BILL ANALYSIS Ó
AB 1239
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Date of Hearing: August 29, 2016
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
AB 1239
(Gordon) - As Amended August 16, 2016
SUBJECT: Tire recycling: California tire regulatory fee and
waste tire program
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.
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
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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;
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; and,
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 TRIP 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 to include a tiered incentive
payment structure in the TRIP to maximize the amount of
recycling.
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
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sufficient to generate revenue equivalent to the
reasonable costs incurred by 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;
and,
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
pickup or delivery for each load of waste or used tires
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transported.
9) Repeals the Rubberized Pavement Market Development Act.
10)If the 75% policy goal is met for 3 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.
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 3 years, some of which would be
offset by fees.
2)After the third year, 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 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
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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
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.
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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.
REGISTERED SUPPORT / OPPOSITION:
Support
Alameda Waste Management Authority and Recycling Board (Stop
Waste)
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BAS Recycling
Californians Against Waste
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
Mojave Desert and Mountain Recycling
Napa Recycling and Waste Services
Rural County Representatives of California
Sonoma County, AB 939 Local Task Force
WILDCOAST
Zanker Recycling
Opposition
California Tire Dealers Association
Howard Jarvis Taxpayers Association
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Rubber Manufacturers Association
Analysis Prepared by:Elizabeth MacMillan / NAT. RES. / (916)
319-2092