Existing law, the California Integrated Waste Management Act of 1989, administered by the Department of Resources Recycling and Recovery, establishes an integrated waste management program and requires the department to adopt rules and regulations, as necessary, to carry out the act. Existing law requires each city, county, and regional agency, if any, to develop a source reduction and recycling element, household hazardous waste element, and nondisposal facility element of an integrated waste management plan. The act requires the source reduction and recycling element to divert from disposal 50% of all solid waste subject to the element through source reduction, recycling, and composting activities, with specified exceptions.

This bill would require a city or county that requires a refundable deposit, performance security, or similar financial guarantee as a condition of issuing a construction, demolition, or building permit for the purpose of ensuring compliance with a construction or demolition debris requirement to return the full amount of the deposit if documentation demonstrating compliance with the terms of the deposit is provided, as specified.

Existing law, the California Integrated Waste Management Act of 1989, administered by the Department of Resources Recycling and Recovery, establishes an integrated waste management program and requires the department to adopt rules and regulations, as necessary, to carry out the act. Existing law requires each city, county, and regional agency, if any, to develop a source reduction and recycling element, household hazardous waste element, and nondisposal facility element of an integrated waste management plan. The act requires the source reduction and recycling element to divert from disposal 50% of all solid waste subject to the element through source reduction, recycling, and composting activities, with specified exceptions.

This bill would require a city or county that requires a refundable deposit, performance security, or similar financial guarantee as a condition of issuing a construction, demolition, or building permit for the purpose of ensuring compliance with a construction or demolition debris requirement to return the full amount of the deposit if documentation demonstrating compliance with the terms of the deposit is provided, as specified.

Existing law, the California Integrated Waste Management Act of 1989, administered by the Department of Resources Recycling and Recovery, establishes an integrated waste management program and requires the department to adopt rules and regulations, as necessary, to carry out the act. Existing law requires each city, county, and regional agency, if any, to develop a source reduction and recycling element, household hazardous waste element, and nondisposal facility element of an integrated waste management plan. The act requires the source reduction and recycling element to divert from disposal 50% of all solid waste subject to the element through source reduction, recycling, and composting activities, with specified exceptions.

This bill would require a city or county that requires a refundable deposit, performance security, or similar financial guarantee as a condition of issuing a construction, demolition, or building permit for the purpose of ensuring compliance with a construction or demolition debris requirement to return the full amount of the deposit if documentation demonstrating compliance with the terms of the deposit is provided, as specified.

Existing law, the California Integrated Waste Management Act of 1989, administered by the Department of Resources Recycling and Recovery, establishes an integrated waste management program and requires the department to adopt rules and regulations, as necessary, to carry out the act. Existing law requires each city, county, and regional agency, if any, to develop a source reduction and recycling element, household hazardous waste element, and nondisposal facility element of an integrated waste management plan. The act requires the source reduction and recycling element to divert from disposal 50% of all solid waste subject to the element through source reduction, recycling, and composting activities, with specified exceptions.

This bill would require a city or county that requires a refundable deposit, performance security, or similar financial guarantee as a condition of issuing a construction, demolition, or building permit for the purpose of ensuring compliance with a construction or demolition debris requirement to return the full amount of the deposit if documentation demonstrating compliance with the terms of the deposit is provided, as specified.

 THIRD READING  

Bill No: AB 2559

Author: Ward (D)

Amended: 4/8/26 in Assembly

Vote: 21

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 7-0, 6/17/26

AYES: Blakespear, Valladares, Allen, Dahle, Gonzalez, Hurtado, Menjivar

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 65-0, 4/27/26 - See last page for vote

SUBJECT: Solid waste: construction debris: diversion: deposits

SOURCE: Author

DIGEST:

This bill requires local governments to reimburse persons’ or entities’ construction demolition deposits up to three years after the final inspection of the project has been completed.

ANALYSIS:

Existing law:

1. Pursuant to the Integrated Waste Management Act (Public Resources Code (PRC) 40000 et seq.):
   1. Establishes a statewide goal that 75% of solid waste be diverted from landfill disposal by 2020 through source reduction, recycling, and composting;
   2. Requires jurisdictions, defined as cities, counties, and regional agencies, to divert at least 50% of solid waste generated from landfill disposal through source reduction, recycling, reuse, and composting activities. The amount diverted is known as a jurisdictions “diversion rate.” Since 2008, this requirement has shifted to a 50% disposal rate based on per capital disposal;
   3. Requires CalRecycle and local agencies to maximize the use of all feasible source reduction, recycling, and composting options to reduce the amount of solid waste disposed; and
      
   4. Requires CalRecycle to adopt one or more model ordinances that local agencies may adopt that require diversion of construction and demolition (C&D) waste, as specified.
      
2. Requires that at least 65% of nonhazardous C&D waste generated by residential and non-residential construction and demolition projects be diverted from landfill disposal, as specified. Requires the submission of a construction waste management plan, as specified. (California Green Building Standards Code (CalGreen) 4.408 and 5.408)
   

This bill:

1. Requires a city or county that collects a deposit as a condition of a construction, demolition, or building permit for the purpose of ensuring compliance with a construction or demolition debris diversion requirement, to return the full amount within three years of the final inspection, if the applicant submits documentation demonstrating compliance.
2. Specifies that this bill does not prohibit a city or county from denying a refund if the submitted documentation demonstrates noncompliance with applicable diversion requirements.
3. States related findings and declarations relating to the use of refundable deposits to ensure compliance with local solid waste diversion requirements.
   

Background

California’s recycling goals. CalRecycle is tasked with diverting at least 75% of solid waste from landfills statewide by 2020. Local governments have been required to divert 50% of the waste generated within the jurisdiction from landfill disposal since 2000. AB 341 (Chesbro, Chapter 476, Statutes of 2011) requires commercial waste generators to arrange for recycling services for the material they generate and requires local governments to implement commercial solid waste recycling programs designed to divert solid waste generated by businesses out of the landfill. A follow up bill, AB 1826 (Chesbro, Chapter 727, Statutes of 2014), requires generators of organic waste (i.e., food waste and yard waste) to arrange for recycling services for that material to keep the material out of the landfill. California’s recycling rate, which reached 50% in 2014, has dropped to 42% as of 2024.

An estimated 35 million tons of waste are disposed of in California’s landfills annually. In 2014, CalRecycle reported in its report on facility-based characterization of solid waste in California that construction and demolition (C&D) materials are estimated to account for between 21.7 to 25.5 percent of the disposed waste stream.

C&D waste and management. Commercial waste encompasses all solid waste generated by businesses, including C&D debris. C&D waste typically consists of materials such as lumber, drywall, concrete, metals, and other byproducts generated during construction, renovation, and demolition activities. Many of these materials can be reused or recycled: metals are the most commonly-recycled material while lumber makes up the majority of debris that still goes to a landfill.

California has adopted stringent statutory and regulatory requirements governing the diversion of C&D materials from landfills. Under the California Green Building Standards Code (CALGreen), most covered construction and demolition projects must divert at least 65% of nonhazardous C&D debris through recycling, reuse, or salvage. Facilities can obtain third-party certification to demonstrate they are achieving at least 65% diversion.

Local governments enforce CalGREEN requirements, and some have additional local C&D requirements. To facilitate local implementation, the Legislature enacted SB 1374 (Kuehl, Chapter 501, Statutes of 2002) directing CalRecycle to develop model ordinances for C&D waste management programs. Accordingly, most California local governments have adopted C&D waste management ordinances.

Many jurisdictions require applicants to submit waste management plans and impose refundable security deposits or administrative fees prior to permit issuance. These amounts are commonly calculated based on project valuation or square footage and are refunded upon demonstration of compliance with applicable diversion requirements.

Comments

Purpose of Bill. According to the author, “Local governments across California have adopted construction and demolition waste diversion programs that require refundable deposits as a condition of issuing building permits. However, cities have developed inconsistent timelines in which to refund deposits. Additionally, a request for refund is often tied to the project’s final inspection, which can occur well before construction is fully complete. As a result, permit holders—who often rely on contractors to manage projects and paperwork—may miss the refund deadline even when they ultimately comply with recycling requirements, losing deposits worth hundreds or thousands of dollars. Assembly Bill 2559 addresses this issue by requiring local governments to return the full deposit if the permit holder submits documentation demonstrating compliance within five years of final inspection. This bill preserves local waste diversion programs while ensuring consumers who follow the rules are not unfairly penalized by premature or confusing refund deadlines.”

Timelines for reimbursement. According to the author, some jurisdictions require permit holders to submit the necessary documentation to redeem the deposit within a specified time frame, which may be inadequate for the permit holder. For example, the City of San Diego’s ordinance requires documentation to be submitted 180 days from the final inspection of the project to request the return of the deposit. However, the author states that final inspection may be completed before the project is finished, making it impossible for some permit holders to recoup the cost of the deposit. To solve this problem, this bill specifies that permitholders have up to three years to submit proof of compliance.

Requiring permitholders to apply for C&D deposit reimbursements before all the work is completed is a real procedural problem. It is less clear whether statewide legislation is necessary to address this problem or whether it could be resolved at the local level.

Related/Prior Legislation

SB 1374 (Kuehl, Chapter 501, Statutes of 2002) tasks CalRecycle with adopting a countywide integrated waste management plan to adopt a model ordinance by March 1, 2004, for diverting 50 to 75 percent of C&D waste materials from landfills.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, the fiscal effects of this bill include:

1) The Department of Resources Recycling and Recovery (CalRecycle) does not anticipate any costs as a result of this bill.

2) Any costs to local government are likely to be minor and absorbable and, in any case, are not reimbursable by the state. The state does not require a local government to collect a refundable deposit to ensure compliance with C&D waste management and diversion ordinances; therefore, it is not a state-mandated local program.

SUPPORT: (Verified 6/30/26)

California Apartment Association
California Yimby
Habitat for Humanity California
Los Angeles County

OPPOSITION: (Verified 6/30/26)

None received

ASSEMBLY FLOOR: 65-0, 4/27/26

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Berman, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Fong, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Quirk-Silva, Ramos, Ransom, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Solache, Soria, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

NO VOTE RECORDED: Bains, Bauer-Kahan, Bennett, Boerner, Bonta, Bryan, Ellis, Flora, Gabriel, Macedo, Pellerin, Petrie-Norris, Celeste Rodriguez, Sharp-Collins, Stefani

Prepared by: Brynn Cook / E.Q. / (916) 651-4108

7/1/26 16:55:17

**** END ****

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Blakespear, Chair

2025 - 2026 Regular

Bill No: AB 2559

SUBJECT: Solid waste: construction debris: diversion: deposits

DIGEST: This bill requires local governments to reimburse persons’ or entities’ construction demolition deposits up to three years after the final inspection of the project has been completed.

ANALYSIS:

Existing law:

1. Pursuant to the Integrated Waste Management Act (Public Resources Code (PRC) 40000 et seq.):
   1. Establishes a statewide goal that 75% of solid waste be diverted from landfill disposal by 2020 through source reduction, recycling, and composting;
   2. Requires jurisdictions, defined as cities, counties, and regional agencies, to divert at least 50% of solid waste generated from landfill disposal through source reduction, recycling, reuse, and composting activities. The amount diverted is known as a jurisdictions “diversion rate.” Since 2008, this requirement has shifted to a 50% disposal rate based on per capital disposal;
   3. Requires CalRecycle and local agencies to maximize the use of all feasible source reduction, recycling, and composting options to reduce the amount of solid waste disposed; and
      
   4. Requires CalRecycle to adopt one or more model ordinances that local agencies may adopt that require diversion of construction and demolition (C&D) waste, as specified.
      
2. Requires that at least 65% of nonhazardous C&D waste generated by residential and non-residential construction and demolition projects be diverted from landfill disposal, as specified. Requires the submission of a construction waste management plan, as specified. (California Green Building Standards Code (CalGreen) 4.408 and 5.408)
   

This bill:

1. Requires a city or county that collects a deposit as a condition of a construction, demolition, or building permit for the purpose of ensuring compliance with a construction or demolition debris diversion requirement, to return the full amount within three years of the final inspection, if the applicant submits documentation demonstrating compliance.
2. Specifies that the bill does not prohibit a city or county from denying a refund if the submitted documentation demonstrates noncompliance with applicable diversion requirements.
3. States related findings and declarations relating to the use of refundable deposits to ensure compliance with local solid waste diversion requirements.
   

Background

1. California’s recycling goals. CalRecycle is tasked with diverting at least 75% of solid waste from landfills statewide by 2020. Local governments have been required to divert 50% of the waste generated within the jurisdiction from landfill disposal since 2000. AB 341 (Chesbro, Chapter 476, Statutes of 2011) requires commercial waste generators to arrange for recycling services for the material they generate and requires local governments to implement commercial solid waste recycling programs designed to divert solid waste generated by businesses out of the landfill. A follow up bill, AB 1826 (Chesbro, Chapter 727, Statutes of 2014), requires generators of organic waste (i.e., food waste and yard waste) to arrange for recycling services for that material to keep the material out of the landfill. California’s recycling rate, which reached 50% in 2014, has dropped to 42% as of 2024.

An estimated 35 million tons of waste are disposed of in California’s landfills annually. In 2014, CalRecycle reported in its report on facility-based characterization of solid waste in California that construction and demolition (C&D) materials are estimated to account for between 21.7 to 25.5 percent of the disposed waste stream.

1. C&D waste and management. Commercial waste encompasses all solid waste generated by businesses, including C&D debris. C&D waste typically consists of materials such as lumber, drywall, concrete, metals, and other byproducts generated during construction, renovation, and demolition activities. Many of these materials can be reused or recycled: metals are the most commonly-recycled material while lumber makes up the majority of debris that still goes to a landfill.

California has adopted stringent statutory and regulatory requirements governing the diversion of C&D materials from landfills. Under the California Green Building Standards Code (CALGreen), most covered construction and demolition projects must divert at least 65% of nonhazardous C&D debris through recycling, reuse, or salvage. Facilities can obtain third-party certification to demonstrate they are achieving at least 65% diversion.

Local governments enforce CalGREEN requirements, and some have additional local C&D requirements. To facilitate local implementation, the Legislature enacted SB 1374 (Kuehl, Chapter 501, Statutes of 2002) directing CalRecycle to develop model ordinances for C&D waste management programs. Accordingly, most California local governments have adopted C&D waste management ordinances.

Many jurisdictions require applicants to submit waste management plans and impose refundable security deposits or administrative fees prior to permit issuance. These amounts are commonly calculated based on project valuation or square footage and are refunded upon demonstration of compliance with applicable diversion requirements.

Comments

1. Purpose of Bill. According to the author, “Local governments across California have adopted construction and demolition waste diversion programs that require refundable deposits as a condition of issuing building permits. However, cities have developed inconsistent timelines in which to refund deposits. Additionally, a request for refund is often tied to the project’s final inspection, which can occur well before construction is fully complete. As a result, permit holders—who often rely on contractors to manage projects and paperwork—may miss the refund deadline even when they ultimately comply with recycling requirements, losing deposits worth hundreds or thousands of dollars. Assembly Bill 2559 addresses this issue by requiring local governments to return the full deposit if the permit holder submits documentation demonstrating compliance within five years of final inspection. This bill preserves local waste diversion programs while ensuring consumers who follow the rules are not unfairly penalized by premature or confusing refund deadlines.”
2. Timelines for reimbursement. According to the author, some jurisdictions require permit holders to submit the necessary documentation to redeem the deposit within a specified time frame, which may be inadequate for the permit holder. For example, the City of San Diego’s ordinance requires documentation to be submitted 180 days from the final inspection of the project to request the return of the deposit. However, the author states that final inspection may be completed before the project is finished, making it impossible for some permit holders to recoup the cost of the deposit. To solve this problem, this bill specifies that permitholders have up to three years to submit proof of compliance.

Requiring permitholders to apply for C&D deposit reimbursements before all the work is completed is a real procedural problem. It is less clear whether statewide legislation is necessary to address this problem or whether it could be resolved at the local level.

Related/Prior Legislation

SB 1374 Chapter 501, Statutes of 2002) tasks CalRecycle with adopting a CIWMB to adopt a model ordinance by March 1, 2004, for diverting 50 to 75 percent of C&D waste materials from landfills.

SOURCE:

Author

SUPPORT:

California Apartment Association
California Yimby
Habitat for Humanity California
Los Angeles County

OPPOSITION:

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2559

Author:(Ward)

As Amended Ver:April 8, 2026

Majority vote

SUMMARY

Requires local governments that collect deposits to incentivize compliance with local waste diversion requirements for construction and demolition (C&D) projects to refund the deposit if, within three years, the entity that paid the deposit submits documentation that demonstrates compliance with the terms of the deposit.

Major Provisions

1. Defines "deposit" as a refundable deposit, performance security or similar financial guarantee as a condition of a construction, demolition, or building permit for the purpose of ensuring compliance with a construction or demolition debris diversion requirement.
2. Requires a city or county that collects a deposit to return the full amount to the person or entity that paid the deposit if, within three years of the final inspection of the work or project that was subject to the deposit, the person or entity submits documentation that demonstrates compliance with the terms of the deposit.
3. Specifies that the bill does not prohibit a city or county from denying a refund if the submitted documentation demonstrates noncompliance with applicable diversion requirements.
4. States related findings and declarations relating to the use of refundable deposits to ensure compliance with local solid waste diversion requirements.

COMMENTS

State law requires local governments to divert at least 50% of the waste generated within their jurisdictions from landfill disposal. According to CalRecycle, C&D waste can be a significant portion of a jurisdiction’s waste stream and diverting it from landfills can help jurisdictions achieve and maintain their diversion goals. CALGreen, the state's green building standards, mandates locally permitted new residential and non-residential building construction, demolition, and certain additions and alteration projects to recycle or salvage for reuse a minimum of 65% of the non-hazardous C&D debris generated during the project.

SB 1374 (Kuehl), Chapter 501, Statutes of 2002, directed the California Integrated Waste Management Board (the predecessor of CalRecycle) to provide information to jurisdictions and general contractors on methods and activities to divert C&D materials, and develop and adopt a model C&D diversion ordinance for voluntary use by local jurisdictions. According to the Assembly Natural Resources Committee, most, if not all, local governments in the state have adopted ordinances relating to C&D waste management. Many of these ordinances include a refundable security deposit – intended to be a positive incentive for complying with a jurisdiction's C&D diversion ordinance – collected prior to the issuance of a permit and returned after proof of compliance is submitted. The amounts vary but are generally based on the square footage of the project or the project valuation.

The author has identified one instance of a homeowner in San Diego who was unable to redeem their deposit due to the 180-day timeline established by the city. The author notes that the homeowner did not receive the necessary documentation until completion of the project, which was several months after the final inspection. This bill ensures that deposits are returned when compliance is demonstrated within three years of final inspection

According to the Author

Local governments across California have adopted construction and demolition waste diversion programs that require refundable deposits as a condition of issuing building permits. However, cities have developed inconsistent timelines in which to refund deposits. Additionally, a request for refund is often tied to the project’s final inspection, which can occur well before construction is fully complete. As a result, permit holders – who often rely on contractors to manage projects and paperwork – may miss the refund deadline even when they ultimately comply with recycling requirements, losing deposits worth hundreds or thousands of dollars.

Assembly Bill 2559 addresses this issue by requiring local governments to return the full deposit if the permit holder submits documentation demonstrating compliance within five years of final inspection.

Arguments in Support

According to the Council of Infill Developers, "there is a misalignment between when compliance documentation is finalized and when jurisdictions require applicants to request a refund. In many cases, refund deadlines are tied to final inspection, while documentation—such as recycling receipts and hauler reports—is typically compiled afterward. As a result, a project may fully comply with all diversion requirements, yet still forfeit the deposit if the refund request is not submitted within the prescribed timeline."

Arguments in Opposition

None on file

FISCAL COMMENTS

1. The Department of Resources Recycling and Recovery (CalRecycle) does not anticipate any costs as a result of this bill.
2. Any costs to local government are likely to be minor and absorbable and, in any case, are not reimbursable by the state. The state does not require a local government to collect a refundable deposit to ensure compliance with C&D waste management and diversion ordinances; therefore, it is not a state-mandated local program.

VOTES

ASM NATURAL RESOURCES: 14-0-0

YES: Bryan, Ellis, Alanis, Connolly, Garcia, Haney, Hoover, Kalra, Macedo, Boerner, Pellerin, Schultz, Wicks, Zbur

ASM APPROPRIATIONS: 13-0-2

YES: Wicks, Hoover, Arambula, Caloza, Dixon, Fong, Mark González, Krell, Pacheco, Pellerin, Solache, Ta, Tangipa

ABS, ABST OR NV: Calderon, Muratsuchi

UPDATED

VERSION: April 8, 2026

CONSULTANT: Elizabeth MacMillan / NAT. RES. / (916) 319-2092 FN: 0002391

Date of Hearing: April 22, 2026

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2559

Author:(Ward) – As Amended Ver:April 8, 2026

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires a local government refund a deposit it collected to ensure compliance with a construction or demolition (C&D) debris diversion requirement if, within three years of final inspection, the entity that paid the deposit submits documentation that demonstrates compliance with the terms of the deposit.

Specifically, this bill:

1) Defines “deposit” as a refundable deposit, performance security, or similar financial guarantee as a condition of a construction, demolition, or building permit for the purpose of ensuring compliance with a C&D debris diversion requirement.

2) Requires a city or county that collects a deposit to return the full amount of the deposit to the entity that paid the deposit if, within three years of the final inspection on the work or project that was subject to the deposit, the entity submits documentation that demonstrates compliance with the terms of the deposit.

3) Provides that the bill does not prohibit a city or county from denying a refund if the submitted documentation demonstrates noncompliance with applicable diversion requirements.

FISCAL EFFECT:

1) The Department of Resources Recycling and Recovery (CalRecycle) does not anticipate any costs as a result of this bill.

2) Any costs to local government are likely to be minor and absorbable and, in any case, are not reimbursable by the state. The state does not require a local government to collect a refundable deposit to ensure compliance with C&D waste management and diversion ordinances; therefore, it is not a state-mandated local program.

COMMENTS:

1) Purpose. According to the author:

Local governments across California have adopted construction and demolition waste diversion programs that require refundable deposits as a condition of issuing building permits. However, cities have developed inconsistent timelines in which to refund deposits. Additionally, a request for refund is often tied to the project’s final inspection, which can occur well before construction is fully complete. As a result, permit holders – who often rely on contractors to manage projects and paperwork – may miss the refund deadline even when they ultimately comply with recycling requirements, losing deposits worth hundreds or thousands of dollars.

Assembly Bill 2559 addresses this issue by requiring local governments to return the full deposit if the permit holder submits documentation demonstrating compliance within five years of final inspection.

2) Background. State law requires local governments to divert at least 50% of the waste generated within their jurisdictions from landfill disposal. According to CalRecycle, C&D waste can be a significant portion of a jurisdiction’s waste stream and diverting it from landfills can help jurisdictions achieve and maintain their diversion goals. CALGreen, the state’s green building standards, mandates locally permitted new residential and non-residential building construction, demolition, and certain additions and alteration projects to recycle or salvage for reuse a minimum of 65% of the non-hazardous C&D debris generated during the project.

SB 1374 (Kuehl), Chapter 501, Statutes of 2002, directed the California Integrated Waste Management Board (the predecessor of CalRecycle) to provide information to jurisdictions and general contractors on methods and activities to divert C&D materials, and develop and adopt a model C&D diversion ordinance for voluntary use by local jurisdictions. According to the Assembly Natural Resources Committee, most, if not all, local governments in the state have adopted ordinances relating to C&D waste management. Many of these ordinances include a refundable security deposit – intended to be a positive incentive for complying with a jurisdiction’s C&D diversion ordinance – collected prior to the issuance of a permit and returned after proof of compliance is submitted. The amounts vary but are generally based on the square footage of the project or the project valuation.

According to the Council of Infill Builders (CIB), there is a misalignment between when compliance documentation is finalized and when jurisdictions require applicants to request a refund. CIB states that in many cases, refund deadlines are tied to final inspection, while documentation – such as recycling receipts and hauler reports – is typically compiled afterward: “As a result, a project may fully comply with all diversion requirements, yet still forfeit the deposit if the refund request is not submitted within the prescribed timeline. This is not an issue of noncompliance—it is an issue of timing and administrative process.”

The author has identified one instance of a homeowner in San Diego who was unable to redeem their deposit due to the 180-day timeline established by the city. The author notes that the homeowner did not receive the necessary documentation until completion of the project, which was several months after the final inspection. This bill ensures that deposits are returned when compliance is demonstrated within three years of final inspection.

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: April 6, 2026

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Isaac G. Bryan, Chair

ABPCA Bill Id:AB 2559 (

Author:Ward) – As Introduced Ver:February 20, 2026

SUBJECT: Solid waste: construction debris: diversion: deposits

SUMMARY: Requires local governments that collect deposits to incentivize compliance with local waste diversion requirements for construction and demolition (C&D) projects to refund the deposit if, within five years, the entity that paid the deposit submits documentation that demonstrates compliance with the terms of the deposit.

EXISTING LAW:

1. Pursuant to the Integrated Waste Management Act (Public Resources Code (PRC) 40000 et seq.):
   1. Establishes a statewide goal that 75% of solid waste be diverted from landfill disposal by 2020 through source reduction, recycling, and composting.
   2. Requires jurisdictions, defined as cities, counties, and regional agencies, to divert at least 50% of solid waste generated from landfill disposal through source reduction, recycling, reuse, and composting activities. The amount diverted is known as a jurisdictions “diversion rate.” Since 2008, this requirement has shifted to a 50% disposal rate based on per capital disposal.
   3. Requires CalRecycle and local agencies to maximize the use of all feasible source reduction, recycling, and composting options to reduce the amount of solid waste disposed.
      
   4. Requires CalRecycle to adopt one or more model ordinances that local agencies may adopt that require diversion of C&D waste, as specified.
      
2. Requires that at least 65% of nonhazardous C&D waste generated by residential and non-residential construction and demolition projects be diverted from landfill disposal, as specified. Requires the submission of a construction waste management plan, as specified. (California Green Building Standards Code (CalGreen) 4.408 and 5.408)
   

THIS BILL:

1. Defines “deposit” as a refundable deposit, performance security or similar financial guarantee as a condition of a construction, demolition, or building permit for the purpose of ensuring compliance with a construction or demolition debris diversion requirement.
2. Requires a city or county that collects a deposit to return the full amount to the person or entity that paid the deposit if, within five years of the final inspection of the work or project that was subject to the deposit, the person or entity submits documentation that demonstrates compliance with the terms of the deposit.
3. Specifies that the bill does not prohibit a city or county from denying a refund if the submitted documentation demonstrates noncompliance with applicable diversion requirements.
4. States related findings and declarations relating to the use of refundable deposits to ensure compliance with local solid waste diversion requirements.

FISCAL EFFECT: Unknown

COMMENTS:

1. California’s recycling goals. An estimated 35 million tons of waste are disposed of in California’s landfills annually. CalRecycle is tasked with diverting at least 75% of solid waste from landfills statewide by 2020. Local governments have been required to divert 50% of the waste generated within the jurisdiction from landfill disposal since 2000. AB 341 (Chesbro), Chapter 476, Statutes of 2011, requires commercial waste generators to arrange for recycling services for the material they generate and requires local governments to implement commercial solid waste recycling programs designed to divert solid waste generated by businesses out of the landfill. Commercial waste includes all solid waste generated by businesses, including C&D waste. C&D waste generally includes lumber, drywall, concrete, metals, and other wastes generated by construction and demolition activities. A follow up bill, AB 1826 (Chesbro), Chapter 727, Statutes of 2014, requires generators of organic waste (i.e., food waste and yard waste) to arrange for recycling services for that material to keep the material out of the landfill. California’s recycling rate, which reached 50% in 2014, has dropped to 42% as of 2024.
2. C&D management. California established stringent recycling requirements for solid waste generated by construction projects. CalGreen, the state’s green building standards, generally require that 65% of the waste generated by C&D projects must be diverted from landfill disposal. Additionally, local jurisdictions are required to ensure that at least 50% of the waste generated by the jurisdiction is diverted. In order to facilitate compliance with these requirements, the Legislature enacted SB 1374 (Kuehl), Chapter 501, Statutes of 2002, which required CalRecycle to establish one or more model ordinances to assist local jurisdictions with adopting C&D policies.
   
   Most, if not all, local governments in the state have adopted an ordinance relating to C&D waste management. A number of these include a security deposit that is collected prior to the issuance of a permit, which are refundable after proof of compliance is submitted. The amounts vary but are generally based on the square footage of the project or the project valuation.
3. This bill. According to the author, some jurisdictions require permit holders to submit the necessary documentation to redeem the deposit within a specified time frame. For example, the City of San Diego’s ordinance requires documentation to be submitted 180 days from the final inspection of the project to request the return of the deposit. However, the author states that final inspection may be completed before the project is finished, making it impossible for some permit holders to recoup the cost of the deposit. This bill specifies that permit holders have up to five years to submit proof of compliance.
   
   It is not clear that this concern warrants a change in statute that limits the ability of local governments to establish timelines they deem appropriate, or that five years is the appropriate timeline. The author has identified one instance of a homeowner in San Diego who was unable to redeem their deposit due to the 180 day timeline established by the city. The author notes that the homeowner did not receive the necessary documentation until completion of the project, which was several months after the final inspection. The author’s office may wish to consider working with the city to adjust the ordinance to allow permit holders additional time to submit documentation rather than pursuing a legislative solution. Additionally, the committee may wish to consider amending the bill to reduce the timeline established by the bill from five years to three years.
4. Author’s statement:

Local governments across California have adopted construction and demolition waste diversion programs that require refundable deposits as a condition of issuing building permits. However, cities have developed inconsistent timelines in which to refund deposits. Additionally, a request for refund is often tied to the project’s final inspection, which can occur well before construction is fully complete. As a result, permit holders—who often rely on contractors to manage projects and paperwork—may miss the refund deadline even when they ultimately comply with recycling requirements, losing deposits worth hundreds or thousands of dollars. Assembly Bill 2559 addresses this issue by requiring local governments to return the full deposit if the permit holder submits documentation demonstrating compliance within five years of final inspection. This bill preserves local waste diversion programs while ensuring consumers who follow the rules are not unfairly penalized by premature or confusing refund deadlines.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file

Opposition

None on file

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. /