BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       AB 1239|
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                                   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.   








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             (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.








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          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  








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             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  








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             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.   








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             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  








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          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:








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           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,  








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            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


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