BILL ANALYSIS AB 1173 Page 1 GOVERNOR'S VETO AB 1173 (Huffman) As Amended September 4, 2009 2/3 vote ----------------------------------------------------------------- |ASSEMBLY: |51-25|(June 2, 2009) |SENATE: |21-17|(September 10, | | | | | | |2009) | ----------------------------------------------------------------- ----------------------------------------------------------------- |ASSEMBLY: |52-27|(September 11, | | | | | | |2009) | | | | ----------------------------------------------------------------- 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. AB 1173 Page 2 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. AB 1173 Page 3 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 AB 1173 Page 4 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). AB 1173 Page 5 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 : AB 1173 Page 6 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 FN: 0003418