BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                        AB 901|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
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                                   THIRD READING 


          Bill No:  AB 901
          Author:   Gordon (D), et al.
          Amended:  9/4/15 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.

          Senate Floor Amendments of 9/4/15 clarify language related to  
          information that disposal facilities must provide to the  
          Department of Resources Recycling and Recovery.
          
          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  








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             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  
             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  








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             handling, processing or disposal operations.

          This bill:

          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) Specifies that the aggregated information, other than that  
             aggregated by the company, is public information.

          6) Imposes penalties to any person who refuses or fails to  
             submit waste tracking information of $500 to $5,000 per  
             violation.

          7) 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.

          8) Provides that liability may be imposed either through a civil  
             action or administratively.

          9) 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.   








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             Authorizes a government entity to petition the superior court  
             for injunctive or declaratory relief to enforce this  
             authority.

          10)Requires recovered civil penalties be deposited in the  
             Integrated Waste Management Account.

          11)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  








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               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  
               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  








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             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  
             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  








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               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  
               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.








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          SUPPORT:   (Verified9/4/15)


          California Refuse Recycling Council
          California Resource Recovery Association 
          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
          Republic Services
          Rural County Representatives of California
          Sierra Club
          Solid Waste Association of Orange County
          StopWaste/Alameda County Waste Management Authority
          Waste Management  


           OPPOSITION:   (Verified9/4/15)


          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









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          Prepared by:Joanne Roy / E.Q. / (916) 651-4108
          9/8/15 17:22:26


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