BILL ANALYSIS �
AB 794
Page 1
ASSEMBLY THIRD READING
AB 794 (Wieckowski)
As Amended May 3, 2011
Majority vote
NATURAL RESOURCES 9-0 JUDICIARY 9-0
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|Ayes:|Chesbro, Knight, |Ayes:|Feuer, Wagner, Atkins, |
| |Brownley, Dickinson, | |Dickinson, Huber, |
| |Grove, Halderman, | |Huffman, Jones, Monning, |
| |Huffman, Monning, Skinner | |Wieckowski |
|-----+--------------------------+-----+--------------------------|
| | | | |
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APPROPRIATIONS 17-0
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|Ayes:|Fuentes, Harkey, | | |
| |Blumenfield, Bradford, | | |
| |Charles Calderon, Campos, | | |
| |Davis, Donnelly, Gatto, | | |
| |Hall, Hill, Lara, | | |
| |Mitchell, Nielsen, Norby, | | |
| |Solorio, Wagner | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Imposes civil liability against a covered electronic
waste (CEW) recycler or collector who makes a false statement or
representation for purposes of compliance with the Electronic
Waste Recycling Act (Act). Codifies regulations that describe
the type of CEW that may receive payment under the Act.
Codifies regulations authorizing the Department of Resources
Recycling and Recovery (CalRecycle) to conduct reviews and
audits related to the operations of CEW recyclers and
collectors. Specifically, this bill:
1)Authorizes civil liability in an amount of up to $25,000 per
violation, which may be imposed administratively by
CalRecycle, against any person, including a CEW collector or
recycler, who makes a false statement or representation in any
document used for purposes of compliance with the Act. Civil
liability may not be imposed if the CEW collector or recycler
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made verifiable and reasonable efforts to determine the source
of the CEW.
2)Authorizes CalRecycle to revoke the approval or deny the
renewal application of a CEW collector or recycler who wishes
to participate in the Act's program if he/she makes a false
statement or representation in a document used for purposes of
compliance with the Act or if he/she has a history
demonstrating a pattern of operation in conflict with the
requirements of the Act.
3)Allows CalRecycle to pay a CEW collector or recycler if the
CEW is generated by a person who used the covered electronic
devices (CED) while located in this state. Allows payment for
source-anonymous CEW under limited circumstances, as
specified.
4)Allows CalRecycle to examine a payment claim to validate
completeness, accuracy, truthfulness, and compliance with
applicable laws and regulations.
5)Allows CalRecycle to conduct audits of CEW collectors and
recyclers to determine whether recovery or recycling payments
are being paid by CalRecycle according to the requirements of
the Act. CalRecycle may collect and recover any moneys
improperly paid with interest.
EXISTING LAW :
1)Establishes the Act for the purpose of providing a cost free
and convenient means for consumers to return, recycle, and
ensure the safe and environmentally-sound disposal of covered
electronic devices (CED). A CED is a video display device
containing a screen greater than four inches, measured
diagonally. 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. 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.
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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, a CEW collector to make
reasonable efforts to determine if CEW it collects is from
California or non-California sources.
5)Requires, pursuant to regulations, a CEW recycler to ensure
that recycling payments are not claimed for non-California
source materials.
6)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. CalRecycle may
deny or adjust payment for an incomplete or deficient payment
claim.
7)Allows, pursuant to regulations, CalRecycle 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, CalRecycle may revoke the
collectors or recyclers approval to participate in the payment
program and deny current and future claims for payment.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, one-time costs to CalRecycle in 2011-12, ranging from
$50,000 to $150,000, to conduct a rulemaking procedure to
establish a framework to implement and regulate CalRecycle civil
penalty authority. (Electronic Waste and Recycling Recovery
Account (EWRRA).) Ongoing annual costs to CalRecycle starting
in 2012-13, ranging from $500,000 to $725,000, equivalent to
four to five positions, to investigate potentially fraudulent
activity, assess and collect penalties, hear appeals and
participate in litigation. (EWRRA.) Annual increased civil
penalty revenue to CalRecycle, starting in 2012-13, of an
unknown amount but potentially in the low hundred thousands of
dollars, available to CalRecycle upon appropriation. (EWWRRA.)
COMMENTS : CEW collectors under the Act provide a free and
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convenient system for collecting, consolidating, and
transporting CEW generated in the state. CEW collectors then
deliver the waste to CEW recyclers who receive, process, and
recycle the CEW. The CEW collectors and recyclers submit
payment claims to CalRecycle for compensation. CalRecycle
reviews the claims for compliance with the Act and, if
appropriate, makes payments to the CEW collectors and recyclers.
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. The Act has created
jobs and fostered California's electronic waste and recycling
infrastructure with approximately 600 approved CEW collectors
and 60 approved recyclers throughout the state. The state's CEW
infrastructure also recovers substantial quantities of
miscellaneous electronic waste not covered by the CEW payment
system.
CalRecycle has annually denied 2% to 12% of submitted payment
claims because of non-compliance or significantly inconsistent
(and possibly fraudulent) documentation. Since 2005,
approximately $20 million in payment claims have been denied.
In addition, some believe that millions of dollars have been
paid out for fraudulent claims that were undetected by the
state.
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. Regulations prohibit payment for
CEW owned by a person in California but used entirely outside of
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. CalRecycle reviews 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. Under regulations, CalRecycle can also conduct audits to
detect fraud.
The bill codifies CalRecycle's review and audit regulations.
Codifying these regulations will prevent any legal challenge
against the validity of CalRecycle's authority to conduct
reviews and audits to detect fraud and malfeasance.
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The bill also provides CalRecycle with significant
administrative authority to punish and deter fraud by allowing
CalRecycle to impose up to $25,000 in fines per violation
against a CEW collector or recycler who makes a false statement
in a document submitted pursuant to the Act. Additionally, the
bill authorizes CalRecycle to exclude a collector or recycler
from the CEW program who has committed fraud or has a history
demonstrating malfeasance under the Act.
Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916)
319-2092
FN: 0001139