Amended in Senate June 24, 2014

Amended in Assembly April 22, 2014

Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1846

Introduced by Assembly Member Gordon

(Principal coauthor: Assembly Member Quirk)

February 19, 2014

An act to amend Sections 14538, 14539, 14591.2, and 14594.5 of, and to add Section 14515.2 to, the Public Resources Code, relating to beverage containers.

LEGISLATIVE COUNSEL’S DIGEST

AB 1846, as amended, Gordon. Beverage containers: enforcement.

The California Beverage Container Recycling and Litter Reduction Act requires a distributor of specified beverage containers to pay a redemption payment to the Department of Resources Recycling and Recovery for each beverage container sold or transferred, for deposit in the California Beverage Container Recycling Fund. The act requires the department to pay handling fees to supermarket sites, rural region recyclers, and nonprofit convenience zone recyclers for every beverage container redeemed by the certified recycling center.

Existing law prohibits a certified recycling center or processor from paying any refund values, processing payments, or administrative fees on, or making claims on, empty beverage containers that the certified recycling center or processor knew or should have known were coming from out of state, or from making claims on beverage containers that the certified recycling center or processor knew, or should have known, were received from a noncertified recycler.

The bill would extend these prohibitions to beverage containers that the certified recycling center or processor knew, or should have known, were otherwise ineligible for redemption.

Existing law authorizes the department to take specified disciplinary actions against any party responsible for directing, contributing to, participating in, or otherwise influencing the operations of a certified or registered facility or program under specified circumstances.

This bill would specify an additional disciplinary action, authorizing the department under those circumstances to suspend or permanently revoke eligibility of a supermarket site, rural region recycler, or a nonprofit convenience zone recycler to receive handling fees at one or more of a certificate holder’s certified recycling centers.

Existing law imposes criminal and civil penalties for specified violations of the act, including as actions subject to criminal penalties, the redemption of out-of-state containers, as defined. Existing law generally authorizes the department to impose a civil penalty of up to $1,000 or $5,000 for each violation, but authorizes the department to assess a civil penalty of up to $10,000 per transaction, or an amount equal to 3 times the damages, plus costs, for a person who redeems, or assists in the redemption of, previously redeemed containers.

This bill would additionally authorize the department to assess a civil penalty of up to $10,000 per transaction or 3 times the damages, plus costs, upon a person who redeems, attempts to redeem, or aids in the redemption of, otherwise ineligible beverage containers, including, but not limited to, out-of-state containers and empty beverage container materials imported from out-of-state.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 14515.2 is added to the Public Resources
Code, to read:

14515.2.  

“Person” means any individual, corporation,
operation, or entity, whether or not certified or registered pursuant
to this division.

SEC. 2.  

Section 14538 of the Public Resources Code is
amended to read:

14538.  

(a) (1) The department shall certify an operator of a
recycling center pursuant to this section.

(2) The department shall review whether an application for
certification or renewal is complete within 30 working days of
receipt, including compliance with subdivision (c). If the
department deems an application complete, the department shall
approve or deny the application no later than 60 calendar days
after the date when the application was deemed complete.

(b) The director shall adopt, by regulation, a procedure for the
certification of recycling centers, including standards and
requirements for certification. These regulations shall require that
all information be submitted to the department under penalty of
perjury. A recycling center shall meet all of the standards and
requirements contained in the regulations for certification. The
regulations shall require, but shall not be limited to requiring, that
all of the following conditions be met for certification:

(1) The operator of the recycling center demonstrates, to the
satisfaction of the department, that the operator will operate in
accordance with this division.

(2) If one or more certified entities have operated at the same
location within the past five years, the operations at the location
of the recycling center exhibit, to the satisfaction of the department,
a pattern of operation in compliance with the requirements of this
division and regulations adopted pursuant to this division.

(3) The operator of the recycling center notifies the department
promptly of any material change in the nature of his or her
operations that conflicts with information submitted in the
operator’s application for certification.

(c) (1) An applicant for certification as a recycling center, and
a recycling center applying for renewal of a certification, shall
complete the precertification training program required by this
subdivision and meet all other qualification requirements prescribed
by the department, which may include, but are not limited to,
requiring the applicant to obtain a passing score on an examination
administered by the department.

(2) The department may use staff or industry experts, or may
seek expertise available in other state agencies, to provide the
training program required by this subdivision, which shall include
providing technical assistance to better prepare recycling centers
for successful participation in this division, thereby reducing the
potential for errors, fraud, or other activities that compromise the
integrity of the implementation of this division.

(d) A certified recycling center shall comply with all of the
following requirements for operation:

(1) The operator of the recycling center shall not pay a refund
value for, or receive a refund value from any processor for, any
food or drink packaging material or any beverage container or
other product that does not have a refund value established pursuant
to Section 14560.

(2) The operator of a recycling center shall take actions that
satisfy the department to prevent the payment of a refund value
for any food or drink packaging material or any beverage container
or other product that does not have a refund value established
pursuant to Section 14560.

(3) Unless exempted pursuant to subdivision (b) of Section
14572, a certified recycling center shall accept, and pay at least
the refund value for, all empty beverage containers, regardless of
type.

(4) A certified recycling center shall not pay any refund values,
processing payments, or administrative fees to a noncertified
recycler.

(5) A certified recycling center shall not pay any refund values,
processing payments, or administrative fees on empty beverage
containers or other containers that the certified recycling center
knew, or should have known, were coming into the state from out
of the state, or are otherwise ineligible for redemption.

(6) A certified recycling center shall not claim refund values,
processing payments, or administrative fees on empty beverage
containers that the certified recycling center knew, or should have
known, were received from noncertified recyclers or on beverage
containers that the certified recycling center knew, or should have
known, come from out of the state, or are otherwise ineligible for
redemption.

(7) A certified recycling center shall prepare and maintain the
following documents involving empty beverage containers, as
specified by the department by regulation:

(A) Shipping reports that are required to be prepared by the
recycling center, or that are required to be obtained from other
recycling centers.

(B) Consumer transaction receipts.

(C) Consumer transaction logs.

(D) Rejected container receipts on materials subject to this
division.

(E) Receipts for transactions with beverage manufacturers on
materials subject to this division.

(F) Receipts for transactions with beverage distributors on
materials subject to this division.

(G) Documents authorizing the recycling center to cancel empty
beverage containers.

(H) Weight tickets.

(8) In addition to the requirements of paragraph (7), a certified
recycling center shall cooperate with the department and make
available its records of scrap transactions when the review of these
records is necessary for an audit or investigation by the department.

(e) The department may recover, in restitution pursuant to
paragraph (5) of subdivision (c) of Section 14591.2, payments
made from the fund to the certified recycling center pursuant to
Section 14573.5 that are based on the documents specified in
paragraph (7), that are not prepared or maintained in compliance
with the department’s regulations, and that do not allow the
department to verify claims for program payments.

(f) The department may certify a recycling center that will
operate less than 30 hours a week, as specified in paragraph (2) of
subdivision (b) of Section 14571.

SEC. 3.  

Section 14539 of the Public Resources Code is
amended to read:

14539.  

(a) (1) The department shall certify processors pursuant
to this section.

(2) The department shall review whether an application for
certification or renewal is complete within 30 working days of
receipt, including compliance with subdivision (c). If the
department deems an application complete, the department shall
approve or deny the application no later than 60 calendar days
after the date when the application was deemed complete.

(b) The director shall adopt, by regulation, requirements and
standards for certification. The regulations shall require, but shall
not be limited to requiring, that all of the following conditions be
met for certification:

(1) The processor demonstrates to the satisfaction of the
department that the processor will operate in accordance with this
division.

(2) If one or more certified entities have operated at the same
location within the past five years, the operations at the location
of the processor exhibit, to the satisfaction of the department, a
pattern of operation in compliance with the requirements of this
division and regulations adopted pursuant to this division.

(3) The processor notifies the department promptly of any
material change in the nature of the processor’s operations that
conflicts with the information submitted in the operator’s
application for certification.

(c) (1) An applicant for certification as a processor and a
processor applying for renewal of a certification shall complete
the precertification training program required by this subdivision
and meet all other qualification requirements prescribed by the
department, which may include, but are not limited to, requiring
the applicant to obtain a passing score on an examination
administered by the department.

(2) The department may use staff or industry experts, or may
seek expertise available in other state agencies, to provide the
training program required by this subdivision, which shall include
providing technical assistance to better prepare processors for
successful participation in this division, thereby reducing the
potential for errors, fraud, or other activities which compromise
the integrity of the implementation of this division.

(d) A certified processor shall comply with all of the following
requirements for operation:

(1) The processor shall not pay a refund value for, or receive a
refund value from the department for, any food or drink packaging
material or any beverage container or other product that does not
have a refund value established pursuant to Section 14560.

(2) The processor shall take those actions that satisfy the
department to prevent the payment of a refund value for any food
or drink packaging material or any beverage container or other
product that does not have a refund value established pursuant to
Section 14560.

(3) Unless exempted pursuant to subdivision (b) of Section
14572, the processor shall accept, and pay at least the refund value
for, all empty beverage containers, regardless of type, for which
the processor is certified.

(4) A processor shall not pay any refund values, processing
payments, or administrative fees to a noncertified recycler. A
processor may pay refund values, processing payments, or
administrative fees to any entity that is identified by the department
on its list of certified recycling centers.

(5) A processor shall not pay any refund values, processing
payments, or administrative fees on empty beverage containers or
other containers that the processor knew, or should have known,
were coming into the state from out of the state, or are otherwise
ineligible for redemption.

(6) A processor shall not claim refund values, processing
payments, or administrative fees on empty beverage containers
that the processor knew, or should have known, were received
from noncertified recyclers or on beverage containers that the
processor knew, or should have known, come from out of the state,
or are otherwise ineligible for redemption. A processor may claim
refund values, processing payments, or administrative fees on any
empty beverage container that does not come from out of the state
and that is received from any entity that is identified by the
department on its list of certified recycling centers.

(7) A processor shall take the actions necessary and approved
by the department to cancel containers to render them unfit for
redemption.

(8) A processor shall prepare or maintain the following
documents involving empty beverage containers, as specified by
the department by regulation:

(A) Shipping reports that are required to be prepared by the
processor or that are required to be obtained from recycling centers.

(B) Processor invoice reports.

(C) Cancellation verification documents.

(D) Documents authorizing recycling centers to cancel empty
beverage containers.

(E) Processor-to-processor transaction receipts.

(F) Rejected container receipts on materials subject to this
division.

(G) Receipts for transactions with beverage manufacturers on
materials subject to this division.

(H) Receipts for transactions with distributors on materials
subject to this division.

(I) Weight tickets.

(9) In addition to the requirements of paragraph (7), a processor
shall cooperate with the department and make available its records
of scrap transactions when the review of these records is necessary
for an audit or investigation by the department.

(e) The department may recover, in restitution pursuant to
paragraph (5) of subdivision (c) of Section 14591.2, any payments
made by the department to the processor pursuant to Section 14573
that are based on the documents specified in paragraph (8) of
subdivision (d), that are not prepared or maintained in compliance
with the department’s regulations, and that do not allow the
department to verify claims for program payments.

SEC. 4.  

Section 14591.2 of the Public Resources Code is
amended to read:

14591.2.  

(a) The department may take disciplinary action
against any party responsible for directing, contributing to,
participating in, or otherwise influencing the operations of a
certified or registered facility or program. A responsible party
includes, but is not limited to, the certificate holder, registrant,
officer, director, or managing employee. Except as otherwise
provided in this division, the department shall provide a notice
and hearing in accordance with Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code before taking any disciplinary action against a certificate
holder.

(b) All of the following are grounds for disciplinary action, in
the form determined by the department in accordance with
subdivision (c):

(1) The responsible party engaged in fraud or deceit to obtain
a certificate or registration.

(2) The responsible party engaged in dishonesty, incompetence,
negligence, or fraud in performing the functions and duties of a
certificate holder or registrant.

(3) The responsible party violated this division or any regulation
adopted pursuant to this division, including, but not limited to, any
requirements concerning auditing, reporting, standards of operation,
or being open for business.

(4) The responsible party is convicted of any crime of moral
turpitude or fraud, any crime involving dishonesty, or any crime
substantially related to the qualifications, functions, or duties of a
certificate holder.

(c) The department may take disciplinary action pursuant to this
section, by taking any one of, or any combination of, the following:

(1) Immediate revocation of the certificate or registration, or
revocation of a certificate or registration as of a specific date in
the future.

(2) Immediate suspension of the certificate or registration for a
specified period of time, or suspension of the certificate or
registration as of a specific date in the future. Notwithstanding
subdivision (a), the department may impose a suspension of five
days or less through an informal notice, if the action is subject to
a stay on appeal, pending an informal hearing convened in
accordance with Article 10 (commencing with Section 11445.10)
of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government
Code.

(3) Imposition on the certificate or registration of any condition
that the department determines would further the goals of this
division.

(4) Issuance of a probationary certificate or registration with
conditions determined by the department.

(5) Collection of amounts in restitution of any money improperly
paid to the certificate holder or registrant from the fund.

(6) Imposition of civil penalties pursuant to Section 14591.1.

(7) Suspension for a specified period of time or permanent
revocation of eligibility of a supermarket site, rural region recycler,
or a nonprofit convenience zone recycler to receive handling fees
at one or more of the certificate holder’s certified recycling centers.

(d) The department may do any of the following in taking
disciplinary action pursuant to this section:

(1) If a certificate holder or registrant holds certificates or is
registered to operate at more than one site or to operate in more
than one capacity at one location, such as an entity certified as
both a processor and a recycling center, the department may
simultaneously revoke, suspend, or impose conditions upon some,
or all of, the certificates held by the responsible party.

(2) If the responsible party is an officer, director, partner,
manager, employee, or the owner of a controlling ownership
interest of another certificate holder or registrant, that other
operator’s certificate or registration may also be revoked,
suspended, or conditioned by the department in the same
proceeding, if the other certificate holder or registrant is given
notice of that proceeding, or in a subsequent proceeding.

(3) (A) If, pursuant to notice and a hearing conducted by the
director or the director’s designee in accordance with Article 10
(commencing with Section 11445.10) of Chapter 4.5 of Part 1 of
Division 3 of Title 2 of the Government Code, the department
determines that the continued operation of a certified or registered
entity poses an immediate and significant threat to the fund, the
department may order the immediate suspension of the certificate
holder or registrant, pending revocation of the certificate or
registration, or the issuance of a probationary certificate imposing
reasonable terms and conditions. The department shall record the
testimony at the hearing and, upon request, prepare a transcript.
For purposes of this section, an immediate and significant threat
to the fund means any of the following:

(i) A loss to the fund of at least ten thousand dollars ($10,000)
during the six-month period immediately preceding the order of
suspension.

(ii) Missing or fraudulent records associated with a claim or
claims totaling at least ten thousand dollars ($10,000) during the
six-month period immediately preceding the order of suspension.

(iii) A pattern of deceit, fraud, or intentional misconduct in
carrying out the duties and responsibilities of a certificate holder
during the six-month period immediately preceding the order of
suspension. For purposes of this section, a pattern of deceit, fraud,
or intentional misconduct in carrying out the duties of a certificate
holder includes, but is not limited to, the destruction or concealment
of any records six months immediately preceding the order of
suspension.

(iv) At least three claims submitted for ineligible material in
violation of this division, including, but not limited to, a violation
of Section 14595.5, during the six-month period immediately
preceding the order of suspension.

(B) An order of suspension or probation may be issued to any
or all certified or registered facilities or programs operated by a
person or entity that the department determines to be culpable or
responsible for the loss or conduct identified pursuant to
subparagraph (A).

(C) The order of suspension or issuance of a probationary
certificate imposing terms or conditions shall become effective
upon written notice of the order to the certificate holder or
registrant. Within 20 days after notice of the order of suspension,
the department shall file an accusation seeking revocation of any
or all certificates or registrations held by the certificate holder or
registrant. The certificate holder or registrant may, upon receiving
the notice of the order of suspension or probation, appeal the order
by requesting a hearing in accordance with Chapter 5 (commencing
with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code. A request for a hearing or appeal from an order
of the department does not stay the action of the department for
which the notice of the order is given. The department may
combine hearings to appeal an order of suspension and a hearing
for the proposed revocation of a certificate or registration into one
proceeding.

(D) Nothing in this section shall prohibit the department from
immediately revoking a probationary certificate pursuant to
subdivision (b) of Section 14541 or from taking other disciplinary
action pursuant to Section 14591.2.

SEC. 5.  

Section 14594.5 of the Public Resources Code is
amended to read:

14594.5.  

begin insert (a) end insert begin insert   end insert Notwithstanding Section 14591.1, the department
may assess upon any person, entity, or operation that redeems,
attempts to redeem, or aids in the redemption of, empty beverage
containers that have already been redeemed, or redeems, attempts
to redeem, or aids in the redemption of, otherwise ineligible
beverage containers, including, but not limited to, out-of-state
containers or empty beverage container materials imported from
out-of-state, a civil penalty of up to ten thousand dollars ($10,000)
per transaction, or an amount equal to three times the damage or
potential damage, whichever is greater, plus costs as provided in
Section 14591.3, pursuant to notice and hearing in accordance
with Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code.

begin insert

(b) For purposes of this section, the act of labeling a beverage
container pursuant to subdivision (a) of Section 14561 shall not,
in and of itself, be deemed to aid in the redemption of ineligible
beverage containers.

end insert