BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1239| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1239 Author: Gordon (D) and Atkins (D) Amended: 8/16/16 in Senate Vote: 21 SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-1, 6/29/16 AYES: Wieckowski, Hill, Jackson, Leno, Pavley NOES: Gaines NO VOTE RECORDED: Bates SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16 AYES: Lara, Beall, Hill, McGuire, Mendoza NOES: Bates, Nielsen ASSEMBLY FLOOR: 50-29, 6/2/15 - See last page for vote SUBJECT: Tire recycling: California tire regulatory fee and waste tire program SOURCE: Author DIGEST: This bill establishes the Tire Recycling Incentive Program Act and the policy goal of source reducing or recycling 75% of solid waste tires in the state by 2020. ANALYSIS: Existing law: 1) Establishes, pursuant to the California Integrated Waste Management Act of 1989, a state policy goal that 75% of solid waste generated be diverted from landfill disposal by 2020. AB 1239 Page 2 (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 the Department of Resources Recycling and Recovery (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: 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. AB 1239 Page 3 3) 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 CalRecycle 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) 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. d) Requires CalRecycle to identify specific programs that the California tire regulatory fee would fund. 4) 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. 5) 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. 6) 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. 7) Excludes specified products from "incentive-eligible tire products." 8) 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 AB 1239 Page 4 pickup or delivery for each load of waste or used tires transported. 9) Repeals the Rubberized Pavement Market Development Act. 10)If the 75% policy goal is met for three consecutive years, requires CalRecycle to review existing tire recycling programs and make recommendations, as specified. 11)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%; 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 AB 1239 Page 5 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. 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. AB 1239 Page 6 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 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 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 AB 1239 Page 7 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." 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 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). AB 513 (Frazier, Chapter 499, Statutes of 2013), established the Rubberized Asphalt Concrete Market Development Act, which codified the CalRecycle RAC grant program for local public works projects. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee: AB 1239 Page 8 Approximately $880,000 annually (California Tire Management Fund) to CalRecycle for the first three years, some of which would be offset by fees. After year three, ongoing costs of approximately $642,000 annually (California Tire Management Fund) to CalRecycle, some of which would be offset by fees. SUPPORT: (Verified8/15/16) Alameda Waste Management Authority and Recycling Board (StopWaste) BAS Recycling California Association of Local Conservation Corps California League of Conservation Voters California State Association of Counties CRM Company Don't Waste LA Los Angeles Alliance for a New Economy Marin County Hazardous and Solid Waste Management JPA (Zero Waste Marin) Mojave Desert and Mountain Recycling Napa Recycling & Waste Services Rural County Representatives of California Sonoma County, AB 939 Local Task Force WILDCOAST Zanker Recycling OPPOSITION: (Verified8/15/16) None received ASSEMBLY FLOOR: 50-29, 6/2/15 AYES: Alejo, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, AB 1239 Page 9 Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández, Holden, Jones-Sawyer, Levine, Lopez, Low, McCarty, Medina, Mullin, Nazarian, O'Donnell, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Atkins NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang, Dahle, Beth Gaines, Gallagher, Grove, Hadley, Harper, Irwin, Jones, Kim, Lackey, Linder, Maienschein, Mathis, Mayes, Melendez, Obernolte, Olsen, Patterson, Salas, Steinorth, Wagner, Waldron, Wilk NO VOTE RECORDED: Chávez Prepared by:Joanne Roy / E.Q. / (916) 651-4108 8/16/16 17:38:45 **** END ****