BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2666
                                                                  Page  1

          Date of Hearing:   April 30, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    AB 2666 (Daly) - As Amended:  April 22, 2014 

          Policy Committee:                              Natural  
          ResourcesVote:9-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill exempts the United States (US) and its agencies and  
          instrumentalities from the requirements of the Electronic Waste  
          Recycling Act (Act).

           FISCAL EFFECT  

          Unknown revenue loss to CalRecycle in the $100,000 to $200,000  
          range (Electronic Waste and Recovery and Recycling Account).

          Due to surpluses in this fund, the e-waste fees were reduced  
          from $6 ,$8 and $10 (based on screen size) to $3, $4  and $5 in  
          January 2013.   Excess reserves in the fund are anticipated to  
          be approximately $50 million in 2014-15.

           COMMENTS  

           1)Rationale.   Under the Supremacy Clause of the US Constitution,  
            the US government is immune from taxation.  However, the  
            federal Resource Conservation and Recovery Act (RCRA)  
            specifies that US government entities are required to pay  
            "regulatory fees," as determined by federal law.  

            In May 2001, the US Government Accountability Office (GAO)  
            issued a decision that California's e-waste fee is a tax under  
            federal law; therefore, US government entities are not subject  
            to the fee.  This bill aligns California statute with federal  
            law as it relates to collection of the e-waste fee.  

           2)Background.   In 2001, the Department of Toxic Substances  
            Control (DTSC) determined that cathode ray tube (CRT) screens  








                                                                  AB 2666
                                                                  Page  2

            are hazardous, and as such, must be managed as hazardous waste  
            when disposed.  In response to this determination, the  
            Legislature enacted SB 20 and SB 50 (Sher) in 2003, which  
            established the Act to create a cost-free and convenient way  
            for consumers to return, recycle, and ensure the safe and  
            environmentally-sound disposal of hazardous video display  
            devices. The Act imposes a fee on every consumer at the point  
            of sale.  The Board of Equalization (BOE) deposits the fee  
            revenue into the Electronic Waste and Recovery and Recycling  
            Account, which may be spent solely for activities that relate  
            to reuse, recycling, and proper disposal. 



           3)Fee or Tax  ?  BOE staff considers the fee to be a  
            nondiscriminatory charge assessed in connection with  
            California's hazardous waste regulatory program.  Accordingly,  
            BOE staff assert that the federal government should pay the  
            fee because Congress expressly waived sovereign immunity when  
            it enacted RCRA in 1976.

            However, the federal government considers the fee to be a tax  
            and does not reimburse retailers.  Although existing law  
            requires the consumer (e.g. federal government) to pay the  
            fee, the law requires the retailer to collect and remit the  
            fee to the BOE.  The retailer must remit the fee to the BOE,  
            regardless of whether the retailer is able to collect the fee  
            from the federal government.
                 

           Analysis Prepared by  :    Jennifer Galehouse / APPR. / (916)  
          319-2081