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) 








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          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.









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             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  








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            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  








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            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