BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair AB 794 (Wieckowski) Hearing Date: 08/15/2011 Amended: 08/15/2011 Consultant: Brendan McCarthy Policy Vote: EQ 6-0 _________________________________________________________________ ____ BILL SUMMARY: AB 794 makes several changes to the laws governing the recycling of electronic waste, to ensure that only eligible electronic waste is eligible for incentive payments. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2011-12 2012-13 2013-14 Fund Developing regulations $750 $750 $750 Special * and enforcement * Electronic Waste and Recycling Recovery Account. _________________________________________________________________ ____ STAFF COMMENTS: This bill meets the criteria for referral to the Suspense File. Under current law, certain "covered electronic devices" are included in the state's electronic waste recycling program. Generally, covered electronic devices are those that have a screen larger than four inches. When a consumer purchases a covered electronic device, he or she pays a fee from $6 to $10 per device. Revenues from this fee are used to support companies that collect and recycle these devices. Only covered electronic devices that were purchased and then discarded in California are eligible for payment. The program is overseen by the Department of Resources Recovery and Recycling (Department). In recent years, the Department has rejected about 5 percent of claims for recycling payments for non-compliance with program requirements, including fraudulent information about the sources of electronic waste. AB 794 makes several changes to the laws governing the AB 794 (Wieckowski) Page 1 electronic waste recycling program, with the intent of ensuring that recycling payments are only paid for covered electronic devices that are truly eligible for payment-that is, covered electronic waste that was generated in California. Specifically, the bill authorizes the Department to administratively impose civil penalties up to $25,000 on a person who makes a false statement or representation in any document used to comply with program requirements. However, the bill also provides that a person is not liable for civil penalties for making a false representation if he or she made verifiable and reasonable efforts to determine the source of electronic waste. The bill authorizes the Department to deny or revoke an application from a collector or recycler that makes a false statement in an application or has a history of operating in conflict with the program's requirements. The bill authorizes the Department to conduct audits to ensure compliance with program requirements. The bill creates an appeal process for recyclers that wish to contest the denial of a payment by the Department. Many of the requirements in the bill have been incorporated into the regulations governing the program. However, by explicitly increasing the Department's authority and responsibility to enforce these program requirements, the bill will impose additional costs on the Department. The Department indicates that it will need additional staff, at a cost of about $750,000 per year to implement the requirements of the bill. By improving the Department's ability to prevent fraudulent claims, the bill may reduce program expenditures in the long-run. The extent of this impact is unknown. AB 960 (B. Lowenthal) requires exporters of electronic waste or covered electronic devices to demonstrate that the electronic waste will be handled in compliance with local laws where the waste is imported. That bill is on this committee's Suspense File. AB 549 (Carter) requires that recyclers demonstrate that a covered electronic device for which a recycling payment is claimed was used in California. That bill is in the Environmental Quality Committee. AB 794 (Wieckowski) Page 2