BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 901| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 901 Author: Gordon (D) Amended: 9/1/15 in Senate Vote: 21 SENATE ENVIRONMENTAL QUALITY COMMITTEE: 6-1, 7/15/15 AYES: Wieckowski, Bates, Hill, Jackson, Leno, Pavley NOES: Gaines SENATE APPROPRIATIONS COMMITTEE: 6-1, 8/27/15 AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza NOES: Nielsen ASSEMBLY FLOOR: 78-2, 6/1/15 - See last page for vote SUBJECT: Solid waste: reporting requirements: enforcement SOURCE: Author DIGEST: This bill changes reporting requirements for disposal facilities, recycling and composting facilities, and local governments; and establishes civil penalties for failing to report or willfully falsify information. ANALYSIS: Existing law, pursuant to the California Integrated Waste Management Act (Public Resources Code §40000 et seq.): 1) Establishes a state recycling goal of 75% of solid waste generated be diverted from landfill disposal by 2020 through source reduction, recycling, and composting. 2) Requires each local jurisdiction to divert 50% of solid waste AB 901 Page 2 from landfill disposal through source reduction, recycling, and composting. 3) Requires a commercial waste generator, including multi-family dwellings, to arrange for recycling services and requires local governments to implement commercial solid waste recycling programs designed to divert solid waste from businesses. 4) Requires generators of specified amounts of organic waste (i.e. food waste and yard waste) to arrange for recycling services for that material. 5) Requires cities and counties to report specified information to the Department of Resources Recycling and Recovery (CalRecycle) using the Disposal Reporting System (DRS), which tracks the amount and origin of waste disposed in California and sent from California to out-of-state landfills. 6) Requires cities and counties to submit DRS information at least quarterly to CalRecycle. 7) Requires disposal facilities to report the origins and tonnages of all material accepted at the facility to the county in which it is located. 8) Requires recycling and composting facilities to submit periodic information to counties on the origin, types, and quantities of materials that are disposed of, sold to end users, or that are sold out of state. 9) Requires each county to submit period reports to the relevant cities, regional agencies, and CalRecycle on the origin and amounts of waste disposed in the jurisdiction. 10)Grants CalRecycle regulatory authority to adopt practices and procedures related to waste tracking in the state, as long as the regulations do not impose an unreasonable burden on waste handling, processing or disposal operations. This bill: AB 901 Page 3 1) Requires disposal facility operators to submit tonnage information to CalRecycle, and to counties upon request. 2) Requires recycling and composting operations and facilities to submit specified, periodic information directly to CalRecycle instead of to the counties. 3) Deletes the requirement for counties to submit periodic information, regarding solid waste disposed and diverted, to cities, regional agencies, and the department. 4) Requires exporters, brokers, and transporters of recyclables or compost to submit periodic information to CalRecycle on the types, quantities, and destinations of materials that are disposed of, sold, or transferred inside or outside of the state. Authorizes CalRecycle to provide this information, on an aggregated basis, to jurisdictions upon request. 5) Imposes penalties to any person who refuses or fails to submit waste tracking information of $500 to $5,000 per violation. 6) Imposes 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. 7) Provides that liability may be imposed either through a civil action or administratively. 8) Specifies the types of waste disposal records that are subject to inspection and copying by CalRecycle and an employee of a governmental entity; and prohibits a government entity from disclosing specified information unless necessary as part of an administrative or judicial proceeding. Authorizes a government entity to petition the superior court for injunctive or declaratory relief to enforce this authority. 9) Requires recovered civil penalties be deposited in the Integrated Waste Management Account. AB 901 Page 4 10)Requires that reports in this bill be submitted electronically, using an electronic reporting format system established by CalRecycle. Background Disposal Reporting System (DRS). Disposal reporting requirements were established in 1992. DRS is the set of guidelines that tracks the origin of waste disposed in California's landfills, and waste sent from California to out-of-state landfills. DRS is used for: calculating per capita disposal rate and measuring goal achievement for jurisdictions; calculating California's disposal rate; identifying variability in jurisdiction waste disposal over time; identifying changes in the flow of waste disposed over time; tracking waste exported out of state; and tracking the types and amounts of alternative daily cover (ADC) and alternative intermediate cover (AIC) used at landfills. In 2007, CalRecycle implemented an electronic DRS (eDRS), which simplified the process for disposal facility operators, local governments, and CalRecycle. eDRS was created to capture, store, and display disposal information submitted to CalRecycle. Under the updated system, disposal facility operators can update DRS directly on an ongoing basis, allowing counties the option to submit their quarterly disposal information through an online interface. Currently 22 counties report using eDRS, 30 continue to submit paper reports, and six are not subject to reporting requirements. Comments 1) Purpose of Bill. According to the author: California has set a goal of achieving a recycling rate of 75% by 2020. Many actions will be needed to achieve that goal, but most importantly it will be necessary to have accurate and timely data on waste disposal and recycling. Currently, data is sent to counties from disposal facilities and then the counties forward that information AB 901 Page 5 to CalRecycle. AB 901 would require waste disposal facilities and recycling and composting operations to report directly to CalRecycle. They would do so using the electronic Disposal Reporting System (DRS) that is already in place at CalRecycle. AB 901 would also strengthen CalRecycle's fraud enforcement authority by allowing the imposition of civil penalties against those who falsify or fail to submit timely, complete or accurate waste flow information. This authority is needed because, according to CalRecycle, two-thirds of DRS reports are late, incomplete, or inaccurate. Timely and accurate reports are needed if we are to achieve our goal of 75% recycling. Furthermore, inaccurate reporting can defraud local jurisdictions and the state out of millions of dollars in revenue. Finally, AB 901 also streamlines CalRecycle's authority for requiring recycling facilities to submit information on the final disposition of material those facilities accept and process - by eliminating the requirement that facilities identify the county of origin of the recycled material they handle. 2) Disposal Reporting System (DRS). This bill requires that 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 the existing requirements to ease that process. 3) DRS enforcement. 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 AB 901 Page 6 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. According to CalRecycle's report, "State of Disposal in California" (March 2015), "Statutes and the DRS regulations lack enforcement provisions. The regulations only have very limited options for encouraging compliance with these rules. If a report is late or not submitted, CalRecycle can report this at a public meeting and publish the names of non-submitters on CalRecycle's website. Currently, there are no penalties or other enforcement options. The instances and long-term patterns of misreporting in DRS highlight the lack of any effective deterrent mechanisms. Authority for investigations, enforcement actions, and monetary penalties would require legislative action." (p. 19). A number of high profile violations have occurred 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 (M). 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 $1.3M 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. Also in 2014, the Kern County District Attorney filed suit against Benz Sanitation for illegal disposal of solid waste on property east of the company's Tehachapi recycling AB 901 Page 7 facility. This case is pending. In 2012, Benz Sanitation was fined $2.375M 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 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 its 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 $13M in revenue. CalRecycle is tasked with ensuring the safe management of tires in California, including the upkeep of a waste tire manifest system. The tire manifest system has similar enforcement provisions to those in this bill. CalRecycle is authorized to assess administrative penalties of up to $10,000/day for violations of hauling and manifest requirements. According to CalRecycle, increased administrative penalty authority has resulted in a consistent decrease in violations since 2009. Similar to the success in enforcing waste tire hauling and manifest requirements, this bill proposes to provide CalRecycle with similar tools to enforce DRS requirements in this bill. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee, annual impacts of $168,000 for two years to the Integrated Waste Management Account (special) for increased enforcement by CalRecycle. SUPPORT: (Verified8/27/15) California Resource Recovery Association AB 901 Page 8 California State Association of Counties Californians Against Waste City of San Francisco, Mayor Edwin Lee County of San Mateo Inland Empire Disposal Association Los Angeles County Waste Management Association Recology Rural County Representatives of California Sierra Club Solid Waste Association of Orange County StopWaste/Alameda County Waste Management Authority Waste Management OPPOSITION: (Verified8/27/15) Waste Connections ASSEMBLY FLOOR: 78-2, 6/1/15 AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins NOES: Brough, Harper Prepared by:Joanne Roy / E.Q. / (916) 651-4108 9/1/15 20:25:10 **** END **** AB 901 Page 9