BILL ANALYSIS Ó AB 901 Page 1 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 AB 901 Page 2 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 AB 901 Page 3 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. AB 901 Page 4 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 AB 901 Page 5 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 AB 901 Page 6