BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2398|
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THIRD READING
Bill No: AB 2398
Author: John A. Perez (D)
Amended: 8/20/10 in Senate
Vote: 21
SENATE ENV. QUALITY COMMITTEE : 5-2, 6/28/10
AYES: Simitian, Corbett, Hancock, Lowenthal, Pavley
NOES: Runner, Strickland
SENATE APPROPRIATIONS COMMITTEE : 7-4, 8/12/10
AYES: Kehoe, Alquist, Corbett, Leno, Price, Wolk, Yee
NOES: Ashburn, Emmerson, Walters, Wyland
ASSEMBLY FLOOR : 49-27, 6/2/10 - See last page for vote
SUBJECT : Product stewardship: carpet
SOURCE : Author
DIGEST : This bill requires carpet manufacturers to
implement stewardship programs to increase the recycling
rate of carpet in the state. After April 1, 2012, this
bill prohibits the sale of carpet in the state by a
manufacturer that is not part of a stewardship organization
with an approved plan. This bill requires an assessment
per unit of carpet sold in the state to pay for the costs
of the stewardship plans.
Senate Floor Amendments of 8/20/10 (1) define terms used in
the new Chapter added by the bill, (2) extend the time that
CONTINUED
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the Carpet American Recovery Effort organization will be
the stewardship organization for the industry from January
2013 until April 2015, (3) clarify the penalty provisions,
(4) clarify the process for the establishment and
assessment of the fee to implement the new Chapter, (5)
provide an exclusion to anti-trust provisions for certain
activities undertaken by the stewardship organization, (6)
require the Department of General Services to ensure that
end-of-life carpet removed from state buildings is properly
managed in accordance with the Chapter, and (7) make other
technical and clarifying changes.
ANALYSIS :
Existing law:
1. Establishes procedures and requirements for the purchase
of recycled content items such as paper by state
agencies. (Section 12209 of the Public Contract Code
[PCC])
2. Establishes procedures for the procurement by state
agencies of environmentally preferable products, as
defined, including providing state agencies with
information and assistance regarding environmentally
preferable purchasing including, but not limited to, the
development, to the extent fiscally feasible, of an
environmentally preferable purchasing best practices
manual for state purchasing employees. (PCC Section
12400 et seq.)
This bill:
1. Requires, by September 30, 2011, a manufacturer of
carpets sold in this state, individually or through a
carpet stewardship organization, to submit a carpet
stewardship plan to the Department of Resources
Recycling and Recover (DRRR), to include specified
elements, including a funding mechanism that provides
sufficient funding to carry out the plan, including
administrative, operational, and capital costs of the
plan.
2. Requires the funding mechanism to establish and provide
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for, on and after January 1, 2013, a carpet stewardship
assessment to be added to the purchase price per unit of
carpet sold in the state by a manufacturer to a
California retailer or wholesaler or otherwise sold for
use in the state and requires each retailer and
wholesaler to add the assessment to the purchase price
of all carpet sold in the state.
3. Requires, until April 1, 2015, the Carpet America
Recovery Effort (CARE), a third-party nonprofit
stewardship organization, to serve as the carpet
stewardship organization and allows, on and after April
1, 2015, a carpet stewardship organization appointed by
one or more manufacturers, to submit a plan.
4. Requires, as of July 1, 2011, until January 1, establish
and provide for, on and after January 1, 2013, a carpet
stewardship assessment to be added to the purchase price
per unit of carpet sold in the state by that
manufacturer. Requires the assessment to be remitted on
a quarterly basis, as appropriate, to CARE or allows the
manufacturer to retain that assessment.
5. Requires these revenues to be spent by CARE or by an
individual manufacturer, prior to approval of its carpet
stewardship plan, only to implement early action
measures that are consistent to achieve measurable
improvements in the landfill diversion and recycling of
postconsumer carpet.
6. Requires DRRR to, among other things, within 60 days
after receiving a plan, to review and determine whether
the plan complies with the bill's requirements and
notify the submitter of its decision. Specifies that
any plan not approved by March 31, 2012, is out of
compliance until determined to be complete by the DRRR.
7. Provides that a manufacturer, wholesaler, or retailer,
on and after April 1, 2012, that offers carpet for sale
or promotional purposes without an approved plan for
that carpet is not in compliance with the act's
requirements.
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8. Requires DRRR, by July 1, 2012, and not later than
January 1 and July 1 annually thereafter, to post a
notice on its Internet Web site listing manufacturers
that are in compliance with the bill's requirements.
Requires a wholesaler or retailer that distributes or
sells carpets to monitor the DRRR's Internet Web site to
determine if the sale of a manufacturer's carpet is in
compliance.
9. Requires the carpet stewardship organization to
demonstrate to DRRR that it has achieved continuous
meaningful improvement in the rates of recycling and
diversion and other specified goals in order to be in
compliance.
10.Requires each manufacturer of carpet sold in the state,
individually or through a carpet stewardship
organization, to prepare and submit to DRRR an annual
report describing the activities carried out pursuant to
the carpet stewardship plan.
11.Requires a manufacturer or carpet stewardship
organization submitting a carpet stewardship plan to pay
the DRRR an annual administrative fee when submitting
the plan for review and approval, as determined by DRRR.
Also requires DRRR to identify the direct development
or regulatory costs incurred prior to the submittal of
carpet stewardship plans and to establish a fee in an
amount adequate to cover those costs, to be paid by a
carpet stewardship organization that submits a carpet
stewardship plan.
12.Provides for the imposition of administrative civil
penalties upon a person who violates the bill and would
provide that the manufacturer or carpet stewardship
organization whose plan is not approved by DRRR by March
31, 2012, is subject to those penalties until the plan
is approved.
13.Establishes the Carpet Stewardship Account in the
Integrated Waste Management Fund and requires the fees
collected to be deposited in that account, for
expenditure by DRRR, upon appropriation by the
Legislature, to cover DRRR's cost to implement the
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bill's provisions. Establishes the Carpet Stewardship
Penalty Subaccount in the Integrated Waste Management
Fund and requires that the civil penalties collected
pursuant to the bill's provisions be deposited in that
subaccount, for expenditure, upon appropriation by the
Legislature, to cover DRRR's costs to implement the
bill's provisions.
14.Requires DRRR and the Department of General Services
(DGS) to complete a study, by January 1, 2014, that
examines the specifications for carpet purchases by the
state, as provided in the NSF/ANSI 140-2007 Standard,
Platinum Level, and to submit the study to the Governor
and the Legislature, including recommendations for any
appropriate changes to that standard.
15.Provides that certain actions of a carpet stewardship
organization or its members are not violations of the
Cartwright Act or certain provisions regulating unfair
business practices or unfair competition.
16.Requires DGS to revise relevant procurement rules to
ensure that postconsumer carpet that is removed from
state buildings is managed in a manner consistent with
the purposes of the bill.
17. Requires the Department of Toxic Substances Control
(DTSC) to fully consider the measures taken by the
carpet industry pursuant to the program established by
the bill, and the results of those measures, when
considering whether to include carpet in DTSC's
chemicals of concern product registry, as specified.
Comments
According to DRRR's "2008 Statewide Waste Characterization
Study," an estimated 1.3 million tons of carpet is disposed
in California landfills annually, comprising 3.2 percent of
all solid waste. Carpet can be recycled and can be
manufactured using recycled-content. According to the
United States Environmental Protection Agency, barriers to
effective recycling include the lack of an established
infrastructure for the collection and processing of waste
carpet, especially from residential sources.
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Department of General Services (DGS) platinum/gold
standard . The California Gold Sustainable Carpet Standard
(standard) was developed through a collaborative effort by
members of California's Environmentally Preferable
Purchasing (EPP) Task Force, and was adopted by the
Department of General Services by State Administrative
Manual (SAM) Management Memo 06-08, on May 15, 2006. This
action placed a requirement into the SAM for all state
carpet purchases to meet the standard. The standard was
based on the Draft American National Standard for Trial
Use, NSF 140 Sustainable Carpet Assessment Standard (Draft
Standard), developed as part of the ongoing efforts of a
number of interested parties to document and improve the
sustainability profile of carpet and rug products using
established and/or advanced scientific principles,
practices, materials and standards. Stakeholders involved
in developing the Draft Standard included carpet and rug
manufacturers, end users such as interior design
professionals, state agencies responsible for
environmentally preferable product procurement practices,
academics and non-governmental organizations. The standard
takes the NSF-140 national standard further by adding 14
additional prerequisites in areas important to California
and a full 100 percent audit by a third party certification
organization, as well as at least 52 credits overall from
all categories. California Platinum certification requires
all prerequisites and at least 71 credits overall from all
categories. Additionally, California Gold only recognizes
and accepts products that meet these highest two levels -
California Gold and California Platinum. The additional
prerequisites added include requirements such as:
1. Carpet must contain at least 10 percent postconsumer
content.
2. Carpet must meet the low-emission requirements of the
Carpet and Rug Institutes Green Label Plus" program or
Californias Section 01350 specification.
3. Carpet must not contain polybrominated diphenyl ether
flame retardants.
4. Manufacturers must have completed a life cycle
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assessment process for the product category.
5. Manufacturers must meet CARE recycling goals.
Extended producer responsibility (EPR) . Rather than
seeking to manage waste after it has been produced, this
bill seeks to implement EPR, which addresses waste
generation 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, which each year amount to
hundreds of millions of dollars. 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.
EPR was the adopted policy of the former Integrated Waste
Management Board (IWMB) (eliminated pursuant to SB 63
[Strickland], Chapter 21, Statutes of 2009, as of January
1, 2010). The IWMB's EPR Framework, developed and adopted
after two years of public workshops and meetings with local
governments, legislative members, retailers, and producers,
was supported by the League of California Cities,
California State Association of Counties, and the Regional
Council of Rural Counties. This bill is consistent with
that framework.
Current industry product stewardship efforts . The carpet
industry has attempted to address these issues through a
voluntary product stewardship program. CARE is a
third-party entity created in 2002 by a memorandum of
understanding (MOU) between carpet producers, federal,
state, and local government agencies, and non-governmental
organizations. The MOU was signed by the California
Integrated Waste Management Board (now DRRR) and three
California carpet manufacturers. The MOU established
national goals over a 10-year timeframe to increase the
amount of recycling and reuse of post-consumer carpet, with
a final goal of 40 percent diversion from landfill disposal
by 2012. CARE is tasked with monitoring, evaluating, and
assessing progress toward the MOU's goals. While the goals
of this program are laudable, the diversion numbers are not
keeping pace with the goals. In 2007, the percentage of
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carpet recycled and diverted from landfill disposal was 4.9
and 5.3, respectively; in 2008, these percentages were 4.3
and 5.2. This lack of progress is part of the rationale
provided by DRRR when they opted out of MOU participation
in the next cycle, currently being negotiated for 2012.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12
2012-13 Fund
Oversight of $290 $280 $280
Special*
stewardship plans
* Integrated Waste Management Account. Ultimately
to be covered by fees.
SUPPORT : (Verified 8/23/10)
Association of Bay Area Governments
Bentley Prince Street Carpets
California Product Stewardship Council
California Refuse Recycling Council
California Resource Recovery Association
California Retailers Association
California State Association of Counties
Californians Against Waste
Carpet and Rug Institute
City and County of San Francisco
Cities of Camarillo, Eureka, Oakland, Sacramento,
Torrance, Ventura, and Vernon
Interface Carpets
League of California Cities
Los Angeles Fiber
Marin County Hazardous and Solid Waste Management Joint
Powers Authority
Marin Sanitary Services
Natural Resources Defense Council
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Sierra Club California
Solid Waste Association of North America
StopWaste.org
OPPOSITION : (Verified 8/23/10)
Cal-Tax
Lassen Regional Solid Waste Management Authority
ARGUMENTS IN SUPPORT : Supporters generally purport an
EPR approach to the management of carpet removes the
financial burden of managing the end-of-life product from
local governments and ratepayers and taxpayers to the
producers to be included in the cost of doing business.
This approach also provides an incentive to design carpet
that is more environmentally friendly and more easily
recycled.
ARGUMENTS IN OPPOSITION : No letter on file.
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Bass, Beall, Block, Blumenfield,
Bradford, Brownley, Buchanan, Caballero, Charles
Calderon, Carter, Chesbro, Coto, Davis, De La Torre, De
Leon, Eng, Evans, Feuer, Fong, Fuentes, Furutani,
Galgiani, Hall, Hayashi, Hernandez, Hill, Huber, Huffman,
Jones, Bonnie Lowenthal, Ma, Mendoza, Monning, Nava, V.
Manuel Perez, Portantino, Ruskin, Salas, Saldana,
Skinner, Solorio, Swanson, Torlakson, Torres, Torrico,
Yamada, John A. Perez
NOES: Adams, Anderson, Bill Berryhill, Blakeslee, Conway,
Cook, DeVore, Emmerson, Fletcher, Fuller, Gaines,
Garrick, Gilmore, Hagman, Harkey, Jeffries, Knight,
Logue, Miller, Nestande, Niello, Nielsen, Norby, Silva,
Smyth, Tran, Villines
NO VOTE RECORDED: Tom Berryhill, Lieu, Audra Strickland,
Vacancy
TSM:mw 8/23/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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