BILL ANALYSIS Ó AB 837 Page 1 Date of Hearing: May 2, 2011 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Wesley Chesbro, Chair AB 837 (Nestande) - As Amended: March 31, 2011 SUBJECT : Solid waste: plastic food and beverage containers SUMMARY : Prohibits a manufacturer or supplier from selling a plastic food or beverage container that is advertised with a specific recycling content amount unless the manufacturer or supplier is able to provide certification of that claim in a format that is easy to understand and scientifically accurate. EXISTING LAW : 1)Imposes civil liability and criminal penalties for any unlawful, unfair, or fraudulent business act or any unfair, deceptive, untrue, or misleading advertising. 2)Prohibits a person from selling a food or beverage container that is labeled "compostable" or "marine degradable," unless the container meets specific American Society for Testing and Materials (ASTM) standards. Authorizes a city, county, or the state to impose civil liability in the amount of $500 for the first violation of this law, $1,000 for the second violation, and $2,000 for the third and any subsequent violation. THIS BILL : 1)Prohibits a manufacturer or supplier from selling a plastic food or beverage container that is advertised with a specific recycling content amount unless the manufacturer or supplier is able to provide certification of that claim in a format that is easy to understand and scientifically accurate. 2)Requires a manufacturer or supplier to provide information and documentation verifying the recycling content of a plastic food or beverage container within 90 days of a request for such information made by a member of the public or a state agency. 3)Defines "manufacturer" as a person, firm, association, partnership, or corporation that produces a plastic food or beverage container. AB 837 Page 2 4)Defines "supplier" as a person who purchases plastic food or beverage containers from a manufacturer for sale or distribution in this state. 5)Authorizes a city, county, or the state to impose civil liability in the amount of $500 for the first violation of the bill, $1,000 for the second violation, and $2,000 for the third and any subsequent violation. FISCAL EFFECT : Unknown AB 837 Page 3 COMMENTS : 1)Background. According to the author, the bill promotes truth in advertising and helps stop the practice of "greenwashing." Greenwashing refers to a false or inaccurate suggestion that products, brands or corporate policies are ecologically conscious. Existing state law prohibits a person from falsely labeling a plastic food or beverage container as compostable. In a similar way, this bill would prohibit a person from falsely advertising the recycled content of a plastic food or beverage container. The Integrated Waste Management Act and Global Warming Solutions Act establish policies that support recycling for the purpose of diverting waste from landfills and reducing greenhouse gas emissions. Many California consumers consciously advance these policies by supporting products made from recycled materials. The bill protects these conscientious consumers by deterring fraud in the marketplace as it relates specifically to plastic food and beverage containers. The bill also promotes a level playing field among producers of plastic food and beverage containers. 2) Federal Law. Under federal law, unfair or deceptive acts or practices in or affecting commerce are declared unlawful. 15 U.S.C. § 45. The Federal Trade Commission (FTC) has published guides that help explain the effect this law has on environmental advertising and marketing practices, such as claims regarding degradability and recycling content. The guides provide specific examples of claims that demonstrate how the law works. 3)Previous Legislation. AB 2147 (Harman) Chapter 349, Statutes of 2006 prohibits the sale of a plastic food or beverage container that is labeled as "biodegradable," "compostable," "degradable," or otherwise unless the container meets current American Society for Testing Materials (ASTM) standard specifications for the term used on the label. AB 2071 (Karnette) Chapter 570, Statutes of 2008 imposes penalties for failure to comply with AB 2147. 4)To Whom Should the Bill's Requirements Apply? The bill applies to manufacturers and suppliers who sell plastic food or beverage containers that are advertised with a specific recycling content. A "manufacturer" is defined as a person AB 837 Page 4 who produces a plastic food or beverage container. A "supplier" is defined as a person who purchases plastic food or beverage containers from a manufacturer for sale or distribution in this state. Under this definition of supplier, a person can avoid liability by simply purchasing containers from an intermediary rather than directly from the manufacturer. This loophole could benefit a person who knowingly sells containers with incorrect recycling content labels. The committee and author may wish to amend the bill to redefine "supplier" to close this loophole. REGISTERED SUPPORT / OPPOSITION : Support None on file AB 837 Page 5 Opposition California Nevada Soft Drink Association Grocery Manufacturers Association Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916) 319-2092