BILL ANALYSIS AB 2139 Page 1 ASSEMBLY THIRD READING AB 2139 (Chesbro) As Amended June 1, 2010 Majority vote ENVIRONMENTAL SAFETY 6-3 NATURAL RESOURCES 6-3 ----------------------------------------------------------------- |Ayes:|Nava, Chesbro, Davis, |Ayes:|Chesbro, Brownley, De | | |Feuer, Monning, Ruskin | |Leon, Hill, Huffman, | | | | |Skinner | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Miller, Blakeslee, Smyth |Nays:|Gilmore, Knight, Logue | | | | | | ----------------------------------------------------------------- APPROPRIATIONS 12-5 ----------------------------------------------------------------- |Ayes:|Fuentes, Ammiano, | | | | |Bradford, | | | | |Charles Calderon, Coto, | | | | |Davis, Monning, Ruskin, | | | | |Skinner, Solorio, | | | | |Torlakson, Torrico | | | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Conway, Harkey, Miller, | | | | |Nielsen, Norby | | | | | | | | ----------------------------------------------------------------- SUMMARY : Enacts the California Product Stewardship Act (Act). The Act requires the Department of Resources Recycling and Recovery (DRRR) to administer a program to develop product stewardship protocols to foster "cradle-to-cradle" producer responsibility for products. Specifically, this bill : 1)Specifies that the Act is intended to provide sound product stewardship protocols that encourage producers to research alternatives during the product design and packaging phases to foster producer responsibility and reduce the end-of-life environmental impacts. 2)Establishes criteria for "covered products" and requires the AB 2139 Page 2 Department of Resources Recycling and Recovery (DRRR) to recommend to the Legislature specific products that should be included in the program by January 1, 2012. 3)Clarifies that actions taken under the Act do not interfere with existing efforts of DTSC relating to green chemistry. 4)Establishes requirements for the producers or product stewardship organizations to create a product stewardship plan and requires the plan to be submitted by the producer to DRRR within one year of the Legislature's approval of a covered product. Requires DRRR to deem a plan complete or incomplete within 45 days of receipt. Should DRRR deem the plan incomplete the plan, requires notification to the producer, who is charged with revising the plan within 45 days. 5)Specifies that a product stewardship program complies with this chapter only if it achieves the collection rate specified in the plan. If a program achieves a collection rate of at least 95 percent, the producer or product stewardship organization is not required to pay the annual fee established by this bill. 6)Beginning six months after DRRR deems complete a plan, prohibits the sale of a covered product unless the producer is in compliance with the Act. To be in compliance the producer must submit a product stewardship plan or participation in a stewardship organization. The product stewardship plan must include: a) A description of the covered product and associated brands covered by the plan; b) Performance goals, including a description of how the performance goals will be achieved and how results will be measured; c) Collection, reuse, and recycling rates for the covered product; d) If the covered product is prohibited from being disposed of at a solid waste disposal facility, the performance goal shall include a schedule to accomplish a 100 percent collection rate; AB 2139 Page 3 e) Financing methods for the plan; f) Strategies for managing and reducing the life cycle impacts of the covered product; and, g) Education and outreach activities. 7)Beginning one year after a plan is deemed complete, and annually thereafter, requires producers and product stewardship organizations operating under the Act to submit an annual report to DRRR, which includes the status of performance goals, a description of outreach and educational activities, and actions undertaken to manage and reduce the life-cycle impacts of the covered product. 8)Establishes the Extended Producer Responsibility Account (Account) and the Extended Producer Responsibility Penalty Subaccount (Subaccount) in the Integrated Waste Management Fund. a) Requires producers subject to the Act to submit an annual fee to DRRR to cover administrative costs to be deposited into the Account. Requires DRRR to establish the fee at an amount sufficient to cover the full costs of implementing the requirements of the Act; b) Requires all penalties collected under the Act to be deposited into the Subaccount, which may be expended by DRRR to cover costs of implementing the Act; c) Specifies that the Account and Subaccount may be expended by DRRR for incentives to enhance recyclability and redesign efforts and to reduce environmental and safety impacts of covered products; and, d) If a product stewardship program achieves a collection rate of 95 percent, specifies that the producer or product stewardship organization is not required to pay the annual fee. 9)Establishes enforcement provisions for the Act, including a public hearing process. Specifies that DRRR take into account the "good faith effort" of a producer toward implementing the AB 2139 Page 4 plan. Establishes a civil penalty of $5,000 per day for violations of the Act. FISCAL EFFECT : According to the Assembly Appropriations Committee this bill has annual start up costs to DRRR 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; and, nominate covered products. (Product Stewardship Account (PSA)) This bill has potential ongoing annual cost to DRRR in the hundreds of thousands of dollars to 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. (PSA) Fee revenues, as authorized by this bill, should ultimately cover the costs of implementing and administering the provisions of this bill. (PSA) This bill also has possible savings beginning in future years, potentially in the millions of dollars annually, to various special funds to the extent DRRR's EPR program lowers costs for other waste management programs. COMMENTS : Product stewardship 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, the former California Integrated Waste Management Board (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. The EPR Framework is a strategy to share responsibility among those who make, sell, use, and dispose of products, while placing the primary responsibility on producers to reduce a product's lifecycle impacts. In other words, those who benefit from a product would share in the costs associated with the environmental impacts of the product. In addition to encouraging recycling and waste reduction, AB 2139 Page 5 product stewardship also addresses another pressing concern. 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). Currently, the costs associated with managing household products prohibited from landfill disposal are borne by local governments. According to the League of California Cities, "Cities and counties in California spend upwards of $500 million annually to manage products banned from landfills as well as those disposed of at the landfill - a cost that local governments ultimately end up passing on to the consumers in the form of fees on solid waste services." According to the author, "The California Product Stewardship Act requires manufacturers of hazardous products to create products that are less toxic, more durable and easier to recycle when they enter the waste stream. AB 2139 proposes an Extended Producer Responsibility Framework, which would establish one law to address a wide range of products. These waste products end up in California landfills and make a significant impact on our environment." The goal of the EPR framework is to 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 former CIWMB's EPR Framework. Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916) 319-2092 FN: 0004731