BILL ANALYSIS                                                                                                                                                                                                    



                                                                     AB 901


                                                                    Page  1


          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          901 (Gordon)


          As Amended  September 1, 2015


          Majority vote


           -------------------------------------------------------------------- 
          |ASSEMBLY:  | 78-2 |(June 1, 2015) |SENATE: |26-10 | (September 10,  |
          |           |      |               |        |      |2015)            |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |
           -------------------------------------------------------------------- 


          Original Committee Reference:  NAT. RES.


          SUMMARY:  Updates, revises, and expands the information  
          recycling and composting operations and facilities are required  
          to submit to the Department of Resources Recycling and Recovery  
          (CalRecycle).


          The Senate amendments: 


          1)Require solid waste facilities to report specified information  
            to counties upon request.  


          2)Specify that the information reported may exclude contract  
            terms and conditions, including information on pricing, credit  
            terms, volume discounts, and other proprietary business terms.  
             









                                                                     AB 901


                                                                    Page  2



          3)Require, rather than authorize, CalRecycle to adopt  
            regulations pursuant to this bill, and require that the  
            regulations include procedures to ensure that an opportunity  
            to comply is offered prior to enforcement action and factors  
            to be considered when determining penalty amounts. 


          4)Delete a provision that authorized CalRecycle to delegate  
            enforcement of this bill's requirements to a local agency. 


          5)Clarify that information submitted to CalRecycle or inspected  
            by CalRecycle as part of an audit is confidential and not  
            subject to the Public Records Act.  


          6)Authorize an employee of a government entity to inspect and  
            copy records at a disposal facility relating to tonnage  
            received on or after July 1, 2015, and originating within the  
            government entity's geographic jurisdiction for purposes of  
            enforcing the collection of local fees.  


          7)Authorize a disposal facility operator to redact confidential  
            pricing information from the records, as specified.  


          8)Make related technical and clarifying changes. 


          EXISTING LAW, pursuant to the California Integrated Waste  
          Management Act (Act): 


          1)Establishes a state recycling goal of 75% by 2020 and requires  
            each local jurisdiction to divert 50% of solid waste from  
            landfill disposal.


          2)Requires a commercial waste generator, including multi-family  
            dwellings, to arrange for recycling services and requires  








                                                                     AB 901


                                                                    Page  3


            local governments to implement commercial solid waste  
            recycling programs designed to divert solid waste from  
            businesses.


          3)Requires generators of specified amounts of organic waste  
            (i.e., food waste and yard waste) to arrange for recycling  
            services for that material.  


          4)Requires cities and counties to report specified information  
            to 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.  


          5)DRS information must be submitted by cities and counties at  
            least quarterly to CalRecycle.  


          6)Requires disposal facilities to report the origins and  
            tonnages of all material accepted at the facility to the  
            county in which it is located.  


          7)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. 


          8)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.  


          9)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.  










                                                                     AB 901


                                                                    Page  4


          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, this bill has annual fiscal impacts of $168,000 for  
          two years to the Integrated Waste Management Account (special)  
          for increased enforcement by CalRecycle.


          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.   


          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 counties continue to submit paper reports, and  
          six counties 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  








                                                                     AB 901


                                                                    Page  5


          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 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.   








                                                                     AB 901


                                                                    Page  6


          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: 0002334