BILL ANALYSIS                                                                                                                                                                                                    



                                                                     AB 901


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          Date of Hearing:  April 29, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          901 (Gordon) - As Amended April 20, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:   


          SUMMARY:


          This bill modifies and expands the information recycling and  
          composting operations and facilities are required to submit to  
          CalRecycle.  This bill establishes penalties for failing to  
          submit information or filing false reports. Specifically, this  








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          bill:  


          1)Specifies recycling and composting operations, in addition to  
            facilities, are required to submit information to CalRecycle,  
            rather than counties. CalRecycle may provide this information  
            to local jurisdictions upon request. 


          2)Establishes penalties for any person who refuses or fails to  
            submit waste tracking information required by law or  
            regulation of not less than $500 and not more than $5,000 per  
            violation.  


          3)Establishes penalties for any person who knowingly or  
            willfully files a false report, or any person who refuses to  
            permit CalRecycle to perform an inspection or examination of  
            records of not less than $500 and not more than $10,000 per  
            violation.  


          4)Authorizes cities and counties to be designated by CalRecycle  
            to enforce these provisions.  


          5)Requires all required reporting to be submitted  
            electronically. 


          6)Authorizes CalRecycle or its designee to conduct audits,  
            perform site inspections, observe facility operations, and  
            otherwise investigate the recordkeeping and reporting.  


          7)Authorizes CalRecycle to issue an administrative complaint to  
            any person on whom civil liability may be imposed, as  
            specified, and specifies that existing formal adjudicative  
            procedures apply for the imposition of administrative  








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            penalties.  


          8)Requires any collected penalties to be deposited into the  
            Integrated Waste Management Account (IWMA) or retained by the  
            city or county that brought the action.  


          FISCAL EFFECT:


          1)Estimated increased costs of over $330,000 (IWMA) for FY15-16  
            and FY16-17 (second and third years of implementation) for  
            CalRecyle to conduct an enforcement program.  Costs may be  
            offset by streamlined data collection workloads and unknown  
            revenue increases resulting from the penalty authority  
            established in the bill (IWMA). 


          2)Minor, absorbable costs for first year implementation (IWMA).


          COMMENTS: 


          1)Rationale.  AB 341 (Chesbro), [Chapter 476, Statutes of 2011],  
            directed CalRecycle to achieve a statewide recycling goal of  
            75% by 2020.  According to the author, moving toward the more  
            progressive 75% recycling goal will require CalRecycle to  
            successfully collect reliable waste flow data.  


            The current absence of enforcement authority contributes to a  
            widespread lack of compliance.  According to CalRecycle, 65%  
            of 2013 DRS reports were late, incomplete, or inaccurate.   
            Inadequate waste flow data comprises California's ability to  
            make informed decisions about how and where to allocate  
            resources to achieve the 75% recycling goal.  









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            The author further states, inaccurate reporting can defraud  
            local jurisdictions and the state out of millions of dollars  
            in revenue and hinder the ability of local jurisdictions to  
            comply with requirements.  Several recent cases where disposal  
            tonnages were misallocated resulted in criminal action and  
            involved millions of dollars in fraud.   


            This bill provides improved reporting accuracy and enforcement  
            authority.


          2)Background.  Existing law relating to disposal reporting,  
            established in 1992, is outdated.  In 2007, CalRecycle  
            implemented an electronic Disposal Reporting System (eDRS), to  
             simplify the process for disposal facility operators, local  
            governments, and CalRecycle.  


            Under the updated system, disposal facility operators can  
            update DRS directly on an ongoing basis.  Currently, 22  
            counties report using eDRS, 30 continue to submit paper  
            reports, and 6 are not subject to reporting requirements.   
            This bill requires that all reports be submitted using eDRS.  



            Existing law as it relates to reporting requirements for  
            recycling and composting facilities has been in effect since  
            1992; however, CalRecycle has never implemented the provision  
            that requires recycling facilities to report on the types and  
            quantities of materials that they accept.  
            CalRecycle has indicated that in order to achieve California's  
            75% recycling goal and ensure compliance with organic waste  
            recycling requirements, it intends to begin implementing these  
            provisions.  This bill updates and streamlines the existing  
            requirements to ease that process.  









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          3)Major Violations.  While all counties in which solid waste  
            facilities are located are required to submit DRS reports,  
            compliance is a significant issue.  Currently, 65% of DRS  
            reports received by CalRecycle are not properly filed.  Just  
            under 30% (126 facilities) submitted their annual reports to  
            counties late in 2013, and 29 facilities never submitted their  
            2013 annual report and remain out of compliance.   



          There have been a number of high profile violations over the few  
            years.   Earlier this year, four former employees of the Ox  
            Mountain Landfill in San Mateo County were charged with grand  
            theft of nearly $1.4 million.  The employees misclassified  
            construction waste as green waste and illegally collected fees  
            on the material from landfill customers.  The defendants are  
            also accused of misrepresenting the weight of materials  
            disposed of by certain customers and stealing the difference  
            between the amount they charged consumers and the amount paid  
            to the landfill.   

          In 2014, a jury ordered Recology (a waste management company) to  
            repay $1.3 million to San Francisco ratepayers for bonuses it  
            received in 2008 from the city for meeting recycling goals.   
            The jury found that the bonus was paid based on false  
            information provided by Recology to the city.  This case is  
            currently pending appeal.  

          Also in 2014, the Kern County District Attorney filed suit  
            against Benz Sanitation for illegally disposing of solid waste  
            on property east of the company's Tehachapi recycling  
            facility.  This case is pending.  
            In 2012, Benz Sanitation was fined $2.375 million for  
            falsifying records.  The company collected residential and  
            commercial solid waste from Los Angeles County, created  
            fraudulent documents showing that the trash was generated in  
            Kern County and disposed of the material in Tehachapi Landfill  
            in Kern County, thereby avoiding disposal fees for either  








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            county. 


            



            Analysis Prepared by:Jennifer Galehouse / APPR. / (916)  
          319-2081