BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 346| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 SB 346 Page 2 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. SB 346 Page 3 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 SB 346 Page 4 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 SB 346 Page 5 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 SB 346 Page 6 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 SB 346 Page 7 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) SB 346 Page 8 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 SB 346 Page 9 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, SB 346 Page 10 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 SB 346 Page 11 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 **** END ****