BILL ANALYSIS �
AB 549
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2011-2012 Regular Session
BILL NO: AB 549
AUTHOR: Carter
AMENDED: May 2, 2012
FISCAL: Yes HEARING DATE: May 14, 2012
URGENCY: No CONSULTANT: Peter Cowan
SUBJECT : ELECTRONIC WASTE RECYCLING
SUMMARY :
Existing law :
1) Pursuant to the Hazardous Electronic Waste Recycling Act of
2003 (Act) (Public Resources Code �42460 et seq. and Health
and Safety Code �25214.9 et seq.):
a) Requires a consumer to pay a Covered Electronic Waste
(CEW) recycling fee upon the purchase of a new or
refurbished covered electronic device (CED) and
specifies the amount of the CEW recycling fee ranging
from $6 to $10 for each CED depending on the screen
size. (Public Resources Code �42464).
b) Requires all fees collected pursuant to the Act to be
deposited in the Electronic Waste and Recovery and
Recycling Account, and authorizes those monies to be
appropriated for the following purposes:
i) To pay refunds of the CEW recycling fee.
ii) To make electronic waste recovery payments to
an authorized collector of CEW.
iii) To make electronic waste recycling payments to CEW
recyclers.
iv) To make specified payments to manufacturers who
take back
CEW from consumers for the purpose of recycling
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the item. (�42476).
2) Pursuant to Department of Resources Recycling and Recovery
(DRRR) regulations (Chapter 8.2 of Division 7 of Title 14
of the California Code of Regulations, commencing with
�18660.5):
a) Provides that only CEW resulting from a California
source, and not CEW owned by a person in California but
used entirely outside California, is eligible for
recovery or recycling payments, and correspondingly
prohibits a CEW collector or recycler from requesting
payments for non-California CEW. (�18660.6).
b) Requires a CEW collector to make reasonable efforts
to determine if CEW it collects is from California or
non-California sources. These reasonable efforts
include, but are not limited to, conducting spot checks,
checking for a valid California identification, and
requiring additional documentation from collectors
delivering large numbers of CEW. (�18660.20(c)).
c) Requires CEW recyclers to ensure that recycling
payments are not claimed for non-California source
materials. (�18660.21(e)).
d) Requires DRRR to review payment claims made by CEW
collectors and recyclers and determine if a payment is
due under the Act, and authorizes DRRR to deny or adjust
payment for an incomplete or deficient payment claim.
(�18660.30).
e) Allows DRRR to conduct an audit of CEW collectors and
recyclers to determine compliance with the Act. If a
CEW collector or recycler fails to provide reasonable
access for audits, DRRR may revoke the collectors or
recyclers approval to participate in the payment program
and deny current and future claims for payment.
(�18660.9).
f) Allows a CEW recycler to file a formal appeal of a
denied or adjusted recycling payment claim within 30
days of the notice of denial or adjustment, specifies
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the required content of the appeal, and provides for a
hearing of the appeal before DRRR's director or
designee, who must issue a written decision stating the
factual and legal basis for the decision. (�18660.31).
This bill :
1) Clarifies that DRRR shall not pay an electronic waste
recycling payment or recovery payment for CEW generated
outside of the state and subsequently brought into the
state.
2) Requires DRRR to establish documentation requirements for
demonstrating that CEW was generated in California and
eligible for payment.
3) Requires DRRR to pay a CEW collector or recycler upon
completion of its review of a payment claim for 90 days or
less. DRRR may examine a payment claim to validate its
completeness, accuracy, truthfulness, and compliance with
applicable laws and regulations.
4) Permits DRRR to conduct a selective audit of authorized
collectors, covered CEW recyclers, or manufacturers to
determine whether recovery or recycling payments are being
paid by DRRR according to the requirements of the Act.
5) Provides that a CEW recycler wishing to contest the denial
or adjustment of a payment claim by DRRR must appeal that
action by filing a written appeal within 30 days of the
notice denying or adjusting the claim, and specifies the
required content of the appeal.
6) States that DRRR must provide a hearing to consider the
appeal and subsequently to issue a written decision stating
the factual and legal basis for the decision.
7) Specifies that these changes to the Act do not affect
administrative or legal enforcement actions filed or
pending before January 1, 2013, and must not prevent
administrative enforcement action taken before that date.
COMMENTS :
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1)Purpose of Bill . According to the author, AB 549 seeks to
address the problem of fraudulent claims for recycling or
recovery payments within the electronic waste recycling
program operated by DRRR. The bill seeks to codify numerous
regulations authorizing DRRR to conduct reviews of recycling
payment claims and to audit the operations of recyclers and
collectors. This bill also clarifies that covered
electronic waste must be from California.
2)Background of the Electronic Waste Recycling Act . In 2003,
California adopted the Electronic Waste Recycling Act of
2003 (Act) that established the nation's first electronic
waste recovery and recycling program on computer monitors,
laptop computers, televisions, and similar video display
devices. The Act established a funding mechanism to improve
and provide for the proper end-of-life management of certain
hazardous electronic products. The program is funded
through a fee paid by consumers of covered electronic
devices at the time of retail purchase.
CEW collectors are those individuals who collect,
consolidate, and transport CEW generated in California.
Collectors deliver the waste to CEW recyclers who receive,
process, and recycle the CEW. Both CEW collectors and
recyclers may submit payment claims to DRRR for
compensation. DRRR reviews the claims for compliance with
the Act and, if appropriate, makes payments to approved
collectors and recyclers that are intended to offset the net
cost of appropriate waste recovery, processing, and
recycling activities.
According to DRRR data, since January 2005 approximately 965
million pounds of claimed CEW have been recycled and over
$420 million in payments have been made to CEW collectors
and recyclers. There are approximately 600 approved CEW
collectors and 60 approved recyclers throughout the state.
As a side benefit, the state's CEW infrastructure also
recovers substantial quantities of miscellaneous electronic
waste not covered by the CEW payment system.
3)Fraudulent Claims and Noncompliance Cost the State .
According to DRRR statistics reflecting claims submitted
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from 2005 through part of 2010, DRRR has annually denied
between 2 percent and 12 percent of payment claims because
of non-compliance or significantly inconsistent (and
possibly fraudulent) documentation. Since 2005,
approximately $20 million in payment claims have been
denied-an average of 5% of total payments claimed.
A major issue with fraud involves electronic waste that is
brought in from out of state. The Act only allows payment
for CEW generated in California. DRRR regulations prohibit
payment for CEW owned by a person in California but used
entirely outside the state. However, some CEW collectors
and recyclers seek payment under the Act for out-of-state
electronic waste by submitting fraudulent documents claiming
that the waste was generated in California.
4)Deterring Fraudulent Claims . AB 549 requires DRRR to
establish documentation requirements to demonstrate that CEW
is eligible. Electronics not meeting these documentation
requirements would not receive payment.
5)Existing Regulations . Under existing regulations, DRRR is
authorized to review payment claims to ensure compliance
under the Act and to prevent fraud. As part of this review,
DRRR conducts spot-checking, which involves contacting the
sources of the CEW listed on the payment claim. DRRR may
also conduct audits to detect fraud, including examining
on-site activities or reviewing the subject's books or
accounts. The bill clarifies existing statutory authority
and support DRRR's authority to conduct reviews of payment
claims and to conduct audits necessary to increase detection
of fraudulent claims.
6)Related Legislation .
a) AB 794 (Wieckowski) provides similar processes for the
review of claims prior to making payments for covered
electronic devices. This bill was heard in this
Committee June 20, 2011, subsequently amended to address
other issues, and is in the Senate Rules Committee.
b) AB 583 (Knight) of 2011 seeks to transfer the duties,
powers, and authority of the DTSC under the Electronic
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Waste Recycling Act to DRRR. An Assembly Environmental
Safety and Toxic Materials Committee hearing was canceled
at the author's request.
c) AB 960 (Bonnie Lowenthal) of 2011 seeks to revise the
requirements imposed on exportation of CEW to
additionally include a person who exports electronic
waste or a previously used electronic device and would
also include, in the provision, an export intended for
reuse. AB 960 is on Senate Appropriations Committee
suspense file.
7)Amendments Needed . This bill amends several code sections
also amended by AB 960 (Lowenthal), and will need to be
addressed to avoid chaptering out issues. Amendments are
also needed to change "CalRecycle" to "Department of
Resources Recycling and Recovery," the agency's statutory
name.
SOURCE : Assemblymember Carter
SUPPORT : None on file.
OPPOSITION : None on file.