BILL ANALYSIS                                                                                                                                                                                                    





                                                                  AB 1173

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          GOVERNOR'S VETO
          AB 1173 (Huffman)
          As Amended  September 4, 2009
          2/3 vote
           
           
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          |ASSEMBLY:  |51-25|(June 2, 2009)  |SENATE: |21-17|(September 10, |
          |           |     |                |        |     |2009)          |
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          |ASSEMBLY:  |52-27|(September 11,  |        |     |               |
          |           |     |2009)           |        |     |               |
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           Original Committee Reference:    E.S. & T.M.  

           SUMMARY  :  Prohibits a manufacturer from using funds from energy  
          distribution charges for the purchase and distribution of  
          compact fluorescent lights (CFLs), unless the CFLs meet  
          specified standards, including low levels of mercury, and the  
          manufacturer has implemented a fluorescent lamp recycling  
          program.  Requires a retailer who receives funds from energy  
          distribution charges for a fluorescent lamp program to provide  
          in-store collection opportunities for recycling fluorescent  
          lamps.  Prohibits, on and after January 1, 2011, the sale of new  
          general purpose lighting fixtures that contain preheat ballasts  
          for the operation of preheat linear fluorescent lamps.  
           
          The Senate amendments  : 

          1)Prohibit, on and after January 1, 2011, the sale of new  
            general lighting purpose lighting fixtures that contain  
            preheat ballasts for operation of preheat linear fluorescent  
            lamps.


          2)Define terms for the purposes of the chapter.











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          3)Prohibit funds generated from energy distribution charges from  
            being distributed to any manufacturer for the purchase and  
            distribution of compact fluorescent lamps, unless all of the  
            following conditions, along with conditions that were in the  
            Assembly version of the bill, exist:



             a)   All compact fluorescent lamps purchased contain no more  
               mercury than the amount referenced in the most recent  
               ENERGY STAR version, or four milligrams of mercury for any  
               basic lamp of up to 25 watts, whichever is less; and,



             b)   Packaging for the subsidized compact fluorescent lamps  
               has a label informing consumers that disposing of  
               fluorescent lamps in the solid waste stream is prohibited  
               and informing consumers about opportunities for proper  
               recycling. 



          4)Authorize the manufacturer to contract with a retailer for  
            collection of end-of-life residential fluorescent lamps. 



          5)Prohibit funds from energy distribution charges from being  
            used to pay for manufacturer or retailer recycling activities  
            required by this bill.



          6)Establish requirements for the residential fluorescent lamp  
            recycling program, including that the program must be  
            established within 90 days of receiving funds; demonstrate  
            sufficient funding; be free and convenient to all consumers;  
            and, include education and outreach efforts, as specified.










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          7)Require manufacturers of residential fluorescent lamps, within  
            one year of implementing a residential fluorescent lamp  
            recycling program, and annually thereafter, to submit a report  
            to the California Integrated Waste Management Board (CIWMB)  
            describing its residential fluorescent lamp recovery efforts. 



          8)Add CIWMB authority and requirements in relation to  
            residential fluorescent lamp collection and recycling  
            programs, including:



             a)   Require the CIWMB to review the annual report and within  
               90 days of receipt to adopt a finding of compliance or  
               noncompliance with the provisions of this bill;



             b)   Require the CIWMB, prior to adopting a finding of  
               compliance or noncompliance, to notify manufacturers and to  
               provide the manufacturer with an opportunity to cure its  
               noncompliance or argue that the finding of noncompliance is  
               in error.  Require the CIWMB, if the manufacturer does not  
               persuade the board that it is in compliance, to post a  
               notice listing the manufacturer as not in compliance;



             c)   Authorize manufacturers that have been listed as  
               non-compliant, but can demonstrate to the satisfaction of  
               the CIWMB that they are in compliance, to request a  
               certification letter from the CIWMB to that effect;



             d)   Require the CIWMB to enforce the requirements of the  










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               bill; and,



             e)   Require the CIWMB to establish administrative fees to be  
               paid by CFL manufacturers to cover the cost of reviewing  
               and approving the annual report and the cost of oversight  
               and enforcement of the residential fluorescent lamp  
               recycling program.  Prohibit the fee from exceeding $5,000  
               per manufacturer and require the fee to bear a reasonable  
               relationship to actual costs.



          9)Delete provisions that:


             a)   Give the CFL manufacturer or distributor of CFLs the  
               option of agreeing to pay a fee for each CFL for which  
               energy distribution charge funding is received instead of  
               implementing a recycling program for CFLs; and,

             b)   Create a Fluorescent Lamp Recycling Fund in the State  
               Treasury, to be administered by the Department of Toxic  
               Substances Control, to make payments to retailer-based  
               collectors, local governments, and other approved  
               collectors of residentially-generated fluorescent lamps.
              
          AS PASSED BY THE ASSEMBLY  , this bill:

          1)Prohibited the distribution of moneys from energy distribution  
            charges for the purchase and distribution of compact  
            fluorescent lights that did not meet specified standards or to  
            retailers that did not establish a recycling program.  
          2)Established a per subsidized fluorescent lamp fee to fund  
            payments to approved collectors of fluorescent lamps.  
           
          FISCAL EFFECT  :  According to the Senate Appropriations  
          Committee, CIWMB review of reports and enforcement will cost  
          between $20,000 and $40,000 per year, to be funded by the  
          Integrated Waste Management Account (fully offset by fees).










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           COMMENTS  :  The California Public Utilities Commission's energy  
          efficiency programs are funded by charges applied to each  
          customer's energy bill within each utility's service territory  
          (energy distribution charges).  Since 1999, as part of these  
          energy efficiency programs, investor owned utilities (IOUs) have  
          funded a lighting incentive program to provide 'pre-bates' to  
          CFL manufacturers and distributors in order to buy down the  
          purchase price of CFLs sold at retail.  CFLs use about 75% less  
          energy than incandescent bulbs, overall.  Last year, the IOUs  
          spent approximately $60 million collectively to buy down the  
          price of an estimated 30 million lamps.  The IOUs have proposed  
          spending about $45 million annually to subsidize fluorescent  
          lamp purchases over the next three years.

          Proponents of AB 1173 assert that the main criteria used by the  
          IOUs to determine eligibility for these lighting incentive  
          programs have been price.  These low-priced lamps, often  
          imported, tend to have higher levels of mercury than those  
          manufactured in the United States.  Mercury is an essential part  
          of CFLs because it allows the bulb to be an efficient light  
          source.  Unfortunately, mercury is also a reproductive toxicant  
          and can harm the brain, heart, kidneys, lungs, and immune  
          systems of people of all ages.  Because of these risks, the  
          public is prohibited from disposing CFLs in the solid waste  
          stream.

          Since IOUs continue to include substantial subsidies for  
          fluorescent lamp purchases in their energy efficiency programs,  
          tens of millions of CFLs will be purchased, installed, and  
          eventually discarded in California.  Currently, there is no  
          convenient and cost effective infrastructure in place for  
          California residents to recycle their lamps.  This bill limits  
          eligibility for energy distribution charges to only those  
          manufacturers and retailers whose lamps meet certain criteria,  
          including low levels of mercury, and who create a program for  
          collecting and properly recyling spent compact fluorescent  
          lights. 
           
          GOVERNOR'S VETO MESSAGE  :











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            This bill creates a new program for the recycling of  
            certain residentially-generated fluorescent lamps.  While  
            I applaud the author's intent, this bill inappropriately  
            links a waste and toxics reduction program to  
            California's world-renowned energy efficiency efforts.
             
            Current law requires the state's investor-owned and  
            publicly-owned utilities to charge consumers a public  
            goods charge and use a portion of the money collected on  
            energy efficiency programs.  One of those programs has  
            traditionally been to incentivize the purchase of more  
            energy-efficient compact fluorescent lamps (CFLs) by  
            providing monetary incentives to both manufacturers and  
            retailers to reduce the increased costs of CFLs to the  
            consumer.
             
            By tying CFL recycling mandates to a manufacturer or  
            retailers' participation in CFL energy efficiency  
            programs, this bill creates a reverse incentive that  
            could force manufacturers and retailers to choose not to  
            participate in either program.  The result is no new  
            improvement to CFL recycling and a potential increase in  
            the costs of CFLs to consumers, which decreases CFL sales  
            and undermines our energy-efficiency efforts.

                      
             Analysis Prepared by  :    Shannon McKinney / E.S. & T.M. /  
            (916) 319-3965 

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