BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Wieckowski, Chair
2015 - 2016 Regular
Bill No: AB 1239
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|Author: |Gordon and Atkins |
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|Version: |2016 |Hearing |June 29, 2016 |
| | |Date: | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Joanne Roy |
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SUBJECT: Tire recycling: California tire regulatory fee and waste
tire program.
ANALYSIS:
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. (Public
Resources Code (PRC) §40000 et seq.)
2) Establishes the California Tire Recycling Act (Act) (PRC §42860
et seq.), 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
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.
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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:
1) Establishes the Tire Recycling Incentive Program Act and a
policy goal of source reducing or recycling 75% of solid waste
tires in the state by 2020.
2) Requires CalRecycle to establish a tire recycling incentive
program and develop a plan for the program to include a tiered
incentive payment structure in order to maximize the amount of
California generated waste tire material recycled.
3) Between July 1, 2018, and January 1, 2024, requires CalRecycle
to annually allocate at least $20 million for the tire recycling
incentive program; and beginning January 1, 2024, authorizes
CalRecycle to allocate funding for the program based on
available funding.
4) Establishes the "California tire regulatory fee".
a) Authorizes CalRecycle to establish the fee in an amount,
not to exceed $1 per new tire sold, that is sufficient to
generate revenue equivalent to the reasonable costs incurred
by the department related for regulatory activities regarding
waste tires.
b) Requires CalRecycle to adopt regulations to implement the
initial fee and authorizes CalRecycle to adjust the fee based
on specified factors.
c) Authorizes a retail seller to retain 1.5% of the
California tire regulatory fee as reimbursement for costs
associated with the administration and remittance of the fee.
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d) Requires a waste tire generator to pay a California tire
regulatory fee and remit the fee to the state for deposit in
the California Tire Recycling Management Fund.
e) Requires CalRecycle to identify specific programs that the
California tire regulatory fee would fund.
5) Makes an entity eligible to receive an incentive payment upon
demonstrating to CalRecycle that the entity purchased
California-generated waste tire material processed in the state
and sold an incentive-eligible tire product incorporating that
material to an end user.
6) Specifies that an "eligible entity" to receive incentive
payments includes, but is not limited to, a manufacturer that
produces a product using California generated waste tires for
purchase by an end user.
7) Includes examples of "incentive-eligible tire products" such as
pavement-related products (e.g. rubberized asphalt), walkways
and pathways, poured in place and tile playground mats, and
landscape nuggets and mulch.
8) Excludes specified products from "incentive-eligible tire
products."
9) Requires a waste and used tire hauler, on and after January 1,
2018, to submit an electronic manifest, instead of a paper
manifest, to CalRecycle within seven days of the date of the
pickup or delivery for each load of waste or used tires
transported.
10)Repeals the Rubberized Pavement Market Development Act.
11)If the 75% policy goal is met for three consecutive years,
requires CalRecycle to review existing tire recycling programs
and make recommendations, as specified.
12)Sunsets the provisions of this bill on January 1, 2024.
Background
1) Diversion of waste tires in California. According to
CalRecycle, approximately 40 million waste tires are generated
in California every year. CalRecycle's diversion goal is 90%;
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according to the California Waste Tire Market Report: 2013,
California has achieved an overall diversion rate of 87.3%. 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.
2) Waste tire management. CalRecycle's tire management program is
divided into two functional areas: 1) permitting and
enforcement activities; and, 2) tire recycling and marketing
development activities. The tire permitting and enforcement
activities ensure that reusable and waste tires are stored and
transported safely. CalRecycle coordinates with local and
regional agencies to mitigate unsafe situations at existing
abandoned tire pile sites and provide technical assistance.
Tire recycling activities include offering financial assistance,
engaging in recycling and marketing research, and technical
assistance.
Waste tire management activities that CalRecycle has developed and
funded to stimulate diversion of reusable and waste tires from
landfill disposal include:
Business development assistance to California
enterprises.
Research to expand the use and recyclability of tires.
Assistance to local governments to manage waste tires.
Regulation of waste tire facilities and waste tire
haulers, to help ensure the protection of public health,
safety, and the environment.
Public education.
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Currently, the recycling markets in California do not consume all
of the waste tires generated. Waste tires need to be stored
safely until sufficient markets are in place to increase the
consumption of waste tires. CalRecycle provides the proper waste
tire management framework by enforcing waste tire facility and
waste tire hauler regulations. As the use of tires as feedstock
material in commercial applications increases, illegal
stockpiling and the need for permitted storage will decrease or
cease to exist.
1) Tire incentive program. According to CalRecycle's report,
"Evaluation of Tire Incentive and Extended Producer
Responsibility Policies" (June 2, 2012), incentives offer a
range of potential benefits, including increased diversion,
strengthened in-state infrastructure and some relief against
export-induced disruptions. 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.
2) Waste/used tire manifest program. According to CalRecycle, PRC
§42961.5 requires CalRecycle to develop a "California Uniform
Waste and Used Tire Manifest." The intent is to "close the loop"
on accountability by requiring copies of each manifest or
comprehensive trip log to be submitted to CalRecycle for
monitoring tire movement within the state. The law also allows
for data to be submitted electronically to CalRecycle.
The Waste Tire Manifest System is a tracking mechanism used by
CalRecycle to monitor the generation, transportation, and
ultimate disposal of used/waste tires in California. The goal
of the system is to help eliminate the illegal storage or
disposal of used/waste tires by allowing CalRecycle to focus
enforcement efforts on worst offenders. The waste tire manifest
system program applies to all persons, businesses, nonprofits,
and government agencies that generate, transport, or receive
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waste or used tires. CalRecycle and tire enforcement agency
staff members inspect and investigate waste and used tire
generators, end-use facilities, and haulers to ensure that
manifests are properly completed, handled, and submitted to
CalRecycle.
Comments
1)Purpose of Bill. According to the author, "Californians generate
42 million passenger tires every single year, and the management
of these tires has proven difficult - illegally dumped tires pose
a significant cost to local governments and the state, large
abandoned tire piles have resulted in weeks-long fires, and the
overall recycling rate has remained largely stagnant. In order
to drastically increase tire recycling, in addition to the
intrinsic environmental and economic benefits of recovering this
material, CalRecycle recently recommended that the Legislature
'implement an expanded incentive program that provides payments
for desired end-uses of tires.' AB 1239 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."
2)1.5% retailer cost reimbursement. AB 1239 authorizes a retail
seller to retain 1.5% of the California tire regulatory fee as
reimbursement for costs associated with the administration and
remittance of the fee.
This fee imposes the regulatory fee directly onto the retailer as
opposed to the consumer. The retailer can choose to treat the fee
as a cost-of-goods-sold. In such a case, the retailer can
increase the tire's purchase price rather than show a separate
line item cost on a consumer's receipt of purchase.
Other fee programs (approximately 34 of them in the state), such as
the current tire fee, the e-waste fee, and the lumber products
fee, all impose fees on consumers and allow the collector of the
fees (e.g. the retailer) to retain a percentage of the fees
collected as reimbursement for the collector's compliance costs.
However, AB 1239 would allow the fee payer, in this case the tire
retailer, to also keep 1.5% of the fee. If the tire retailer is
not acting as the middle man that may be reimbursed for its
compliance costs as the go-between for a consumer (as fee payer)
and the state, why is the tire retailer essentially provided an
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automatic discount on a fee it is required to pay? It does not
seem to make logical sense to authorize the retailer to retain a
portion of a fee that is directly imposed on it. Such a cost
reimbursement would set a dubious precedent for fee programs.
Because the retailer is a direct fee payer, the Committee may wish
to consider deleting the provision authorizing a retail seller to
retain 1.5% of the California tire regulatory fee as
reimbursement for costs associated with the administration and
remittance of the fee.
Related/Prior Legislation
SB 47 (Hill, 2015), as heard in Senate Environmental Quality
Committee, would have required the Office of Environmental Health
Hazard Assessment to conduct a study by July 1, 2017, analyzing
potential adverse health impacts from synthetic turf made from
waste tires and would have prohibited the awarding of grants or
other funding assistance for the manufacturing or installation of
synthetic turf made from waste tires. SB 47 was returned to
Secretary of Senate pursuant to Joint Rule 62(a).
AB 513 (Frazier, Chapter 499, Statutes of 2013), established the
Rubberized Asphalt Concrete (RAC) Market Development Act, which
codified the CalRecycle RAC grant program for local public works
projects.
AB 2658 (Bocanegra, 2014), would have clarified that "parklets" and
"greenways" were eligible for grants for public works projects that
use tire-derived products and would have required CalRecycle, when
awarding grants for parklets and greenways, to give priority to
projects located in disadvantaged communities. Senate
Transportation & Housing Committee (failed 4-3).
SOURCE: Californians Against Waste
SUPPORT:
None received
OPPOSITION:
None received
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