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
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            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
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            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