BILL ANALYSIS                                                                                                                                                                                                    



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          ASSEMBLY THIRD READING


          AB  
          901 (Gordon)


          As Amended  April 20, 2015


          Majority vote


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                 |Noes                 |
          |----------------+------+---------------------+---------------------|
          |Natural         |8-1   |Williams, Dahle,     |Harper               |
          |Resources       |      |Cristina Garcia,     |                     |
          |                |      |Hadley, McCarty,     |                     |
          |                |      |Rendon, Mark Stone,  |                     |
          |                |      |Wood                 |                     |
          |                |      |                     |                     |
          |----------------+------+---------------------+---------------------|
          |Appropriations  |17-0  |Gomez, Bigelow,      |                     |
          |                |      |Bonta, Calderon,     |                     |
          |                |      |Chang, Daly, Eggman, |                     |
          |                |      |Gallagher,           |                     |
          |                |      |                     |                     |
          |                |      |                     |                     |
          |                |      |Eduardo Garcia,      |                     |
          |                |      |Gordon, Holden,      |                     |
          |                |      |Jones, Quirk,        |                     |
          |                |      |Rendon, Wagner,      |                     |
          |                |      |Weber, Wood          |                     |
           ------------------------------------------------------------------- 


          SUMMARY:  Updates, revises, and expands the information recycling  
          and composting operations and facilities are required to submit to  








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          the Department of Resources Recycling and Recovery (CalRecycle).   
          Specifically, this bill:  


          1)Clarifies that recycling and composting operations and  
            facilities are required to submit periodic information and  
            requires that information be submitted to CalRecycle, rather  
            than counties.  Authorizes CalRecycle to 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 $500 to $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  
            $500 to $10,000 per violation.  


          4)Requires that all reporting required by the bill or related  
            regulations be submitted electronically. 


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


          6)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 penalties.  


          7)Requires that any penalties collected be deposited into the  
            Integrated Waste Management Account or retained by the city or  








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            county that brought the action.  


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee:  


          1)Estimated increased costs of over $330,000 (IWMA) for Fiscal  
            Year (FY) 2015-16 and FY 2016-17 (second and third years of  
            implementation) for CalRecycle 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:  In 2011, the Legislature established a statewide  
          recycling goal of 75% by 2020.  According to CalRecycle, achieving  
          the 75% recycling goal will require CalRecycle to successfully  
          collect reliable waste flow data.  


          The existing lack of enforcement authority for waste flow  
          reporting contributes to a widespread lack of compliance.   
          According to CalRecycle, 65% of 2013 Disposal Reporting System  
          (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.  


          Additionally, 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 their recycling  
          requirements.  Several recent cases in which disposal tonnages  
          were misallocated resulted in criminal action and involved  
          millions of dollars in fraud.   










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          Existing law relating to disposal reporting, established in 1992,  
          is outdated.  In 2007, CalRecycle implemented an electronic DRS  
          (eDRS), which simplified 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.  


          Moreover, 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 facilitate  
          that process.  


          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 last  
          several 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 are accused of  
          misclassifying construction waste as green waste and illegally  
          collecting fees on the material from landfill customers.  The  
          defendants are also accused of misrepresenting the weight of  








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          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 has been accused of collecting  
          residential and commercial solid waste from Los Angeles County,  
          creating 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 county. 


          In 2008, a number of employees of the Kirby Canyon Landfill in San  
          Jose were involved in a bribery scheme in which a waste hauler,  
          Resource Development Services, bribed the workers to allow his  
          trucks to pay reduced landfill fees.  Six employees were arrested,  
          and five were fired but not charged.  An internal investigation  
          found that Waste Management, the owner of the landfill, lost more  
          than $13 million in revenue.  




          Analysis Prepared by:                                               
                          Elizabeth MacMillan / NAT. RES. / (916) 319-2092    
                                                                      FN:  
          0000672








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