BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                   SB 346|
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                                 THIRD READING


          Bill No:  SB 346
          Author:   Kehoe (D), et al
          Amended:  6/1/09
          Vote:     21

           
           SENATE ENV. QUALITY COMMITTEE  :  5-2, 4/20/09
          AYES:  Simitian, Corbett, Hancock, Lowenthal, Pavley
          NOES:  Runner, Ashburn

           SENATE APPROPRIATIONS COMMITTEE  :  8-5, 5/26/09
          AYES:  Kehoe, Corbett, DeSaulnier, Hancock, Leno, Oropeza,  
            Wolk, Yee
          NOES:  Cox, Denham, Runner, Walters, Wyland


           SUBJECT  :    Hazardous materials:  motor vehicle brake  
          friction materials

           SOURCE  :     City of San Diego
                      Sustainable Conservation on Behalf of the Brake  
          Pad 
                        Partnership


           DIGEST  :    This bill reduces the use of copper and other  
          heavy metals in automobile brake friction materials  
          starting in 2014.  This bill provides for a fee on brake  
          friction materials sold in the state to fund the activities  
          specified in the bill.

           Senate Floor Amendments  of 6/1/09 require manufacturers of  
          brake pads to submit two additional reports (for a total of  
                                                           CONTINUED





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          four reports) on their progress in reducing the amount of  
          copper in their product during the implementation phase of  
          the program created by this bill.  This bill has a long  
          implementation timeline (January 1, 2032) and the  
          additional reports fill in the time gaps created by the  
          long timeline.  The amendments remove "mitigation" as an  
          eligible expense for the funds generated by the fee on  
          brake pads under the new program created by the bill.

           ANALYSIS  :    

          Existing law:

          1. Requires the Department of Toxic Substances Control  
             (DTSC), by January 1, 2011, to adopt regulations to  
             establish a process to identify and prioritize chemicals  
             or chemical ingredients in consumer products that may be  
             considered a "chemical of concern," in accordance with a  
             review process, as specified.

          2. Requires DTSC, on or before January 1, 2011, to adopt  
             regulations to establish a process to evaluate chemicals  
             of concern, and their potential alternatives, in  
             consumer products in order to determine how best to  
             limit exposure or to reduce the level of  hazard posed  
             by a chemical of concern, as specified.

          3. Prohibits the manufacture, processing, and distribution  
             in products containing certain materials found to raise  
             health risks, including lead, polybrominated diphenyl  
             ethers, and phthalates.

          4. Requires the State Water Resources Control Board (SWRCB)  
             and the California regional water quality control boards  
             to regulate the discharge of stormwater in accordance  
             with the federal Clean Water Act and the Porter-Cologne  
             Water Quality Control Act.

          This bill:  

          1. Prohibits, after January 1, 2021, the sale of brake  
             friction materials in California that contain more than  
             five percent copper by weight.








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          2. Prohibits, after January 1, 2032, the sale of brake  
             friction materials in California that contain more than  
             0.5 percent copper by weight.

          3. Requires manufacturers of vehicles and brake friction  
             materials to monitor and provide four reports to DTSC on  
             their efforts to comply with the copper reduction  
             mandate.  The first report is due on or before January  
             1, 2016.  The second, on or before January 1, 2018, the  
             third on or before January 1, 2027, and the fourth on or  
             before January 1, 2029.

          4. Requires DTSC to review the reports and, within six  
             months of receipt, report the following information to  
             the Legislature:
           
             A.    A summary of the information contained in the  
                reports received.
              
             B.    Statistics on certifications issued by third-party  
                testing agencies for friction materials found to be  
                in compliance with any or all of the requirements.

             C.    A summary of the results of the monitoring of  
                copper by DTSC.

          5. Prohibits, after January 1, 2014, the sale of brake  
             friction materials in California that contain the  
             following materials in the amounts specified:

             A.    Cadmium and its compounds:  0.01 percent by  
                weight.
             B.    Chromium(VI)-salts:  0.1 percent by weight.
             C.    Lead and its compounds:  0.1 percent by weight.
             D.    Mercury and its compounds:  0.1 percent by weight.
             E.    Asbestiform fibers:  0.1 percent by weight.

          5. Requires, on or before January 1, 2013, DTSC to perform  
             a base-line survey of the levels of nickel, zinc, copper  
             and antimony in brake friction materials.

          6. Requires, on January 1, 2013 and at least every three  
             years thereafter, DTSC to monitor for nickel, zinc, and  
             antimony to ensure that the levels of those constituents  







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             to not increase more than 50 percent above the levels  
             established in the baseline study in #5 above.

          7. Requires, if the levels for any of materials in #5 above  
             exceed the 50 percent threshold established in #6 above,  
             DTSC to take further action with other state agencies as  
             specified to determine if there is a need to control the  
             use of those materials.

          8. Requires manufacturers of brake friction materials to  
             follow the process to be adopted by DTSC regarding  
             criteria to evaluate alternatives to copper in brake  
             friction materials.  

          9. Requires, on January 1, 2014, all brake friction  
             materials manufacturers to obtain certification as  
             specified to demonstrate compliance with the  
             requirements in #4 above and include that certification  
             on the brake friction materials.

          10.Requires, on January 1, 2021 and until December 31,  
             2031, all brake friction materials manufacturers to  
             obtain certification as specified as to compliance with  
             the requirements in #1 above and include that  
             certification on the brake friction materials.

          11.Requires, on January 1, 2032, all brake friction  
             materials manufacturers to obtain certification as  
             specified as to compliance with the requirements in #2  
             above and include that certification on the brake  
             friction materials.

          12.Requires vehicle manufacturers and retailers of brake  
             friction materials to ensure that only compliant brake  
             friction materials are sold in this state.

          13.Establishes a civil fine of up to $10,000 per violation  
             of the new article.

          14.Establishes DTSC as the enforcing agency for the new  
             article and permits them to remove non-compliant brake  
             friction materials from sale.

          15.Prohibits DTSC from recalling automobiles fitted with  







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             brake friction materials that do not comply with this  
             bill, but DTSC may impose fines and penalties authorized  
             under this bill on automobile manufacturers whose  
             vehicles are fitted with brake friction materials not in  
             compliance with this bill.

          16.Requires DTSC, on January 1, 2011, to impose a fee of  
             $1.00 per axle set of brake friction materials sold in  
             this state (installed in a new car and replacement and  
             requires DTSC, commencing on January 1, 2012, and every  
             year thereafter, to adjust the fee by an amount  
             necessary to compensate for inflation.  If DTSC  
             determines, after January 1, 2016, that the average  
             annual revenue from the fee is less than an amount  
             equivalent to $13,000,000 in 2011 dollars, or more than  
             an amount equivalent to $16,000,000 in 2011 dollars,  
             this bill requires DTSC to adjust the fee to an amount  
             necessary to fall within that range. 

          17.Establishes the Brake Friction Materials Water Pollution  
             Fund in the State Treasury, for deposit of the fee. 

          18.Requires that the fee be used to only cover specified  
             costs related to control of copper and other materials  
             in brake friction materials, and for making grants for  
             the purpose of planning, implementing, and measuring the  
             effectiveness of actions to improve water quality in  
             surface waters that receive runoff containing pollutants  
             for vehicle brake friction materials.

          19.Allows up to five percent of the fees collection to be  
             used for account costs of fee collection.

          20.Allows funds to be allocated by DTSC to trade  
             associations associated with brake friction materials  
             sale and manufacture for purposes of outreach to, and  
             education of, their memberships. 

          21.Requires DTSC to consult with the SWRCB regarding  
             implementation of the new article and use of the fees.

          22.Requires DTSC to keep accurate books, records, and  
             accounts of all of its dealings under this bill, and  
             provides that those books, records, and accounts, and  







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             amounts paid into or from the fund shall be subject to  
             an annual audit.

           Background  

           Total Maximum Daily Loads  .  The SWRCB has established Total  
          Maximum Daily Loads (TMDLs) as allowable pollution limits  
          on copper and other pollutants in several Southern  
          California urban watersheds.  Failure to comply with these  
          TMDLs will result in serious penalties to the responsible  
          jurisdictions.  SWRCB is working to establish these TMDLs  
          for watersheds throughout California.  The ubiquity of  
          copper in the urban environment, and the technical  
          difficulty and impracticality of treating stormwater to  
          remove it, mean that compliance with copper TMDLs will not  
          be feasible without source reduction of copper.  Cost could  
          go into the billions of dollars to remediate if source  
          reduction measures are not taken.

           The Brake Pad Partnership  .  The Brake Pad Partnership is a  
          collaborative group of brake manufacturers,  
          environmentalists, stormwater management entities, and  
          regulators that originally came together to understand the  
          impact on the environment of brake pad wear debris.  Before  
          the Partnership committed to investing significant state  
          and private resources in technical studies, the Brake  
          Manufacturers Council (BMC) and its members (primarily  
          manufacturers of original equipment friction materials)  
          agreed to introduce reformulated products if the technical  
          studies indicated that copper in brake pads was  
          contributing significantly to water quality impairment.   
          The SWRCB and the Department of Transportation together  
          contributed close to $1 million towards paying for the  
          subsequent research into the issue.  In late 2007, the  
          Partnership completed a series of interlinked laboratory,  
          environmental monitoring, and environmental modeling  
          studies that indicated that brake pads are a substantial  
          contributor to copper in runoff to the San Francisco Bay.   
          As the technical studies' results emerged, the Partnership  
          shifted its focus to determining an appropriate mechanism  
          for reducing copper in brakes in California.  

           Baseline Studies and Alternatives  .  This bill requires DTSC  
          to do work in evaluating what is currently in brake pads  







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          and keeping an eye on what the new pads will contain.  This  
          bill requires, if levels of nickel, zinc, and antimony  
          increase in pads, that DTSC consult with the appropriate  
          state agency to determine if there is a need to try to  
          limit those levels.  This type of study will allow DTSC to  
          keep abreast of the new materials in the brake pads and try  
          to prevent other public health and environmental issues.   
          This coupled with the requirement on brake pad  
          manufacturers to follow a process to evaluate alternatives  
          to copper in brake pads to ensure the alternatives to  
          copper do not have the same problematic characteristics.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

          According to the Senate Appropriations Committee:

                          Fiscal Impact (in thousands)

             Major Provisions                2009-10     2010-11     
             2011-12               Fund  

            New fee revenues                        ($7,000)   
            ($14,000)           Special*

            DTSC - developing             $35       $260       
            $850Special*
            criteria, establishing
            baseline data

            SWRCB - reporting                                 up to  
            $250                Special*

            Office of Environmental                 up to  
            $160Special*
            Health Hazard 
            Assessment - reporting

            Grants for water                        $6,700     
            $12,740             Special*
            quality improvement

             *    Brake Friction Materials Water Pollution Fund  
               (new special fund)







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          According to the Senate Appropriations Committee analysis,  
          some of the expenditures under this bill will occur before  
          the fee is enacted.  Those costs can be covered by the  
          existing balance in the Hazardous Waste Control Account,  
          until sufficient fee revenues are generated to repay the  
          fund.

           SUPPORT  :   (Verified  5/28/09)

          City of San Diego (co-source)
          Sustainable Conservation on behalf of the Brake Pad  
          Partnership (co-source)
          Akebono Brake Corporation
          Alameda County Board of Supervisors
          Alameda Countywide Clean Water Program
          Bay Area Stormwater Management Agencies Association
          California Association of Sanitation Agencies
          California Council for Environmental and Economic Balance
          California Product Stewardship Council
          California State Association of Counties
          California Stormwater Quality Association
          Calleguas Creek Watershed Management Plan
          Cities of Arcadia, Bell, Bell Gardens, Camarillo, Cerritos,  
            Clayton, Concord, Cupertino, Downey, Laguna Woods,  
            Lakewood, Long Beach Lynwood, Monte Sereno, Montebello,  
            Norwalk, Ojai, Palo Alto, Port Hueneme, San Jose, San  
            Pablo, Signal Hill, Simi Valley, Thousand Oaks, Ventura,  
            and Whittier
          City and County of San Francisco
          City of West Covina Public Works Department
          City/County Associations of Governments of San Mateo County
          Clean South Bay
          Clean Water Action
          Clear Water Consultants
          Coalition for Practical Regulation
          Coastkeeper Alliance
          Contra Costa Clean Water Program
          Contra Costa County Watershed Program
          County Sanitation Districts of LA County (if amended)
          Environmental Entrepreneurs (E2)
          Environmental Health Coalition
          Heal the Bay
          Industrial Environmental Association







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          League of California Cities 
          Natural Resources Defense Council
          Paula Daniels, Commissioner, City of Los Angeles Board of  
          Public Works
          Port of San Diego
          San Diego Coastkeeper
          San Francisco Baykeeper
          Santa Clara Valley Urban Runoff Pollution Prevention  
          Program
          Save the Bay
          Sierra Club California
          Supervisor Susan A. Bonilla, Chair, Contra Costa County  
            Board of  Supervisors
          TDC Environmental
          United States Navy
          Ventura County Board of Supervisors
          Ventura Countywide Stormwater Quality Management Program
          West Valley Clean Water Program 

           OPPOSITION  :    (Verified  5/28/09)

          Alliance of Automobile Manufacturers  
           Heavy Duty Manufacturers Association

           ARGUMENTS IN SUPPORT  :    According to the author's office,  
          elevated copper levels occur in urban watersheds across  
          California.  Dissolved copper is toxic to phytoplankton  
          (the base of the aquatic food chain).  It also impairs the  
          ability of salmon to avoid predators and deters them from  
          returning to their home streams to spawn.  Scientific  
          studies have shown that a major source of copper in highly  
          urbanized watersheds is material worn off vehicle brake  
          pads.  It is estimated that about one-half of the copper  
          found in run-off is attributed to brake pads.

          According to one of the bill's sponsors, this bill is a  
          product of a collaborative, consensus-based approach to  
          crafting a workable balance between necessary innovations,  
          long manufacturing timelines, and the stringent water  
          quality compliance deadlines facing California.  Details of  
          these studies can be found at www.suscon.org/brakepad.

          In response to the arguments in opposition (paragraph 3,  
          lines 1-5), the author's office indicates that the May 20,  







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          2009 amendments clearly specify and prioritize how the fee  
          will be used.

           ARGUMENTS IN OPPOSITION  :    The Heavy Duty Manufacturers  
          Association (HDMA) and the Heavy Duty Brake Manufacturing  
          Council (HDBMC), a technical body of HDMA, state their  
          opposition to this bill as follows:
           
            "SB 346 may jeopardize HDBMC members' abilities to comply  
            with the proposed, anticipated, but as yet unpublished  
            federal stopping distance standards.  A vast majority of  
            research and development resources (equipment, time, and  
            money) have already been dedicated to make the necessary  
            tests and changes to brake formulations in order to meet  
            this anticipated but yet unpublished federal rule.  These  
            tests, which typically take eight years to undertake,  
            also include application characteristics that involve  
            noise, wear, vibration and other customer-specific  
            requirements.  Changes to brake formulations to meet  
            potential requirements of state legislation will set the  
            industry back as much as eight years in testing alone.

            "The bill will lead to unintended consequences by forcing  
            companies to re-engineer their product lines at  
            tremendous costs under an already dire economic climate.   
            It will impact the current design and build of vehicles  
            now in production which takes several years of research  
            and development.  The legislation does not consider the  
            impact on whether or not secondary brake system  
            components will be affected by reformulated brake pads.   
            Further, SB 346 does not differentiate among light duty  
            and heavy duty brake parts, which differ in their  
            performance, design, and complexity.

            "In reference to the fees provided in SB 346, the measure  
            remains ambiguous on its intended purpose or at what  
            point in the supply chain will they be collected.  HDMA  
            strongly opposes using these fees for environmental  
            mitigation efforts not associated with brake copper  
            contents.  The bill also does not specify as to what  
            point in the supply chain the fees will be collected.  SB  
            346 does not determine whether the fees shall be  
            collected at the automotive dealership level, at the  
            repair shop, at the manufacturer level, or at the point  







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            of sale between a consumer and an auto supply store.   
            Each of these levels has unique and very burdensome  
            requirements which the bill does not take into account.   
            We believe that the infrastructure to properly collect  
            and report these fees at the manufacturer level alone  
            currently does not exist and would not be available by  
            the  2011 deadline."


          TSM:mw  6/2/09   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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