BILL ANALYSIS �
AB 549
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CONCURRENCE IN SENATE AMENDMENTS
AB 549 (Carter and Wieckowski)
As Amended August 23, 2012
Majority vote
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|ASSEMBLY: |78-0 |(May 19, 2011) |SENATE: |30-5 |(August 28, |
| | | | | |2012) |
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Original Committee Reference: NAT. RES.
SUMMARY : Makes various changes to the Electronic Waste
Recycling Act (Act) to strengthen fraud prevention and audit
functions within the Department of Resources Recovery and
Recycling (CalRecycle).
The Senate amendments :
1)Clarify that CalRecycle shall not pay an electronic waste
recycling payment or recovery payment for covered electronic
waste (CEW) generated outside of the state and subsequently
brought into the state.
2)Require CalRecycle to establish documentation requirements to
demonstrate that CEW was generated in California and eligible
for payment.
3)Require CalRecycle to pay a CEW collector or recycler upon
completion of its review of a payment claim within 90 days.
CalRecycle may examine a payment claim to validate its
completeness, accuracy, truthfulness, and compliance with
applicable laws and regulations.
4)Permit CalRecycle to conduct a selective audit of authorized
collectors, covered CEW recyclers, or manufacturers to
determine whether recovery or recycling payments are being
paid by CalRecycle in accordance with the Act.
5)Requires that a hearing for an administrative appeal
challenging certain actions be held before the Director of
CalRecycle, who shall issue a written decision stating the
factual and legal basis of its decision.
6)Specify that these changes to the Act do not affect
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administrative or legal enforcement actions filed or pending
before January 1, 2013, and do not prevent administrative
enforcement action taken before that date.
AS PASSED BY THE ASSEMBLY , this bill:
1)Authorized CalRecycle to pay a CEW recovery or recycling
payment only if, among other conditions, the covered
electronic device (CED) for which the payment is claimed was
used in the state.
2)Authorized CalRecycle to review required documentation
submitted by a CEW collector or recycler before making a
payment under the Act. CalRecycle may refuse to make a
payment to a CEW collector or recycler if required
documentation is incomplete or otherwise not in compliance
with the Act.
EXISTING LAW :
1)Establishes the Act with the purpose of providing a cost-free
and convenient means for consumers to return, recycle, and
ensure the safe and environmentally-sound disposal of CEDs.
Defines a CED as a video display device containing a screen
greater than four inches, measured diagonally. A CED that is
discarded is considered CEW.
2)Requires a consumer to pay a CEW recycling fee upon the
purchase of a new or refurbished CED at the time of the retail
sale. The CEW recycling fee ranges from $6 to $10 for each
CED depending on the screen size and is used primarily to pay
CEW collectors and recyclers.
3)Provides payment to CEW collectors and recyclers for costs
associated with collecting and recycling CEW that has been
generated in the state. Regulations expressly prohibit a CEW
collector or recycler from requesting payments for
non-California CEW. CEW owned by a person in California but
used entirely outside of the state is not eligible for
payment.
4)Requires, pursuant to regulations, CalRecycle to review
payment claims made by CEW collectors and recyclers and
determine if a payment is due under the Act. If CalRecycle
has cause to investigate any aspect of a claim, the review may
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be extended until resolution of all issues under
investigation. CalRecycle may deny or adjust payment for,
among other things, the payment claim being deficient with
regard to CEW source documentation.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, this bill has
negligible state costs.
COMMENTS : According to the author, this bill seeks to address
the problem of fraudulent claims for recycling or recovery
payments within the electronic waste recycling program. The
bill codifies numerous regulations authorizing CalRecycle to
conduct reviews of recycling payment claims and to audit the
operations of recyclers and collectors. This bill also
clarifies that CEW must be from California.
In 2003, the Act established the country'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 CEDs at the time of 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
material. Both CEW collectors and recyclers may submit payment
claims to CalRecycle for compensation. CalRecycle 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 CalRecycle 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. Statistics reflecting claims
submitted from 2005 through 2010 indicate that CalRecycle
annually denied between 2% and 12% of payment claims due to
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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.
The most significant potential for fraud involves electronic
waste that is brought in from out of state. The Act only allows
payment for CEW generated in California. CalRecycle 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.
This bill requires CalRecycle to establish documentation
requirements to demonstrate that CEW is eligible. Electronics
not meeting these documentation requirements would not receive
payment.
Under existing regulations, CalRecycle is authorized to review
payment claims to ensure compliance under the Act and to prevent
fraud. As part of this review, CalRecycle conducts
spot-checking, which involves contacting the sources of the CEW
listed on the payment claim. CalRecycle may also conduct
audits, including examining on-site activities and reviewing the
books. The bill clarifies existing statutory authority and
codifies CalRecycle's authority to conduct reviews of payment
claims and to conduct audits necessary to increase detection of
fraudulent claims.
Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916)
319-2092
FN: 0005776