BILL ANALYSIS Ó
AB 1239
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Date of Hearing: April 27, 2015
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
AB 1239
(Gordon) - As Amended April 21, 2015
SUBJECT: Tire recycling: California tire regulatory fee
SUMMARY: Establishes the Tire Recycling Incentive Program
(TRIP) Act to provide incentives for tire recycling activities
in California. Establishes a new tire regulatory fee, set by
the Department of Resources Recycling and Recovery (CalRecycle),
to cover its regulatory costs associated with waste and used
tire management.
EXISTING LAW:
1)Pursuant to the California Integrated Waste Management Act of
1989, establishes a state policy goal that 75% of solid waste
generated be diverted from landfill disposal by 2020.
2)Establishes the California Tire Recycling Act (Act), which:
a) Requires a person who purchases a new tire to pay a
California tire fee of $1.75 for each new tire purchased in
the state. One dollar of which is deposited into the Tire
Recycling Fund for oversight, enforcement, and market
development grants relating to waste tire management and
recycling. The remaining $0.75 is deposited into the Air
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Pollution Control Fund for programs and projects that
mitigate or remediate air pollution caused by tires.
b) Reduces the fee on January 1, 2024 to $0.75 per tire, to
be deposited into the Tire Recycling Fund.
c) Authorizes CalRecycle to award grants, loans, subsidies,
and rebates and pay incentives for various purposes related
to reducing landfill disposal of waste tires.
d) Requires CalRecycle to adopt a Five Year Plan, which
must be updated every two years, that establishes goals and
priorities for the waste tire program.
e) Defines "waste tire generator" as any person whose act
or process produces any amount of waste or used tires, or
causes a waste or used tire hauler to transport those waste
or used tires, or otherwise causes waste or used tires to
become subject to regulation.
THIS BILL establishes the TRIP, which:
1)Requires CalRecycle to establish a tire recycling incentive
program to award payments to eligible recipients, as
determined by CalRecycle, in the following manner:
a) To cities, counties, other local government agencies,
and school districts to fund construction projects that use
recycled tires.
b) To state and local government agencies, including
regional park districts, to fund disability access projects
at parks and bikeways.
c) To a private manufacturer who produces a consumer
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product using recycled tires in California.
2)Requires CalRecycle to award $2 for every 12 pounds of crumb
rubber used by the eligible recipient and authorizes
CalRecycle to adjust this amount if it determines the
adjustment would further the purposes of CalRecycle's tire
program.
3)Requires CalRecycle to annually allocate $30 million for the
Program, unless or until the California tire fee becomes less
than $1.75.
4)Requires any waste tire generator to pay a California tire
regulatory fee at an amount to be determined by CalRecycle
pursuant to the following:
a) For a waste tire generator that is a retail seller of
new tires to end purchasers at an amount sufficient to
generate revenues equivalent to the reasonable regulatory
costs incurred by CalRecycle for audits, inspections,
administrative costs, adjudications, manifesting,
registration, and other regulatory activities regarding the
generators, but not to exceed $1.25 per tire. Authorizes
CalRecycle to establish different fees based on the type of
retail seller depending on the nature of the activity,
number of tires generated, and other appropriate factors.
b) For a waste tire generator that is not a retail seller
at an amount sufficient to generate revenues equivalent to
the reasonable regulatory costs incurred by CalRecycle for
audits, inspections, administrative costs, adjudications,
manifesting, registration, and other regulatory activities
regarding the generators. Authorizes CalRecycle to
establish different fees based on the type of retail seller
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depending on the nature of the activity, number of tires
generated, and other appropriate factors.
c) Specifies that the "aggregate amount" of the regulatory
fees shall not exceed the aggregate reasonable regulatory
costs incurred by CalRecycle.
5)Requires the waste tire generator to remit the regulatory fee
quarterly.
6)Makes corresponding changes to the provision of law that
replaces current law on January 1, 2024.
FISCAL EFFECT: Unknown
COMMENTS:
1)Author's statement:
AB 1239 by Assembly Member Gordon and Speaker Atkins will
help expand the state's tire recycling infrastructure to
reduce greenhouse gases, create jobs, and cut the statewide
and local costs associated with tire pile cleanup.
AB 1239 proposes to establish a Tire Recycling Incentive
Program to provide an incentive payment for end-users of
recycled tires (including local governments that use tires
as rubberized pavement as well as manufacturers who produce
products using recycled tires.) AB 1239 will also give
CalRecycle the authority to increase the state tire fee to
cover the costs of regulating waste tires (in an amount not
to exceed $1.25/tire.)
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2)Tire management in California. According to CalRecycle,
approximately 40 million waste tires are generated in
California every year. CalRecycle's diversion goal is 90%;
according to the California Waste Tire Market Report: 2013,
California has achieved an overall diversion rate of 87.3%.
Of the of the 40.8 million tires generated: 12.3 million were
exported (for fuel or reuse); 7.9 million were recycled as
ground rubber; 0.5 million were used in civil engineering
projects; 6.6 million were reused (either sold as used tires
or retreaded); 8.2 million were used as tire derived fuel in
cement kilns or at co-generation facilities; 1.2 million were
used as cover at landfills; and, 5.3 million were disposed in
landfills.
CalRecycle's "affiliated goals" to achieve its 90% diversion
rate for tires are: 1) develop long-term, sustainable, and
diversified market demand for California tire-derived
products; 2) ensure the protection of public health, safety,
and the environment while developing a safe and high-quality
supply infrastructure to meet that demand; and, 3) foster
information flow and technology and product development so
that environmental protection and diversion goals are achieved
with supply and demand in balance.
CalRecycle is in the process of adjusting its waste tire
market development programs, in accordance with its Five Year
Plan, to more effectively focus CalRecycle resources on
diversifying and expanding markets. CalRecycle has also
indicated a long-term vision of increasing tire recycling,
rather than just diversion. Specifically, CalRecycle has
begun crafting a new incentive program that would
differentiate incentive payments, with higher payments going
to "preferred end-users" that recycle waste tires into new
products such as rubberized asphalt concrete, moderate
payments for end uses such as tire-derived aggregate, and
lower payments for less-preferred non-disposal management such
as energy generation.
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CalRecycle's analysis of past grants indicates that about 25%
of the total sales of California-produced tire-derived
products were supported by grants, while about 12.5% of
California crumb rubber sold to paving applications was
supported by CalRecycle paving grants. In order to achieve
CalRecycle's long-term goals for tire recycling, it is in the
process of redirecting approximately half of its budget for
the Tire Derived Product Grant Program to a new Tire Incentive
Program that will focus on promoting new tire-derived product
development and shift established product manufacturers to use
of ground rubber from other feedstock. CalRecycle is also
replacing the Tire-Derived Product Business Assistance
Program, which offered a wide variety of assistance to
manufacturers, with a new Tire Outreach and Market Analysis
(TOMA) program. TOMA will focus exclusively on outreach and
education to promote tire-derived products.
This bill is consistent with the direction and recommendations
of CalRecycle's 2015 Five Year Plan.
3)Suggested amendments. This bill contains a number of drafting
issues that inadvertently resulted in provisions that are not
consistent with the intent of the author. In order to address
these issues, the committee may wish to adopt the following
amendments:
a) Strike references to "waste tire generator" and clarify
that the regulatory fee is assessed on retail sellers of
new tires.
b) Strike out lines 3 through 13 on page 6 of the bill to
clarify that there is one regulatory fee.
c) Delete the provision that grants CalRecycle the
authority to establish different fees for different
sellers.
d) Clarify that the amount of the one regulatory fee shall
not exceed CalRecycle's reasonable regulatory costs.
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e) Make the corresponding changes to the provisions of the
bill that will become effective on January 1, 2024.
REGISTERED SUPPORT / OPPOSITION:
Support
Californians Against Waste
California Association of Local Conservation Corps
California League of Conservation Voters
California State Association of Counties
Don't Waste LA Project
Environmental Action Committee of West Marin
Los Angeles Alliance for a New Economy
WILDCOAST
Opposition
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None on file
Analysis Prepared by:Elizabeth MacMillan / NAT. RES. / (916)
319-2092