Amended in Assembly April 22, 2014

Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly BillNo. 1846


Introduced by Assembly Member Gordon

(Principal coauthor: Assembly Member Quirk)

February 19, 2014


An act to amend Sections 14538, 14539, 14591.2,begin delete 14594.5, and 14595.5end deletebegin insert and 14594.5end insert of, and to add Section 14515.2 to, the Public Resources Code, relating to beverage containers.

LEGISLATIVE COUNSEL’S DIGEST

AB 1846, as amended, Gordon. Beverage containers: enforcement.

The California Beverage Container Recycling and Litter Reduction Act requires a distributor of specified beverage containers to pay a redemption payment to the Department of Resources Recycling and Recovery for each beverage container sold or transferred, for deposit in the California Beverage Container Recycling Fund. The act requires the department to pay handling fees to supermarket sites, rural region recyclers, and nonprofit convenience zone recyclers for every beverage container redeemed by the certified recycling center.

Existing law prohibits a certified recycling center or processor from paying any refund values, processing payments, or administrative fees on, or making claims on, empty beverage containers that the certified recycling center or processor knew or should have known were coming from out of state, or from making claims on beverage containers that the certified recycling center or processor knew, or should have known, were received from a noncertified recycler.

The bill would extend these prohibitions to beverage containers that the certified recycling center or processor knew, or should have known,begin delete areend deletebegin insert wereend insert otherwise ineligible for redemption.

Existing law authorizes the department to take specified disciplinary actions against any party responsible for directing, contributing to, participating in, or otherwise influencing the operations of a certified or registered facility or programbegin insert under specified circumstancesend insert.

This bill would specify an additional disciplinary action, authorizing the departmentbegin insert under those circumstancesend insert to suspend or permanently revoke eligibility of a supermarket site, rural region recycler, or a nonprofit convenience zone recycler to receive handling fees at one or more of a certificate holder’s certified recycling centers.

Existing law imposes criminal and civil penalties for specified violations of the act, including as actions subject to criminal penalties, the redemption of out-of-state containers, as defined. Existing law generally authorizes the department to impose a civil penalty of up to $1,000 or $5,000 for each violation, but authorizes the department to assess a civil penalty of up to $10,000 per transaction, or an amount equal to 3 times the damages, plus costs, for a person who redeems, or assists in the redemption of, previously redeemed containers.

This bill would additionally authorize the department to assess a civil penalty of up to $10,000 per transaction or 3 times the damages, plus costs, upon a person who redeems, attempts to redeem, or aids in the redemption of, otherwise ineligible beverage containers, including, but not limited to, out-of-state containers and empty beverage container materials imported from out-of-state.

begin delete

Existing law prohibits a person, with intent to defraud, from performing specified actions relating to container redemption.

end delete
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This bill would instead prohibit a person from knowingly performing the specified actions, eliminating the element of intent to defraud, and thereby expanding the scope of a crime and imposing a state-mandated local program.

end delete
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The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end delete
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This bill would provide that no reimbursement is required by this act for a specified reason.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: begin deleteyes end deletebegin insertnoend insert.

The people of the State of California do enact as follows:

P3    1

SECTION 1.  

Section 14515.2 is added to the Public Resources
2Code
, to read:

3

14515.2.  

“Person” means any individual, corporation,
4operation, or entity, whether or not certified or registered pursuant
5to this division.

6

SEC. 2.  

Section 14538 of the Public Resources Code is
7amended to read:

8

14538.  

(a) (1) The department shall certify an operator of a
9recycling center pursuant to this section.

10(2) The department shall review whether an application for
11certification or renewal is complete within 30 working days of
12receipt, including compliance with subdivision (c). If the
13department deems an application complete, the department shall
14approve or deny the application no later than 60 calendar days
15after the date when the application was deemed complete.

16(b) The director shall adopt, by regulation, a procedure for the
17certification of recycling centers, including standards and
18requirements for certification. These regulations shall require that
19all information be submitted to the department under penalty of
20perjury. A recycling center shall meet all of the standards and
21requirements contained in the regulations for certification. The
22regulations shall require, but shall not be limited to requiring, that
23all of the following conditions be met for certification:

24(1) The operator of the recycling center demonstrates, to the
25satisfaction of the department, that the operator will operate in
26accordance with this division.

27(2) If one or more certified entities have operated at the same
28location within the past five years, the operations at the location
29of the recycling center exhibit, to the satisfaction of the department,
30a pattern of operation in compliance with the requirements of this
31division and regulations adopted pursuant to this division.

32(3) The operator of the recycling center notifies the department
33promptly of any material change in the nature of his or her
34operations that conflicts with information submitted in the
35operator’s application for certification.

36(c) (1) An applicant for certification as a recycling center, and
37a recycling center applying for renewal of a certification, shall
38complete the precertification training program required by this
P4    1subdivision and meet all other qualification requirements prescribed
2by the department, which may include, but are not limited to,
3requiring the applicant to obtain a passing score on an examination
4administered by the department.

5(2) The department may use staff or industry experts, or may
6seek expertise available in other state agencies, to provide the
7training program required by this subdivision, which shall include
8providing technical assistance to better prepare recycling centers
9for successful participation in this division, thereby reducing the
10potential for errors, fraud, or other activities that compromise the
11integrity of the implementation of this division.

12(d) A certified recycling center shall comply with all of the
13following requirements for operation:

14(1) The operator of the recycling center shall not pay a refund
15value for, or receive a refund value from any processor for, any
16food or drink packaging material or any beverage container or
17other product that does not have a refund value established pursuant
18to Section 14560.

19(2) The operator of a recycling center shall take actions that
20satisfy the department to prevent the payment of a refund value
21for any food or drink packaging material or any beverage container
22or other product that does not have a refund value established
23pursuant to Section 14560.

24(3) Unless exempted pursuant to subdivision (b) of Section
2514572, a certified recycling center shall accept, and pay at least
26the refund value for, all empty beverage containers, regardless of
27type.

28(4) A certified recycling center shall not pay any refund values,
29processing payments, or administrative fees to a noncertified
30recycler.

31(5) A certified recycling center shall not pay any refund values,
32processing payments, or administrative fees on empty beverage
33containers or other containers that the certified recycling center
34knew, or should have known, were coming into the state from out
35of the state, or are otherwise ineligible for redemption.

36(6) A certified recycling center shall not claim refund values,
37processing payments, or administrative fees on empty beverage
38containers that the certified recycling center knew, or should have
39known, were received from noncertified recyclers or on beverage
40containers that the certified recycling center knew, or should have
P5    1known, come from out of the state, or are otherwise ineligible for
2redemption.

3(7) A certified recycling center shall prepare and maintain the
4following documents involving empty beverage containers, as
5specified by the department by regulation:

6(A) Shipping reports that are required to be prepared by the
7recycling center, or that are required to be obtained from other
8recycling centers.

9(B) Consumer transaction receipts.

10(C) Consumer transaction logs.

11(D) Rejected container receipts on materials subject to this
12division.

13(E) Receipts for transactions with beverage manufacturers on
14materials subject to this division.

15(F) Receipts for transactions with beverage distributors on
16materials subject to this division.

17(G) Documents authorizing the recycling center to cancel empty
18beverage containers.

19(H) Weight tickets.

20(8) In addition to the requirements of paragraph (7), a certified
21recycling center shall cooperate with the department and make
22available its records of scrap transactions when the review of these
23records is necessary for an audit or investigation by the department.

24(e) The department may recover, in restitution pursuant to
25paragraph (5) of subdivision (c) of Section 14591.2, payments
26made from the fund to the certified recycling center pursuant to
27Section 14573.5 that are based on the documents specified in
28paragraph (7), that are not prepared or maintained in compliance
29with the department’s regulations, and that do not allow the
30department to verify claims for program payments.

31(f) The department may certify a recycling center that will
32operate less than 30 hours a week, as specified in paragraph (2) of
33subdivision (b) of Section 14571.

34

SEC. 3.  

Section 14539 of the Public Resources Code is
35amended to read:

36

14539.  

(a) (1) The department shall certify processors pursuant
37to this section.

38(2) The department shall review whether an application for
39certification or renewal is complete within 30 working days of
40receipt, including compliance with subdivision (c). If the
P6    1department deems an application complete, the department shall
2approve or deny the application no later than 60 calendar days
3after the date when the application was deemed complete.

4(b) The director shall adopt, by regulation, requirements and
5standards for certification. The regulations shall require, but shall
6not be limited to requiring, that all of the following conditions be
7met for certification:

8(1) The processor demonstrates to the satisfaction of the
9department that the processor will operate in accordance with this
10division.

11(2) If one or more certified entities have operated at the same
12location within the past five years, the operations at the location
13of the processor exhibit, to the satisfaction of the department, a
14pattern of operation in compliance with the requirements of this
15division and regulations adopted pursuant to this division.

16(3) The processor notifies the department promptly of any
17material change in the nature of the processor’s operations that
18conflicts with the information submitted in the operator’s
19application for certification.

20(c) (1) An applicant for certification as a processor and a
21processor applying for renewal of a certification shall complete
22the precertification training program required by this subdivision
23and meet all other qualification requirements prescribed by the
24department, which may include, but are not limited to, requiring
25the applicant to obtain a passing score on an examination
26administered by the department.

27(2) The department may use staff or industry experts, or may
28seek expertise available in other state agencies, to provide the
29training program required by this subdivision, which shall include
30providing technical assistance to better prepare processors for
31successful participation in this division, thereby reducing the
32potential for errors, fraud, or other activities which compromise
33the integrity of the implementation of this division.

34(d) A certified processor shall comply with all of the following
35requirements for operation:

36(1) The processor shall not pay a refund value for, or receive a
37refund value from the department for, any food or drink packaging
38material or any beverage container or other product that does not
39have a refund value established pursuant to Section 14560.

P7    1(2) The processor shall take those actions that satisfy the
2department to prevent the payment of a refund value for any food
3or drink packaging material or any beverage container or other
4product that does not have a refund value established pursuant to
5Section 14560.

6(3) Unless exempted pursuant to subdivision (b) of Section
714572, the processor shall accept, and pay at least the refund value
8for, all empty beverage containers, regardless of type, for which
9the processor is certified.

10(4) A processor shall not pay any refund values, processing
11payments, or administrative fees to a noncertified recycler. A
12processor may pay refund values, processing payments, or
13administrative fees to any entity that is identified by the department
14on its list of certified recycling centers.

15(5) A processor shall not pay any refund values, processing
16payments, or administrative fees on empty beverage containers or
17other containers that the processor knew, or should have known,
18were coming into the state from out of the state, or are otherwise
19ineligible for redemption.

20(6) A processor shall not claim refund values, processing
21payments, or administrative fees on empty beverage containers
22that the processor knew, or should have known, were received
23from noncertified recyclers or on beverage containers that the
24processor knew, or should have known, come from out of the state,
25or are otherwise ineligible for redemption. A processor may claim
26refund values, processing payments, or administrative fees on any
27empty beverage container that does not come from out of the state
28and that is received from any entity that is identified by the
29department on its list of certified recycling centers.

30(7) A processor shall take the actions necessary and approved
31by the department to cancel containers to render them unfit for
32redemption.

33(8) A processor shall prepare or maintain the following
34documents involving empty beverage containers, as specified by
35the department by regulation:

36(A) Shipping reports that are required to be prepared by the
37processor or that are required to be obtained from recycling centers.

38(B) Processor invoice reports.

39(C) Cancellation verification documents.

P8    1(D) Documents authorizing recycling centers to cancel empty
2beverage containers.

3(E) Processor-to-processor transaction receipts.

4(F) Rejected container receipts on materials subject to this
5division.

6(G) Receipts for transactions with beverage manufacturers on
7materials subject to this division.

8(H) Receipts for transactions with distributors on materials
9subject to this division.

10(I) Weight tickets.

11(9) In addition to the requirements of paragraph (7), a processor
12shall cooperate with the department and make available its records
13of scrap transactions when the review of these records is necessary
14for an audit or investigation by the department.

15(e) The department may recover, in restitution pursuant to
16paragraph (5) of subdivision (c) of Section 14591.2, any payments
17made by the department to the processor pursuant to Section 14573
18that are based on the documents specified in paragraph (8) of
19subdivision (d), that are not prepared or maintained in compliance
20with the department’s regulations, and that do not allow the
21department to verify claims for program payments.

22

SEC. 4.  

Section 14591.2 of the Public Resources Code is
23amended to read:

24

14591.2.  

(a) The department may take disciplinary action
25against any party responsible for directing, contributing to,
26participating in, or otherwise influencing the operations of a
27certified or registered facility or program. A responsible party
28includes, but is not limited to, the certificate holder, registrant,
29officer, director, or managing employee. Except as otherwise
30provided in this division, the department shall provide a notice
31and hearing in accordance with Chapter 5 (commencing with
32Section 11500) of Part 1 of Division 3 of Title 2 of the Government
33Code before taking any disciplinary action against a certificate
34holder.

35(b) All of the following are grounds for disciplinary action, in
36the form determined by the department in accordance with
37subdivision (c):

38(1) The responsible party engaged in fraud or deceit to obtain
39a certificate or registration.

P9    1(2) The responsible party engaged in dishonesty, incompetence,
2negligence, or fraud in performing the functions and duties of a
3certificate holder or registrant.

4(3) The responsible party violated this division or any regulation
5adopted pursuant to this division, including, but not limited to, any
6requirements concerning auditing, reporting, standards of operation,
7or being open for business.

8(4) The responsible party is convicted of any crime of moral
9turpitude or fraud, any crime involving dishonesty, or any crime
10substantially related to the qualifications, functions, or duties of a
11certificate holder.

12(c) The department may take disciplinary action pursuant to this
13section, by taking any one of, or any combination of, the following:

14(1) Immediate revocation of the certificate or registration, or
15revocation of a certificate or registration as of a specific date in
16the future.

17(2) Immediate suspension of the certificate or registration for a
18specified period of time, or suspension of the certificate or
19registration as of a specific date in the future. Notwithstanding
20subdivision (a), the department may impose a suspension of five
21days or less through an informal notice, if the action is subject to
22a stay on appeal, pending an informal hearing convened in
23accordance with Article 10 (commencing with Section 11445.10)
24of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government
25Code.

26(3) Imposition on the certificate or registration of any condition
27that the department determines would further the goals of this
28division.

29(4) Issuance of a probationary certificate or registration with
30conditions determined by the department.

31(5) Collection of amounts in restitution of any money improperly
32paid to the certificate holder or registrant from the fund.

33(6) Imposition of civil penalties pursuant to Section 14591.1.

34(7) Suspension for a specified period of time or permanent
35revocation of eligibility of a supermarket site, rural region recycler,
36or a nonprofit convenience zone recycler to receive handling fees
37at one or more of the certificate holder’s certified recycling centers.

38(d) The department may do any of the following in taking
39disciplinary action pursuant to this section:

P10   1(1) If a certificate holder or registrant holds certificates or is
2registered to operate at more than one site or to operate in more
3than one capacity at one location, such as an entity certified as
4both a processor and a recycling center, the department may
5simultaneously revoke, suspend, or impose conditions upon some,
6or all of, the certificates held by the responsible party.

7(2) If the responsible party is an officer, director, partner,
8 manager, employee, or the owner of a controlling ownership
9interest of another certificate holder or registrant, that other
10operator’s certificate or registration may also be revoked,
11suspended, or conditioned by the department in the same
12proceeding, if the other certificate holder or registrant is given
13notice of that proceeding, or in a subsequent proceeding.

14(3) (A) If, pursuant to notice and a hearing conducted by the
15director or the director’s designee in accordance with Article 10
16(commencing with Section 11445.10) of Chapter 4.5 of Part 1 of
17Division 3 of Title 2 of the Government Code, the department
18determines that the continued operation of a certified or registered
19entity poses an immediate and significant threat to the fund, the
20department may order the immediate suspension of the certificate
21holder or registrant, pending revocation of the certificate or
22registration, or the issuance of a probationary certificate imposing
23reasonable terms and conditions. The department shall record the
24testimony at the hearing and, upon request, prepare a transcript.
25For purposes of this section, an immediate and significant threat
26to the fund means any of the following:

27(i) A loss to the fund of at least ten thousand dollars ($10,000)
28during the six-month period immediately preceding the order of
29suspension.

30(ii) Missing or fraudulent records associated with a claim or
31claims totaling at least ten thousand dollars ($10,000) during the
32six-month period immediately preceding the order of suspension.

33(iii) A pattern of deceit, fraud, or intentional misconduct in
34carrying out the duties and responsibilities of a certificate holder
35during the six-month period immediately preceding the order of
36suspension. For purposes of this section, a pattern of deceit, fraud,
37or intentional misconduct in carrying out the duties of a certificate
38holder includes, but is not limited to, the destruction or concealment
39of any records six months immediately preceding the order of
40suspension.

P11   1(iv) At least three claims submitted for ineligible material in
2violation of this division, including, but not limited to, a violation
3of Section 14595.5, during the six-month period immediately
4preceding the order of suspension.

5(B) An order of suspension or probation may be issued to any
6or all certified or registered facilities or programs operated by a
7person or entity that the department determines to be culpable or
8responsible for the loss or conduct identified pursuant to
9subparagraph (A).

10(C) The order of suspension or issuance of a probationary
11certificate imposing terms or conditions shall become effective
12upon written notice of the order to the certificate holder or
13registrant. Within 20 days after notice of the order of suspension,
14the department shall file an accusation seeking revocation of any
15or all certificates or registrations held by the certificate holder or
16registrant. The certificate holder or registrant may, upon receiving
17the notice of the order of suspension or probation, appeal the order
18by requesting a hearing in accordance with Chapter 5 (commencing
19with Section 11500) of Part 1 of Division 3 of Title 2 of the
20Government Code. A request for a hearing or appeal from an order
21of the department does not stay the action of the department for
22which the notice of the order is given. The department may
23combine hearings to appeal an order of suspension and a hearing
24for the proposed revocation of a certificate or registration into one
25proceeding.

26(D) Nothing in this section shall prohibit the department from
27immediately revoking a probationary certificate pursuant to
28subdivision (b) of Section 14541 or from taking other disciplinary
29action pursuant to Section 14591.2.

30

SEC. 5.  

Section 14594.5 of the Public Resources Code is
31amended to read:

32

14594.5.  

Notwithstanding Section 14591.1, the department
33may assess upon any person, entity, or operation that redeems,
34attempts to redeem, or aids in the redemption of, empty beverage
35containers that have already been redeemed, or redeems, attempts
36to redeem, or aids in the redemption of, otherwise ineligible
37beverage containers, including, but not limited to, out-of-state
38containers or empty beverage container materials imported from
39out-of-state, a civil penalty of up to ten thousand dollars ($10,000)
40per transaction, or an amount equal to three times the damage or
P12   1potential damage, whichever is greater, plus costs as provided in
2Section 14591.3, pursuant to notice and hearing in accordance
3with Chapter 5 (commencing with Section 11500) of Part 1 of
4Division 3 of Title 2 of the Government Code.

begin delete
5

SEC. 6.  

Section 14595.5 of the Public Resources Code is
6amended to read:

7

14595.5.  

(a) (1) A person shall not pay, claim, or receive any
8refund value, processing payment, handling fee, or administrative
9fee for any of the following:

10(A) Beverage container material that the person knew, or should
11have known, was imported from out of state.

12(B) A previously redeemed container, rejected container, line
13breakage, or other ineligible material.

14(2) A person shall not knowingly do any of the following:

15(A) Redeem or attempt to redeem an out-of-state container,
16rejected container, line breakage, previously redeemed container,
17or other ineligible material.

18(B) Return a previously redeemed container for redemption.

19(C) Bring an out-of-state container, rejected container, line
20breakage, or other ineligible material to California for redemption.

21(D) Receive, store, transport, distribute, or otherwise facilitate
22or aid in the redemption of a previously redeemed container,
23out-of-state container, rejected container, line breakage, or other
24ineligible material.

25(b) For purposes of implementing subdivision (a), the
26department shall take all reasonable steps to exclude beverage
27container material imported from out of state, previously redeemed
28containers, rejected containers, and line breakage, when conducting
29surveys to determine a commingled rate pursuant to Section
3014549.5.

31

SEC. 7.  

No reimbursement is required by this act pursuant to
32Section 6 of Article XIII B of the California Constitution because
33the only costs that may be incurred by a local agency or school
34district will be incurred because this act creates a new crime or
35infraction, eliminates a crime or infraction, or changes the penalty
36for a crime or infraction, within the meaning of Section 17556 of
37the Government Code, or changes the definition of a crime within
38the meaning of Section 6 of Article XIII B of the California
39Constitution.

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