recycle, and ensure the safe and environmentally-sound disposal of a video display device containing a screen greater than four diagonal inches. Such devices are known as covered electronic devices and, when discarded, as covered electronic waste. Upon purchase of a new or refurbished covered electronic device, a consumer pays a recycling fee of $6 to $10 for each device, the amount depending on screen size. Fee revenue pays electronic waste collectors and recyclers for the cost of collecting and recycling electronic waste generated in the state. According to Calrecycle, between 2% and 12% of payment claims are denied each year, usually because of fraudulent information regarding the source of the e-waste. 3)Related Legislation . AB 549 (Carter), pending before this AB 794 Page 3 committee, codifies electronic waste regulations and practices issued and employed Calrecycle. 4)Support. This bill is supported by Californians Against Waste. 5)There is no formal opposition registered to this bill. Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081