BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 513 (Frazier) - Tire recycling program: rubberized asphalt.
Amended: August 13, 2013 Policy Vote: EQ 8-1
Urgency: No Mandate: No
Hearing Date: August 19, 2013 Consultant:
Marie Liu
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 513 would appropriate $10 million to the
Department of Resources Recycling and Recovery (CalRecycle) to
award grants to the state and local governments for the use of
rubberized asphalt concrete (RAC).
Fiscal Impact:
Ongoing costs of approximately $350,000 annually for 3.5
PYs from the California Tire Recycling Management Fund for
CalRecycle for the administration of the new RAC grant
program.
Annual appropriation of $10 million from the California
Tire Recycling Management Fund beginning FY 2014-15 through
FY 2018-19 to the grant program.
Background: The California Tire Recycling Act requires
CalRecycle to manage and regulate waste tires within the state
and requires the collection of a tire fee on each new tire
purchased in the state. Of the $1.75 fee per tire, $1 is
deposited into the Tire Recycling Management Fund for oversight,
enforcement, and market development grants related to waste tire
management and recycling. The fee is scheduled to be reduced to
$0.75 per tire on January 1, 2015.
CalRecycle is required to have a five-year plan, which is
updated every two years, that establishes goals and priorities
for the waste tire program. The current five-year plan includes
$3 million in grants for the use of RAC. While this program has
been oversubscribed, CalRecycle also has received many of the
awarded money back for projects that did not go forward. The
current RAC program requires a match from the grantee.
Proposed Law: This bill would require CalRecycle to award grants
AB 513 (Frazier)
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to local governments for the funding of public works projects
that utilize rubberized asphalt concrete and to state and local
governments for the funding of disability access projects at
parks and bikeways that utilize rubberized asphalt concrete. The
grant rate must be at least $2 for every 12 pounds of crumb
rubber used, though the rate may be adjusted higher or lower as
CalRecycle sees appropriate.
This bill appropriates $10 million annually from the California
Tire Recycling Management Fund for this purpose from FY 2014-15
until FY 2018-19.
This bill's provisions would sunset on June 30, 2019.
Related Legislation: AB 8 (Perea) and SB 11 (Pavley) extends the
collection of the $1.75 per tire fee until January 1, 2024.
Staff Comments: The Tire Recycling Management Fund currently has
a projected balance of over $30 million and is scheduled to
receive repayment of a General Fund loan of $27 million plus $5
million in interest at the end of FY 2016-17.
However, current program expenditures exceed revenues by
approximately $3 million a year, which is slowly decreasing the
reserve. Spending of the reserve will dramatically speed up
should the $1.75 tire fee sunset and revert to $0.75 in 2015.
Staff notes that there will be insufficient revenue in the Tire
Recycling Management Fund fulfill the appropriation in this
bill, even presuming the extension of the $1.75 fee. Assuming
the fee extension, over the next five years, the fund will have
a total reserve of approximately $62 million, of which $15
million will be needed to cover the deficit between existing
expenditures and revenues, leaving $47 million for other
purposes. However, this bill would appropriate $50 million over
five years, exceeding the available reserve and necessitating
program cutbacks at CalRecycle no later than FY 2018-19.