BILL ANALYSIS AB 283 Page 1 Date of Hearing: May 6, 2009 ASSEMBLY COMMITTEE ON APPROPRIATIONS Kevin De Leon, Chair AB 283 (Chesbro) - As Amended: April 23, 2009 Policy Committee: Natural ResourcesVote:5-3 Urgency: No State Mandated Local Program: No Reimbursable: No SUMMARY This bill creates the California Product Stewardship Act of 2009, which requires the Integrated Waste Management Board (IWMB) to administer an Extended Producer Responsibility (EPR) program of product stewardship that encourages producers to be comprehensively responsible for the life cycle of their products. FISCAL EFFECT 1)Annual start up costs to IWMB through 2011-12, of approximately $500,000 to coordinate with representatives of state and local government, producers, retailers, consumers, transporters, haulers, recyclers, nonprofit organizations, and other interested stakeholders; convene public workshops; develop and adopt regulations; and recommend short- and long-term incentives to foster environmental product design to reduce waste and use of hazardous materials. (Integrated Waste Management Account (IWMA) 2)Ongoing annual cost to IWMB in the hundreds of thousands of dollars to select products to be covered under the act and set performance goals for those products, review product stewardship plans and reports, implement incentives to enhance recyclability and redesign efforts and to reduce environmental and safety impacts of covered products, and to enforce the provisions of the act. (IWMA) 3)Fee revenues, as authorized by this bill, should ultimately be sufficient to cover the costs of implementing and administering the provisions of this bill. (IWMA) AB 283 Page 2 4)Possible savings beginning in 2012-13, potentially in the millions of dollars annually, to various special funds to the extent IWMB's EPR program replaces the state's other, product-specific waste management programs. SUMMARY (continued) Specifically, this bill: 1)Requires IWMB to: a) Administer the Extended Producer Responsibility Framework Program that provides protocols to encourage producers to research alternatives to foster full life cycle ("cradle-to-cradle") producer responsibility and reduce the end-of-life environmental impacts of their products. b) Adopt regulations, by July 1, 2011, that include immediate incentives to stimulate waste reduction, pollution prevention, energy efficiency, and increased secondary use of recycled and reused materials, as well as long-term incentives to foster product design to reduce waste and use of hazardous materials. c) On and after July 1, 2012, select products with environmental, waste management and public health effects, including all produces banned from landfill disposal, to be covered by the program and set performance goals for those products. d) Establish civil penalty of up to $50,000 against a producer for violation of these provisions. 2)Requires a producer of a covered product to: a) Submit a product stewardship plan to IWMB within 180 days of IWMB's identification of the covered product or participate in a stewardship organization that submits such a plan, and revise the plan every four years. b) Collect the covered product without charging a fee to consumers at the time of collection. AB 283 Page 3 c) Pay a fee to cover all administrative and operational costs associated with this bill. d) Report to IWMB every other year on the activities of the product stewardship plan, to be approved by IWMB within 90 days. 3)Prohibits a covered product from sale or promotional use on and after July 1, 2012, unless the producer or product stewardship organization of the covered product submits a product stewardship plan. 4)Authorizes IWMB to establish and collect a fee sufficient to cover the costs of implementing and administering the provisions of this bill. 5)Authorizes IWMB to offer collected penalty and other funds as incentives to enhance recyclability and redesign efforts and to reduce environmental and safety impacts of covered products. COMMENTS 1)Rationale. The author contends it is necessary for producers to design and manufacture products that are more resource efficient and recyclable, less hazardous, and emit fewer greenhouse gases. According to the author, currently, the state addresses products with end-of-life management issues through a patchwork of product- and material-specific programs of varying success. This bill would replace the state's current piecemeal approach to waste management by giving IWMB the regulatory authority to address a wide range of products that end up in California landfills. The author contends that the product stewardship program created by this bill would protect California's environment and human health by providing producers with the financial incentive to design and make products that are less costly to dispose of. The author further contends that the program created by this bill would cost significantly less to administer than does the state's existing, product-specific waste management approach. 2)Supporters, including environmental groups and many local governments, believe the the EPR program authorized by this AB 283 Page 4 bill would alleviate some waste management costs to local government by shifting the responsibility for end-of-life management of products to the manufacturer. Supporters additionally argue this bill would lessen the need for product-by-product waste-management programs, such as current programs for electronic waste and used oil disposal, thereby reducing administrative costs through streamlining. 3)Opponents , including many industry organizations, claim that the bill provides overly broad authority to IWMB that fails to provide exemptions for products currently recycled at high rates and will increase costs to businesses and consumers. 4)Background. California law seeks to reduce the amount of waste that goes into landfills. Existing law requires local governments to divert 50% of solid waste generated from landfill disposal through source reduction, reuse, and recycling. In addition, the state has different programs, most of which include fee authority, that restrict the disposal and direct the collection of motor oil, electronic waste, cell phones, rechargeable batteries, mercury thermometers. California state and local government spend hundreds of millions of dollars a year to collect, recycle and dispose of waste. Extended Producer Responsibility (EPR) also seeks to reduce the amount of waste that winds up in landfills. But, unlike approaches that address waste at the point of disposal, EPR seeks to address the generation of waste at the point of product design. Typically, producers do not consider recycling possibilities, disposal costs, and environmental impacts when designing products because public agencies and other entities, not the producers, bear those costs. By placing responsibility for product disposal on the producer, EPR provides the producer, rather than state or local government, a financial incentive to reduce the generation of waste. 5)IWMB's EPR Framework. At its January 2008 board meeting, IWMB adopted a revised "Overall Framework for an EPR System in California," which called for establishing an EPR system through statute and subsequent regulations. IWMB's EPR Framework was developed and adopted after two years of public workshops and meetings with local governments, legislative members, retailers, and producers. Similarly, the League of AB 283 Page 5 California Cities, California State Association of Counties, and the Regional Council of Rural Counties each have all adopted EPR policy supporting the IWMB's general framework approach. Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081