BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1239


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          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          1239 (Gordon and Atkins)


          As Amended  August 16, 2016


          Majority vote


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          |ASSEMBLY:  |50-29 |(June 2, 2015) |SENATE: |25-13 |(August 22,      |
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          Original Committee Reference:  NAT. RES.


          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 regulatory costs associated with waste and used tire  
          management.  


          The Senate amendments: 


          1)Establish a state policy goal that 75% of solid waste tires  
            generated in California be source reduced or recycled by 2020.  



          2)If the 75% goal is met for three consecutive years, require  
            CalRecycle to review existing tire recycling programs and make  








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            recommendations as to which policies are necessary to maintain  
            and increase the level of waste tire recycling.


          3)Clarify the entities and types of projects that are eligible  
            for funding. 


          4)Require CalRecycle to conduct a public workshop prior to  
            establishing or adjusting the amount of the tire regulatory  
            fee and specifies factors that CalRecycle must consider when  
            establishing or adjusting the tire regulatory fee.  


          5)Require CalRecycle to fund the TRIP with California Tire  
            Management Fund reserves until CalRecycle finds that the  
            reserve is insufficient to cover the costs.  


          6)Require waste and used tire haulers, 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.


          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  
               Pollution Control Fund for programs and projects that  








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               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.  


          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, this bill has the following fiscal impacts: 


          1)$880,000 annually (California Tire Management Fund) to  
            CalRecycle for the first three years, some of which would be  
            offset by fees.


          2)After year three, ongoing costs of approximately $642,000  
            annually (California Tire Management Fund) to CalRecycle, some  
            of which would be offset by fees.


          COMMENTS:  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  








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          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.  


          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  








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          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.  


          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.  The law also allows, but does not require, that  
          data to be submitted electronically to CalRecycle.  This bill  
          updates the tire manifest system and requires that electronic  
          reporting.  


          Analysis Prepared by:                                             
                          Elizabeth MacMillan / NAT. RES. / (916) 319-2092  
                                                                         
          FN: 0004496


















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