BILL ANALYSIS Ó AB 488 Page 1 Date of Hearing: April 15, 2013 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Wesley Chesbro, Chair AB 488 (Williams) - As Amended: April 8, 2013 SUBJECT : Recycling: household batteries SUMMARY : Requires producers of non-rechargeable household batteries to develop and implement a plan to collect and manage batteries sold in the state. EXISTING LAW: 1)Under the California Integrated Waste Management Act of 1989, requires each city or county to divert 50 percent of solid waste from landfill disposal or transformation on and after January 1, 2000. The Act establishes a statewide policy goal that not less than 75 percent of solid waste be source reduced, recycled, or composted on and after January 1, 2020. 2)Establishes the California Oil Recycling Enhancement Act, which requires manufacturers of used oil to pay a fee of 4 cents per quart (16 cents per gallon) to the Department of Resources Recycling and Recovery (CalRecycle), which then pays a recycling incentive of 4 cents per quart to industrial generators, curbside collection program operators, and certified used oil collection centers for used oil collected from the public and transported for recycling. The Act includes related grants and loans, development and implementation of an information and education program, and a reporting, monitoring, and enforcement program. 3)Establishes the Electronic Waste Recycling Act of 2003, which requires a retailer selling a covered electronic device (CED) in California to collect a recycling fee (between $3 and $5) from the consumer. Fees are deposited into the Electronic Waste Recovery and Recycling Account, which is continuously appropriated to CalRecycle and the Department of Toxic Substances Control (DTSC) to make electronic waste recovery payments to cover the net cost of an authorized collector in operating a "free and convenient" system for collecting, consolidating, and transporting CEDs, and to make electronic waste recycling payments to cover an electronic waste AB 488 Page 2 recycler's average net cost of receiving, processing, and recycling CEDs. The Act defines CED as a product that contains a video display device 4 inches and larger. 4)Establishes the Cell Phone Recycling Act, which requires every retailer of cell phones to have in place a system for the acceptance and collection of used cell phones for reuse, recycling, or proper disposal. 5)Establishes the Rechargeable Battery Recycling Act, which requires every retailer of rechargeable batteries to have in place a system for the acceptance and collection of used rechargeable batteries for reuse, recycling, or proper disposal. 6)Establishes the Dry Cell Battery Management Act, which establishes requirements for the production and labeling of consumer products with dry cell batteries and sets limits on the amount of mercury in those batteries. 7)Establishes the Mercury Thermostat Collection Act, which requires manufacturers to establish and maintain a program for mercury-added thermostats. Requires the program to include collection, handling, and arranging for appropriate management of mercury-added thermostats. 8)Requires pharmaceutical manufacturers that sell or distribute a medication in California that is usually self-injected at home with a hypodermic needle to submit to CalRecycle a plan that describes any actions taken by the manufacturer for the safe collection and proper disposal of the waste devices by July 1, 2010, and annually thereafter. 9)Establishes the Product Stewardship for Carpets Program, which requires manufacturers of carpet sold in California to submit a carpet product stewardship plan to CalRecycle that demonstrates how waste carpet will be collected and properly managed. 10)Establishes the Architectural Paint Recovery Program, which requires architectural paint manufacturers to develop and implement a program to manage waste latex paint. 11)Under the Unfair Business Practices Act, imposes civil liability and criminal penalties for any unlawful, unfair, or AB 488 Page 3 fraudulent business act. THIS BILL establishes a product stewardship program for household batteries. Under the program: 1)Defines the terms used in the program, including: a) "Baseline of the number of household batteries collected by all producers subject to the plan" as the average of all batteries collected for the previous three calendar years. b) "Brand" as the name, symbol, word, or traceable mark that identifies a household battery. c) "Collection rate" as the amount of batteries a producer or battery stewardship organization is required to collect by a specified date. d) "Household battery" as rechargeable and non-rechargeable household batteries made of mercury, alkaline, carbon zinc, nickel-cadmium, and other batteries typically generated as household waste, including those used in hearing aids, cameras, watches, computers, calculators, flashlights, lanterns, lighting, portable radios and televisions, meters, toys, and clocks. Excludes: lead-acid batteries, batteries sold in covered electronic devices, batteries not easily removable or not intended or designed to be removed from the product. e) "Household battery stewardship organization" or "organization" as an organization appointed by one or more producers to act as an agent on their behalf of to design, submit, and administer a household battery stewardship plan. f) "Household battery stewardship plan" or "plan" as a plan submitted to CalRecycle by a producer or organization pursuant to the requirements of the bill. g) "Recycling" as the process of collecting and preparing recyclable materials and reusing the materials in their original form or using them in manufacturing processes that do not cause the destruction of recyclable materials in a manner that precludes further use. AB 488 Page 4 h) "Nonrechargable battery" as a battery weighing two kilograms or less that is not designed to be electronically recharged. Includes, but is not limited to, alkaline manganese, carbon zinc, lithium, silver oxide, and zinc air batteries. i) "Producer" as one of the following: i) The person who manufactures the household battery and who sells, offers for sale, or is the distributor of, that household battery in the state under that person's own name or brand; or, ii) If there is no person who meets the above definition, the owner or licensee of a trademark or brand under which the household battery is sold or distributed in the state, whether or not the trademark is registered. j) "Retailer" as the person that offers new household batteries in a retail sale, including remote offerings and Internet sales. aa) "Wholesaler" as a person that offers new household batteries for sale in the state at a sale that is not a retail sale, and for which the batteries are intended to be resold. 2)On or before January 1, 2015, requires each producer or organization to submit a product stewardship plan to CalRecycle. 3)Requires that any organization formed to develop and implement a plan must include "one voting member" from each of the following, with priority given to members located in California: a) Retailers; b) Local governments; c) Public representatives; d) Haulers; and, AB 488 Page 5 e) Recyclers. 4)Requires the producer or organization to consult with stakeholders, solicit stakeholder comments, and respond to any comments received. 5)Requires that the plan include the following: a) The collection rate for the household batteries subject to the plan, as specified, which must be at least a 25 percent increase over the baseline; b) Contact information for the producers and a description of all brands included in the plan; c) Information regarding the number and type of "convenient collection opportunities provided free of charge" for consumers in all counties of the state, and ways that the existing collection infrastructure can be maximized to achieve the goals of the program; d) A description of the methods that will be used to recycle the batteries collected; e) Outreach procedures and educational activities; f) Methods for "disposing of" batteries collected; and, g) The financing method selected to sustainably fund the program, which shall not include a separate fee at the point of sale. 6)Authorizes the producer or organization to develop a program in conjunction with cities, counties, districts, and regional agencies. If the producer or organization develops a plan in conjunction with local agencies, requires that the program provides for one or more of the following: a) Reasonable reimbursement for the mutually agreed upon cost per pound of collected batteries; b) The location, hours, and contact information for the collection points within the local jurisdiction; and, c) Procedures for setting up a collection point within that AB 488 Page 6 local jurisdiction and providing for the pickup of batteries collected, including arrangements for disposal. 7)Allows a producer or organization to petition CalRecycle for a lower collection rate than the rate specified in the plan. Authorizes CalRecycle to approve the lower rate if it determines that there are documented exigent circumstances that are beyond the control of the producer or organization. 8)Requires CalRecycle to act on a plan submitted within 30 days, as specified, and establishes a procedure if a plan is rejected. Requires CalRecycle to post all approved plans on its website. Requires a producer or organization to notify CalRecycle 30 days prior to making any significant changes to an approved plan. 9)On or before September 1, 2015, and annually thereafter, requires CalRecycle to post a list of all approved household battery brands on its website. 10)On and after April 1, 2015, prohibits a producer, wholesaler, or retailer from offering a battery for sale that is not covered by an approved plan. 11)Specifies that retailers have 90 days to cease sales of a "noncompliant brand" (e.g., a brand not included in an approved plan and listed in CalRecycle's website). Prohibits CalRecycle from taking an enforcement action until after the 90 days have expired and requires CalRecycle to issue a compliance order 30 days before "enforcing" penalties. 12)Requires a producer or an organization to submit an annual report to CalRecycle beginning April 1, 2015, and annually thereafter. Requires that the annual report include: a) The weight of household batteries collected by the program in the prior year and the collection rate for that year; b) A report of estimated total sales data by weight for the previous three years; c) A report on the feedback from a stakeholder meeting; d) Independently audited financial statements that detail AB 488 Page 7 program financing; e) Locations, hours, and contact information for all collection sites; f) Educational materials; and, g) The manner in which the batteries collected were recycled or disposed. 13)Requires a producer or organization to pay a "plan review fee" at the time the plan is submitted and specifies that CalRecycle establish the fee at an amount to cover, but not exceed, its costs associated with reviewing, approving, and enforcing the plan. 14)Requires a producer or organization to pay an "annual administrative fee" at the time the annual report is submitted and specifies that CalRecycle establish the fee at an amount to cover, but not exceed, its costs associated with reviewing, approving, and enforcing the requirements of the bill. 15)Authorizes CalRecycle to assess administrative civil penalties not to exceed $1,000 per day against a wholesaler or retailer that violates the requirements of the bill, as specified. 16)Authorizes a producer or organization that implements a plan in compliance with the bill and incurs costs in excess of $5,000 in collecting, handling, recycling, or properly disposing batteries to bring a civil action to recover costs, damages, and fees from another producer for failure to comply with the bill, as specified. FISCAL EFFECT : Unknown COMMENTS : According to the author, more than 150 million household batteries are sold in the state annually; yet only about five percent are currently collected for recycling. AB 488 requires battery manufacturers to design, fund, and operate a stewardship program to properly manage batteries sold in California. This bill also requires battery manufacturers to increase collection and recycling 25 percent by 2019. While 25 percent is a significant increase over the current collection, which is only about five percent, it is substantially lower than AB 488 Page 8 the collection goals of similar programs. Producers and stewardship organizations are required to report annually on their progress toward meeting this goal and on plan implementation efforts to CalRecycle, which is tasked with approving and overseeing the implementation of each stewardship plan. Background on batteries . In California, household batteries are classified as universal waste, which include materials that DTSC has determined are hazardous waste that are ubiquitous and contain mercury, lead, cadmium, copper, or other substances hazardous to human and environmental health. Since 2006, universal waste has been prohibited from disposal in solid waste landfills. Product stewardship . According to the California Product Stewardship Council: Product stewardship involves consumers, government agencies, and product manufacturers sharing the responsibility of reducing the impact of product waste on public health, the environment, and the economy. Extended Producer Responsibility (EPR) is a strategy to place a shared responsibility for end-of-life product management on and all entities involved in the product chain, instead of the general public; while encouraging product design changes that minimize a negative impact on human health and the environment at every stage of the product's lifecycle. This allows the costs of treatment and disposal to be incorporated into the total cost of a product. It places primary responsibility on the producer, or brand owner, who makes design and marketing decisions. It also creates a setting for markets to emerge that truly reflect the environmental impacts of a product, and to which producers and consumers respond. Local government impacts . Currently, local household hazardous waste collection programs are the primary outlet for proper management of universal waste and other hazardous wastes generated by households, including batteries. Cost estimates to manage waste batteries average around $800 per ton (with some costing up to $2700 per ton), amounting to tens of millions of dollars each year. With decreasing revenues and increasing responsibilities on local governments, another solution is necessary to manage these products. Many local governments have AB 488 Page 9 greatly decreased, or in some instances, shuttered, their household hazardous waste programs, leaving few management options for the public. To date, 133 local resolutions have been adopted in California supporting the EPR model. Current Battery Recycling Efforts . The non-profit organization Call2Recycle is working in North America to collect and recycle rechargeable batteries. Call2Recycle operates under the Rechargeable Battery Recycling Corporation to promote "environmental sustainability by providing free battery and cell phone recycling in North America." The Call2Recycle program for rechargeable battery and cell phone recycling is available to residents, retailers, businesses, communities, municipalities, and public agencies in the U.S. and Canada. The program was created in 1994 and is funded by battery and product manufacturers to raise awareness about the importance of battery recycling and to promote product stewardship initiatives. In 2006, the European Commission adopted the Batteries Directive 2006/66/EC, which requires member states of the European Union to reach a 25 percent collection rate by 2012 and 45 percent by 2016. The directive also establishes toxicity limits for batteries. Prior legislation . SB 515 (Corbett, 2011) would have required a producer of batteries sold in California to develop and implement a household battery stewardship plan describing how it would achieve collection of household batteries and the maximum feasible recovery of materials from the collected batteries. This bill was held in the Senate Appropriations Committee. SB 1100 (Corbett, 2010) was substantially similar to SB 515. This bill was held in the Assembly Rules Committee. Suggested amendments . The committee may wish to consider a number of amendments to clean-up, revise, and clarify the intent of this bill: 1)Simplify the definitions of "baseline of the number of household batteries collected by all producers subject to the plan," "brand," "collection rate," "household battery," and "recycling" and delete the unnecessary definitions of "distributor" and "sell or sales." 2)Remove references to rechargeable batteries in the definitions AB 488 Page 10 and plan requirements; rechargeable batteries are not intended to be included in the program and were added by a drafting error. 3)Delete references to the "disposal of" household batteries and replace them with "management" or "recycling" for consistency with the intent of the bill. 4)Specify that the stakeholder meeting required during development of the stewardship plan be made available to the public through telecommunications. 5)Require that the plan submitted to CalRecycle include a report on the feedback from any stakeholders' meetings. 6)Clarify that outreach efforts should be made to businesses, rather than "employers." 7)Shorten the time allotted to CalRecycle for reviewing a revised stewardship plan from 45 days to 30 days. 8)Revise the date by which CalRecycle is required to post a list of approved household battery brands and the date by which retailers and wholesalers must cease sales of batteries that are not approved by CalRecycle to April 1, 2015 and September 1, 2015, respectively. 9)Delete the requirement that the fee associated with the plan be paid at the time of plan approval. A different provision in the bill requires that the fee be paid when the plan is submitted to CalRecycle. 10)Correct references to "noncompliant brands" to specify that the provisions apply to brands not approved by CalRecycle. 11)Require producers or stewardship organizations to hold a stakeholder meeting prior to submitting the annual report, to be consistent with the reporting requirements and the stated intent of the author. 12)Delete the requirement for "independently audited financial statements," and instead authorize CalRecycle to perform audits of reported financial data. 13)Clarify that when posting the plan or annual report on its AB 488 Page 11 website, CalRecycle shall not disclose any information that is protected pursuant to the Uniform Trade Secrets Act. 14)Clarify that CalRecycle shall not "issue" rather than "enforce" a penalty against a retailer or wholesaler prior to the 90-day timeline established by the bill. 15)Exempt medical devices, as defined by the federal Food, Drug, and Cosmetic Act [United States Code 18.32, Title 21, Section 321, Paragraph (h)], which would make it consistent with other state EPR programs and prevent any impact on the availability and cost of these devices. 16)Delete the provision that authorized producers to pursue cost recovery in "any court in the state, without regard to the amount in dispute," as this provision conflicts with laws that govern the roles and jurisdictions of the courts. 17)Make related technical and clarifying changes. REGISTERED SUPPORT / OPPOSITION : Support California Product Stewardship Council (sponsor) California State Association of Counties Californians Against Waste Central Contra Costa Solid Waste Authority City of Chula Vista City of Covina City of Monterey City of Roseville City of Sacramento City of San Diego City of Sunnyvale City of Torrance Contra Costa Clean Water Program Contra Costa County ECS Refining Green Cities California Marin County Hazardous and Solid Waste Management Joint Powers Authority Marin Sanitary Service Monterey Regional Waste Management District Napa County Board of Supervisors AB 488 Page 12 National Electrical Manufacturers Association Rural County Representatives of California Santa Barbara County Sierra Club California Sonoma County South Bayside Waste Management Authority (Rethink Waste) Tamalpais Community Services District Yolo County Waste Management Authority AB 488 Page 13 Opposition Advanced Medical Technology Association (AdvaMed) BayBio California Healthcare Institute California Manufacturers and Technology Association DynaVox FELD Entertainment Pharmaceutical Researchers and Manufacturers of America (PhRMA) Silicon Valley Leadership Group TechAmerica TechNet Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916) 319-2092