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  








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            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  








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            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.  









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             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,









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             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  








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               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  








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               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  








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          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  








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          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
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            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
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            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








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          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
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           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