AB 1239
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Date of Hearing: April 27, 2015
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
AB 1239 (Gordon) – As Amended April 21, 2015
SUBJECT: Tire recycling: California tire regulatory fee
SUMMARY: Establishes the Tire Recycling Incentive Program (TRIP) Act to provide
incentives for tire recycling activities in California. Establishes a new tire regulatory fee, set by
the Department of Resources Recycling and Recovery (CalRecycle), to cover its regulatory costs
associated with waste and used tire management.
EXISTING LAW:
1) Pursuant to the California Integrated Waste Management Act of 1989, establishes a state
policy goal that 75% of solid waste generated be diverted from landfill disposal by 2020.
2) Establishes the California Tire Recycling Act (Act), which:
a) Requires a person who purchases a new tire to pay a California tire fee of $1.75 for each
new tire purchased in the state. One dollar of which is deposited into the Tire Recycling
Fund for oversight, enforcement, and market development grants relating to waste tire
management and recycling. The remaining $0.75 is deposited into the Air Pollution
Control Fund for programs and projects that mitigate or remediate air pollution caused by
tires.
b) Reduces the fee on January 1, 2024 to $0.75 per tire, to be deposited into the Tire
Recycling Fund.
c) Authorizes CalRecycle to award grants, loans, subsidies, and rebates and pay incentives
for various purposes related to reducing landfill disposal of waste tires.
d) Requires CalRecycle to adopt a Five Year Plan, which must be updated every two years,
that establishes goals and priorities for the waste tire program.
e) Defines "waste tire generator" as any person whose act or process produces any amount
of waste or used tires, or causes a waste or used tire hauler to transport those waste or
used tires, or otherwise causes waste or used tires to become subject to regulation.
THIS BILL establishes the TRIP, which:
1) Requires CalRecycle to establish a tire recycling incentive program to award payments to
eligible recipients, as determined by CalRecycle, in the following manner:
a) To cities, counties, other local government agencies, and school districts to fund
construction projects that use recycled tires.
b) To state and local government agencies, including regional park districts, to fund
disability access projects at parks and bikeways.
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c) To a private manufacturer who produces a consumer product using recycled tires in
California.
2) Requires CalRecycle to award $2 for every 12 pounds of crumb rubber used by the eligible
recipient and authorizes CalRecycle to adjust this amount if it determines the adjustment
would further the purposes of CalRecycle's tire program.
3) Requires CalRecycle to annually allocate $30 million for the Program, unless or until the
California tire fee becomes less than $1.75.
4) Requires any waste tire generator to pay a California tire regulatory fee at an amount to be
determined by CalRecycle pursuant to the following:
a) For a waste tire generator that is a retail seller of new tires to end purchasers at an amount
sufficient to generate revenues equivalent to the reasonable regulatory costs incurred by
CalRecycle for audits, inspections, administrative costs, adjudications, manifesting,
registration, and other regulatory activities regarding the generators, but not to exceed
$1.25 per tire. Authorizes CalRecycle to establish different fees based on the type of
retail seller depending on the nature of the activity, number of tires generated, and other
appropriate factors.
b) For a waste tire generator that is not a retail seller at an amount sufficient to generate
revenues equivalent to the reasonable regulatory costs incurred by CalRecycle for audits,
inspections, administrative costs, adjudications, manifesting, registration, and other
regulatory activities regarding the generators. Authorizes CalRecycle to establish
different fees based on the type of retail seller depending on the nature of the activity,
number of tires generated, and other appropriate factors.
c) Specifies that the "aggregate amount" of the regulatory fees shall not exceed the
aggregate reasonable regulatory costs incurred by CalRecycle.
5) Requires the waste tire generator to remit the regulatory fee quarterly.
6) Makes corresponding changes to the provision of law that replaces current law on January 1,
2024.
FISCAL EFFECT: Unknown
COMMENTS:
1) Author's statement:
AB 1239 by Assembly Member Gordon and Speaker Atkins will help expand the state's
tire recycling infrastructure to reduce greenhouse gases, create jobs, and cut the statewide
and local costs associated with tire pile cleanup.
AB 1239 proposes to establish a Tire Recycling Incentive Program to provide an
incentive payment for end-users of recycled tires (including local governments that use
tires as rubberized pavement as well as manufacturers who produce products using
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recycled tires.) AB 1239 will also give CalRecycle the authority to increase the state tire
fee to cover the costs of regulating waste tires (in an amount not to exceed $1.25/tire.)
2) Tire management in California. According to CalRecycle, approximately 40 million waste
tires are generated in California every year. CalRecycle's diversion goal is 90%; according to
the California Waste Tire Market Report: 2013, California has achieved an overall diversion
rate of 87.3%. Of the of the 40.8 million tires generated: 12.3 million were exported (for fuel
or reuse); 7.9 million were recycled as ground rubber; 0.5 million were used in civil
engineering projects; 6.6 million were reused (either sold as used tires or retreaded); 8.2
million were used as tire derived fuel in cement kilns or at co-generation facilities; 1.2
million were used as cover at landfills; and, 5.3 million were disposed in landfills.
CalRecycle's "affiliated goals" to achieve its 90% diversion rate for tires are: 1) develop
long-term, sustainable, and diversified market demand for California tire-derived products; 2)
ensure the protection of public health, safety, and the environment while developing a safe
and high-quality supply infrastructure to meet that demand; and, 3) foster information flow
and technology and product development so that environmental protection and diversion
goals are achieved with supply and demand in balance.
CalRecycle is in the process of adjusting its waste tire market development programs, in
accordance with its Five Year Plan, to more effectively focus CalRecycle resources on
diversifying and expanding markets. CalRecycle has also indicated a long-term vision of
increasing tire recycling, rather than just diversion. Specifically, CalRecycle has begun
crafting a new incentive program that would differentiate incentive payments, with higher
payments going to "preferred end-users" that recycle waste tires into new products such as
rubberized asphalt concrete, moderate payments for end uses such as tire-derived aggregate,
and lower payments for less-preferred non-disposal management such as energy generation.
CalRecycle's analysis of past grants indicates that about 25% of the total sales of Californiaproduced tire-derived products were supported by grants, while about 12.5% of California
crumb rubber sold to paving applications was supported by CalRecycle paving grants. In
order to achieve CalRecycle's long-term goals for tire recycling, it is in the process of
redirecting approximately half of its budget for the Tire Derived Product Grant Program to a
new Tire Incentive Program that will focus on promoting new tire-derived product
development and shift established product manufacturers to use of ground rubber from other
feedstock. CalRecycle is also replacing the Tire-Derived Product Business Assistance
Program, which offered a wide variety of assistance to manufacturers, with a new Tire
Outreach and Market Analysis (TOMA) program. TOMA will focus exclusively on outreach
and education to promote tire-derived products.
This bill is consistent with the direction and recommendations of CalRecycle's 2015 Five
Year Plan.
3) Suggested amendments. This bill contains a number of drafting issues that inadvertently
resulted in provisions that are not consistent with the intent of the author. In order to address
these issues, the committee may wish to adopt the following amendments:
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a) Strike references to "waste tire generator" and clarify that the regulatory fee is assessed
on retail sellers of new tires.
b) Strike out lines 3 through 13 on page 6 of the bill to clarify that there is one regulatory
fee.
c) Delete the provision that grants CalRecycle the authority to establish different fees for
different sellers.
d) Clarify that the amount of the one regulatory fee shall not exceed CalRecycle's
reasonable regulatory costs.
e) Make the corresponding changes to the provisions of the bill that will become effective
on January 1, 2024.
REGISTERED SUPPORT / OPPOSITION:
Support
Californians Against Waste
California Association of Local Conservation Corps
California League of Conservation Voters
California State Association of Counties
Don’t Waste LA Project
Environmental Action Committee of West Marin
Los Angeles Alliance for a New Economy
WILDCOAST
Opposition
None on file
Analysis Prepared by: Elizabeth MacMillan / NAT. RES. / (916) 319-2092