BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2139
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          ASSEMBLY THIRD READING
          AB 2139 (Chesbro)
          As Amended  June 1, 2010
          Majority vote 

           ENVIRONMENTAL SAFETY     6-3    NATURAL RESOURCES   6-3         
           
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          |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            |     |                          |
          |     |                          |     |                          |
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           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  








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            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;  








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             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  








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            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,  








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          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 


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