BILL ANALYSIS Ó AB 1647 Page 1 Date of Hearing: April 23, 2012 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Wesley Chesbro, Chair AB 1647 (Gordon) - As Amended: April 16, 2012 SUBJECT : Solid waste: waste tires SUMMARY : Revises the hearing and enforcement process for waste tire facility and waste tire hauling violations. EXISTING LAW : 1)Requires, pursuant to the California Tire Recycling Act (Act), the Department of Resources Recycling and Recovery (CalRecycle) to administer a tire recycling program that promotes and develops alternatives to the landfill disposal of waste tires. The tire recycling program may include, among other things, grants, subsidies, and loans to businesses or other enterprises and public entities involved in activities that result in reduced landfill disposal or stockpiling of waste tires. Activities eligible for funding may include the manufacturing of products made from used tires such as rubberized asphalt and crash barriers. 2)Requires CalRecycle to adopt a five-year plan, which must be updated every two years, to establish goals and priorities for the tire recycling program. Every two years, CalRecycle is required to submit the adopted five-year plan to the Legislature. 3)The tire recycling program under the Act is funded by the California Tire Recycling Management Fund (Fund). The Fund is supported by the California tire fee, which is a $1.75 per tire charge imposed on a person who purchases a new tire. 4)Establishes an "administrative adjudication bill of rights," which specifies fundamental adjudicatory protections, including (in part) the right to an open hearing, the right to a written decision, the right to an unbiased decision maker, and the separation of adjudicatory from adversary functions. 5)Establishes a formal hearing process to determine whether a right, authority, license, or privilege should be revoked, suspended, limited, or conditioned. Requires that the process AB 1647 Page 2 be initiated by an accusation (a statement of charges) that allows the "respondent" to prepare a defense. Allows the respondent 15 days to request a hearing. Formal hearings are before an administrative law judge. 6)Establishes an informal hearing process for the following: a) A proceeding where there is no disputed issue of material fact. b) A proceeding where there is a disputed issue of material fact, if the matter is limited to: i) A monetary amount of not more than $1,000; ii) A disciplinary sanction against an employee that does not involve discharge from employment, demotion, or suspension of not more than five days; iii) A disciplinary sanction against a student that does not involve a expulsion from an academic institution or suspension for more than 10 days; or, iv) A disciplinary sanction against a licensee that does not involve an actual revocation of a license or an actual suspension of a license for more than five days, but clarifies that this provision does not preclude an agency from imposing a stayed revocation or a stayed suspension in an informal hearing. c) A preceding where, by regulation, the agency has authorized use of an informal hearing. d) A proceeding where an evidentiary hearing for determination of facts is not required by statute, but where the agency determines the federal or state Constitution may require a hearing. 7)Authorizes the presiding officer to deny the use of the informal hearing procedure or to convert an informal hearing to a formal hearing under specified circumstances. THIS BILL : 1)Authorizes CalRecycle to issue penalties of $1,000 to $10,000 AB 1647 Page 3 per day for violations at major tire facilities, and $500 to $5,000 per day at minor tire facilities. 2)Authorizes CalRecycle to revoke, suspend, or deny a waste tire facility permit, prior to holding a hearing, for up to three years if it determines that the permit was obtained by a material misrepresentation or failure to disclose relevant factual information, or if the operator, during the previous three years, has been issued a final order for, failed to comply with, or has been convicted of specified violations. 3)Authorizes CalRecycle to revoke, suspend, or deny a waste tire facility permit, prior to holding a hearing, for a period of up to five years for a chronic, recurring pattern of noncompliance, and for five years or greater for violations that result in a significant harm to human health or the environment. 4)Repeals the provision that authorizes CalRecycle to temporarily suspend a permit prior to a hearing if it determines that the action is necessary to prevent or mitigate an imminent or substantial endangerment to public health and safety or the environment. (Under this bill, all permits will be immediately suspended until an informal hearing takes place, or for the duration of the revocation or suspension if the operator waives the right to a hearing.) 5)Repeals the requirement that hearings relating to these provisions comply with the formal hearing process (see #5, above), and instead establishes informal hearing requirements as follows: a) Requires CalRecycle to notify the applicant or holder of the permit of the revocation, suspension, or denial and the effective date of the revocation, suspension, or denial, and to serve the person with a statement of issues; b) Upon receipt of a notice of defense, requires CalRecycle to, within 15 days, schedule a hearing before the director. Requires the hearing to take place "as soon as possible." c) Specifies that the revocation or suspension remain in effect until the hearing is completed and the director issues a decision. Requires the director to issue a AB 1647 Page 4 decision within 60 days of the hearing. 6)Authorizes CalRecycle to "serve an administrative accusation" to any person subject to civil liability. Specifies that the accusation inform the party that a hearing shall be conducted within 60 days of being served. Specifies that upon receipt of a notice of defense, CalRecycle schedule a hearing (within 15 days), and that the hearing be held "as soon as possible," unless the party waives the right to a hearing. Requires the director to issue a decision within 60 days of the hearing. (The 60-day requirement for the hearing appears to be a drafting oversight.) 7)Authorizes CalRecycle to revoke, suspend, or deny a waste and used tire hauler registration, prior to holding a hearing, for up to three years if it finds that the hauler commits more than three violations; if the violation poses an immediate threat of harm to public safety or the environment; if it shows a "repeating and recurring occurrence" or that the failure to comply may post a threat to public safety or the environment; or, if the hauler commits any misrepresentation or omission of a significant fact or other required information, as specified. 8)Authorizes CalRecycle to revoke, suspend, or deny a waste and used tire hauler registration, prior to holding a hearing, for three to five years, or may suspend, revoke, or deny a waste and used tire hauler registration permanently, under specified circumstances. 9)Requires CalRecycle to notify the hauler of the revocation, suspension, or denial of the permit and the effective date of the suspension and revocation and shall serve the hauler with a statement of issues. Upon receipt of a request for a hearing, CalRecycle shall, within 15 days, schedule a hearing before the director. Specifies that the hearing be held "as soon as possible." 10)Requires that the revocation or suspension remain in effect until a hearing is completed and the director issues a decision, which must be issued within 60 days. 11)Requires the hearings undertaken by CalRecycle to comply with the informal hearing process established by the Government Code (see #6 above) and expressly prohibits the use of the AB 1647 Page 5 formal hearing process. FISCAL EFFECT : Unknown COMMENTS : According to the author, tire recyclers and processors have been reporting an increasing number of waste tires that are being sent to unpermitted facilities. The tires are trucked to California ports, loaded onto cargo ships, and transported overseas. An investigative report by Today/Tonight in Australia found that containers of waste tires are shipped to Vietnam, offloaded to trucks, and then transported to China (in violation of Chinese law) where they are burned for fuel. The transport and burning of these tires generates significant greenhouse gases and other air emissions. Legitimate California-based tire recyclers, processors, and tire-derived product (TDP) manufacturers indicate that they have noticed as much as a 50 percent drop in waste tire feedstock. Some have expressed concern that they may be unable to stay in business if they have to compete with illegal tire baling operations. In response to these concerns, last month CalRecycle released a bulletin and held a workshop to discuss the permitting, storage, and hauling requirements applicable to baled waste tires. CalRecycle states that, "waste tire baling is becoming more common because it allows for the efficient storing and transporting of waste tires." Regulations define baled tires as "whole or altered waste tires that have been compressed and then secured with a binding material for the purpose of reducing their volume." Baled tires must be managed as waste tires. The bulletin clarifies that waste tire baling facilities are waste tire facilities (not collection facilities) and must be managed as such; baled tires are not tire derived product (TDP) and are not exempt from waste tire hauling requirements; common carrier exemptions may apply to loads of baled tires, but require an exemption letter from CalRecycle; transportation of baled tires may result in overweight containers; and, baled tires must be manifested. At the workshop, CalRecycle identified 13 "business practice" changes that they can make administratively to improve enforcement of waste tire hauling and storage requirements. The AB 1647 Page 6 workshop also included a discussion of "statutory options" that require legislative action. This bill implements two of the statutory changes identified by CalRecycle to streamline the enforcement process for violations of waste tire storage and hauling requirements. Under current law, hearings relating to the denial, revocation, or suspension of a waste tire facility permit or a waste tire hauler registration must go through the formal Office of Administrative Hearings process. According to CalRecycle, hearings are scheduled approximately six months after they are requested, allowing illegal facilities to continue to operate. This bill establishes an informal hearing process, with the director of CalRecycle acting as the presiding officer. Current law also specifies that a permit cannot be revoke, suspended, or denied prior to the hearing, except when necessary "to prevent or mitigate an imminent or substantial endangerment to the public health or safety or the environment." This bill allows CalRecycle to revoke, suspend, or deny a permit prior to a hearing in any case, as determined by the department. For waste tire hauling registrations, this bill expressly states that the revocation, suspension, or denial cannot be stayed pending the hearing. While a streamlined enforcement process may assist CalRecycle in stopping illegal baling operations, this bill is overly broad and may infringe on an accused violator's rights. In order to ensure that due process rights are protected, the committee may wish to amend the bill to make it consistent with the informal hearing process in place for solid waste facility permit violations (Sections 44305-44310 of the Public Resources Code). In order to ensure that the informal hearing process remains efficient, the committee may wish to amend the bill to require CalRecycle to schedule the hearing within a specific time frame. Specifically, the committee may wish to make the following changes: 1)Require CalRecycle to schedule the hearing within 60 days of receiving a notice of defense; 2)Reinstate the requirement that CalRecycle can only revoke, suspend, or deny a permit prior to a hearing when it determines that the action is necessary to prevent or mitigate an imminent or substantial endangerment to the public health AB 1647 Page 7 or safety or the environment; and, 3)Correct a drafting error on page 11, line 28, by replacing "permit" with "registration." REGISTERED SUPPORT / OPPOSITION : Support Ag Link, Inc. BAS Recycling, Inc. Californians Against Waste Lakin Tire West Northern California Recycling Association Opposition None on file Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916) 319-2092