BILL ANALYSIS AB 283 Page 1 Date of Hearing: April 20, 2009 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Nancy Skinner, Chair AB 283 (Chesbro) - As Amended: April 13, 2009 SUBJECT : Solid waste: extended producer responsibility SUMMARY : Enacts the California Product Stewardship Act of 2009 (Act). The Act requires the California Integrated Waste Management Board (CIWMB) to administer a program to provide environmentally sound product stewardship protocols to foster "cradle-to-cradle" producer responsibility. EXISTING LAW : 1)Pursuant to the California Integrated Waste Management Act of 1989, requires local governments to divert 50% of solid waste generated from landfill disposal through source reduction, reuse, and recycling. 2)Establishes the California Oil Recycling Enhancement Act, which requires manufacturers of used oil to pay a fee of 4 cents per quart (16 cents per gallon) to CIWMB. CIWMB then pays a recycling incentive of 4 cents per quart to industrial generators, curbside collection program operators, and certified used oil collection center for used oil collected from the public and transported for recycling. This Act includes related grants and loans, development and implementation of an information and education program, and a reporting, monitoring, and enforcement program. 3)Establishes the Electronic Waste Recycling Act of 2003, which requires a retailer selling a covered electronic device (CED) in California to collect a recycling fee (between $8 and $25) from the consumer. Fees are deposited into the Electronic Waste Recovery and Recycling Account, which is continually appropriated to CIWMB and the Department of Toxic Substances Control (DTSC) to make electronic waste recovery payments to cover the net cost of an authorized collector in operating a "free and convenient" system for collecting, consolidating, and transporting CEDs, and to make electronic waste recycling payments to cover an electronic waste recycler's average net cost of receiving, processing, and recycling CEDs. The Act defines CED as a product that contains a video display device AB 283 Page 2 4 inches and larger. 4)Establishes the Cell Phone Recycling Act of 2004, which requires every retailer of cell phones to have in place a system for the acceptance and collection of used cell phones for reuse, recycling, or proper disposal. 5)Establishes the Rechargeable Batter Recycling Act of 2006, which requires every retailer of rechargeable batteries to have in place a system for the acceptance and collection of used rechargeable batteries for reuse, recycling, or proper disposal. 6)Establishes the Mercury Thermostat Collection Act of 2008, which requires manufacturers to establish and maintain a program for out-of-service mercury-added thermostats. Requires the program to include collection, handling, and arranging for appropriate management of out-of-service mercury-added thermostats. THIS BILL establishes the Act, which: 1)Defines terms used in the Act, including: a) "Cradle-to-cradle design" as an ideal condition where the product is developed for closed-loop systems in which every ingredient is safe and beneficial. b) "Extended producer responsibility" (EPR) as the extension of the shared responsibility of producers, and all entities involved in the product chain, to reduce cradle-to-cradle impacts of a product and its packaging, with the primary responsibility placed on the producer who makes design and marketing decisions. 2)Establishes the EPR Framework Program. The program is intended to provide sound product stewardship protocols that encourage producers to research alternatives during the product design and packaging phases to foster cradle-to-cradle producer responsibility and reduce the end-of-life environmental impacts. Requires CIWMB to coordinate with representatives of state and local government, producers, retailers, consumers, transporters, haulers, recyclers, nonprofit organizations, and other interested stakeholders with respect to all regulations adopted. After holding public AB 283 Page 3 workshops, requires CIWMB to adopt regulations for the program by July 1, 2011. Requires CIWMB to recommend, in consultation with stakeholders, immediate incentives for producers to stimulate waste reduction, pollution prevention, energy efficiency, and increased use of recycled materials. Requires CIWMB to recommend long-term incentives to foster environmental product design to reduce waste and use of hazardous materials, to reward businesses for superior environmental performance, and for investments that support longer term strengthening of recycled materials markets. 3)Requires CIWMB to establish penalties for violations of the Act. 4)Clarifies that actions taken under the Act do not interfere with existing efforts of the Department of Toxic Substances Control (DTSC) relating to green chemistry; the California Energy Commission relating to energy efficiency; the Air Resources Board relating to climate change; the State Water Resources Board relating to water quality; the Ocean Protection Council relating to marine debris; the Department of Conservation relating to the Bottle Bill; and, CIWMB relating to Rigid Plastic Packaging Containers. 5)Beginning January 1, 2012 and in consultation with stakeholders in public workshops, authorizes CIWMB to select covered products according to specified requirements, including: a) Products that pose a significant threat to public health and safety when discarded; b) Products that pose a threat of increased greenhouse gas emissions; and, c) Products that impose significant end-of-life management costs on state or local government. 6)Requires CIWMB to consider numerous factors when selecting products, including whether or not there is an existing product stewardship or other regulatory system for the product. 7)Specifies that all products banned from landfill disposal (generally pursuant to a determination by DTSC that the AB 283 Page 4 product is hazardous) shall be managed under a product stewardship program within one year. 8)In the selection process, requires CIWMB to take specified actions, including: a) Select and define a covered product, which may include historic or orphan products; b) Determine whether the packaging for a product will be included; and, c) Establish implementation dates, performance goals, and timeframes. 9)Beginning July 1, 2012, prohibits the sale of a covered product unless the producer is in compliance with the Act. The producer must: a) Submit a product stewardship plan or participation in a stewardship organization; b) Collect the individual covered product for recycling, when appropriate; c) Provide for collection services without charging a fee at the time of collection; and, d) Pay administrative and operational costs associated with the Act. 10)Establishes requirements for the product stewardship plan and requires the plan to be submitted by the producer to CIWMB within 180 days of the selection of the product. Requires plan revision every 4 years. 11)Beginning June 30, 2012, and annually thereafter, requires producers and stewardship organizations operating under the Act to submit a report to CIWMB, which includes status of meeting performance goals, a description of outreach and education activities, and actions undertaken to manage and reduce the life-cycle impacts of the covered product. 12)Establishes the Extended Producer Responsibility Account (Account) and the Extended Producer Responsibility Penalty AB 283 Page 5 Subaccount (Subaccount) in the Integrated Waste Management Fund. a) Requires producers subject to the Act to submit an administrative fee to CIWMB to cover administrative costs to be deposited into the Account. b) Requires all penalties collected under the Act to be deposited into the Subaccount, which may be expended by CIWMB to cover costs of implementing the Act. c) Specifies that the Account and Subaccount may be expended by CIWMB for incentives to enhance recyclability and redesign efforts and to reduce environmental and safety impacts of covered products. 13)Establishes civil liability of up to $50,000 for violations of the Act. FISCAL EFFECT : Unknown COMMENTS : 1)Background Expanded producer responsibility is a strategy to "close the loop" by placing primary responsibility for life cycle management on producers. This approach is similar to that being pursued for "green chemistry" in California. In September 2007, CIWMB adopted an EPR Framework as an overall policy priority and committed to seek statutory authority. Prior to adopting the Framework, CIWMB conducted a stakeholder workshop on EPR. The Framework was adopted by CIWMB in a public board meeting, which included comments from stakeholders and the public. EPR is helpful in addressing recycling and waste reduction; it also addresses another pressing concerns. DTSC routinely tests products for toxicity to determine if the product is "hazardous" and therefore prohibited from landfill disposal. However, there is no system in place for the management of these products (or the toxins they include). 2)This bill AB 283 Page 6 According to the author, AB 283 proposes a comprehensive EPR framework, which would establish one law to address a wide range of products that end up in California landfills and have a significant impact on our environment. The author states "By having producers share in the costs of managing product discards, EPR harnesses the power of the free market to drive environmental improvement." This bill is modeled after the CIWMB EPR Framework. 3)Arguments in support Supporters of AB 283 include environmental groups and local governments. According to the League of California Cities, cities and counties spend upwards of $500 million annually to manage products disposed in landfills and those banned from landfill disposal, which is ultimately passed on to ratepayers. This bill would alleviate some of those costs by shifting the responsibility for end-of-life management of products back to the manufacturer. This bill would alleviate the need for product-by-product legislation. Such legislation, while helpful in managing specific products, has created numerous programs with little consistency. Many of the existing programs (including electronic waste and used oil) include the collection of separate fees by different entities, creating significant administrative duties for the state. This bill would alleviate the need for separate programs and would instead create a framework under which CIWMB can administer one program for a variety of products. 4)Arguments in opposition Opponents of the bill (including business organizations and product manufacturers) argue that this bill grants broad regulatory authority to CIWMB to select products with public involvement limited to a minimum of one public workshop. (The Committee should note that the products are required to be added at a public board meeting, which would be in addition to the workshop.) Opponents also state that the product selection process is so broad that virtually any product could be included, and that the bill would increase costs for businesses and consumers. Additionally, according to opponents, this bill does not specify that products already being recycled in high percentages at curbside or that are already subject to a product AB 283 Page 7 management program (such as e-waste) are excluded from the Act, which may create duplicative requirements. 5)Suggested amendment This bill does not currently exempt products with an existing product stewardship or recycling regulatory program. In order to insure that this bill applies to products that lack such a program, the committee may wish to adopt amendments specifically exempting products for which a product stewardship or other life-cycle management regulatory system exist , such as those listed under Existing Law. REGISTERED SUPPORT / OPPOSITION : Support American Federation of State, County and Municipal Employees, AFL-CIO California Association of Environmental Health Administrators Californians Against Waste California Association of Environmental Health Administrators California Product Stewardship Council California Resource Recovery Association California Senior Legislature California State Association of Counties City and County of San Francisco City of Chula Vista City of Cupertino City of Fremont City of Lathrop City of Napa City of Santa Cruz City of Stockton City of Sunnyvale City of Union City City of Torrance Clean Water Action County of San Joaquin Defenders of Wildlife Del Norte Solid Waste Management Authority Environment California Green Shanga Heal the Bay Humboldt Waste Management AB 283 Page 8 League of California Cities Long Beach Organic Marin County Board of Supervisors Marin County Hazardous & Solid Waste Management Joint Powers Authority Marin Sanitary Service Napa County Planning and Conservation League Regional Council of Rural Counties San Diego Coastkeeper Santa Clara Valley Water District Sierra Club California Santa Monica Baykeeper SLV Redemption/Recycling Centers Solano County Board of Supervisors Solid Waste Association of North America Sonoma County Waste Management Agency Tamalpais Community Services District TDC Environmental 7th Generation Advisors Opposition American Chemistry Council AstraZeneca BIOCOM California Chamber of Commerce California Council for Environmental and Economic Balance California Film Extruders and Converters Association California Grocers Association California Healthcare Institute California League of Food Processors California Manufacturers & Technology Association California Paint Council Cal-Tax Family Winemakers of California Glass Packaging Institute Grocery Manufacturers Association Information Technology Industry Council Lassen Regional Solid Waste Management Authority National Paint and Coatings Association Pactive Corporation Pharmaceutical Research and Manufacturers of America Soap and Detergent Association TechAmerica AB 283 Page 9 Western States Petroleum Association Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916) 319-2092