Amended in Assembly April 6, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1159

Introduced by Assembly Members Gordon and Williams

February 27, 2015

begin delete An act to add Section 42872.3 to the Public Resources Code, relating to tire recycling. end delete begin insert An act to add and repeal Chapter 19.5 (commencing with Section 42968) of Part 3 of Division 30 of the Public Resources Code, relating to solid waste. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1159, as amended, Gordon. begin delete Tire recycling: incentive program. end delete begin insert Product stewardship: pilot program: household batteries and home-generated sharps waste. end insert

begin insert

The California Integrated Waste Management Act of 1989, administered by the Department of Resources Recycling and Recovery, is required to reduce, recycle, and reuse solid waste generated in the state to the maximum extent feasible in an efficient and cost-effective manner to conserve water, energy, and other natural resources.

end insert begin insert

Existing law requires a pharmaceutical manufacturer selling or distributing medication that is intended to be self-injected at home to submit, on an annual basis, to the Department of Resources Recycling and Recovery a plan supporting the safe collection and proper disposal of specified waste devices.

end insert begin insert

Existing law leaves in operation Department of Toxic Substances Control regulations, adopted until January 1, 2008, to exempt a hazardous waste management activity, including management of hazardous waste batteries, from certain statutory requirements related to hazardous waste management if specified conditions for exemption are met, including that the regulations identify the waste as a universal waste.

end insert begin insert

This bill would establish the Product Stewardship Pilot Program and, until January 1, 2024, would require producers and product stewardship organizations of covered products, defined to mean a consumer product that is used or discarded in this state and is either home-generated sharps waste or household batteries, to develop and implement a product stewardship plan, as specified.

end insert begin insert

This bill would require, by July 1, 2017, a producer of a covered product, individually or through a product stewardship organization, to submit a product stewardship plan to the Department of Resources Recycling and Recovery. The bill would require the product stewardship plan to include specified elements, including strategies to achieve performance standards and a funding mechanism that provides sufficient funding to carry out the plan. The department would be required to review and determine whether the plan is complete and, if complete, determine whether to approve or not approve the plan. The bill would require the department to notify the submitter of its decision to approve or not approve the plan, and, if the department does not approve the plan, would require the department to describe the reasons for its disapproval. The bill would authorize the submitter to revise and resubmit the plan and would specify that a plan not approved by January 1, 2018, is out of compliance.

end insert begin insert

The bill would require a producer or product stewardship organization implementing a product stewardship plan to prepare and submit to the department an annual report describing the activities carried out pursuant to the product stewardship plan, including whether the producer or product stewardship organization, in implementing the plan, attained the performance standards for the covered product, and if the performance standards were not met, what actions the producer or product stewardship organization will be taking to attain those performance standards.

end insert begin insert

A producer or product stewardship organization submitting a product stewardship plan would be required to pay the department, on an unspecified schedule, an annual administrative fee, as determined by the department. The bill would require the fee be set at an amount that, when paid by every product stewardship organization that submits a product stewardship plan, is adequate to cover the department’s full costs of administering and enforcing the program. The bill would provide for the imposition of administrative civil penalties upon a person who violates the bill and would provide that a plan submitter whose plan is not approved by the department by July 1, 2018, is subject to those penalties until the plan is approved. The bill would establish the Product Stewardship Account in the Integrated Waste Management Fund and would require the fees collected by the department to be deposited in that account, for expenditure by the department, upon appropriation by the Legislature, to cover the department’s cost to implement the bill’s provisions. The bill would also establish the Product Stewardship Penalty Subaccount in the Integrated Waste Management Fund and would require that the civil penalties collected by the department pursuant to the bill’s provisions be deposited in that subaccount, for expenditure by the department, upon appropriation by the Legislature, to cover the department’s costs to implement the bill’s provisions.

end insert begin insert

The bill would provide that certain actions of a product stewardship organization or its members are not violations of the Cartwright Act or certain provisions regulating unfair business practices or unfair competition.

end insert begin insert

The bill would require the department, by January 1, 2017, to adopt regulations to implement these provisions, including setting performance standards for each covered product, which would include a minimum collection rate and appropriate geographic coverage, and procedures for product stewardship plan submittal. By March 1, 2017, the department would also be required to appoint a stakeholder advisory committee for each covered product to provide technical feedback to a product stewardship organization. The bill would also require the advisory committee to annually report to the department on the progress of the product stewardship organizations’ implementation of the bill’s provisions.

end insert begin insert

The bill would require the department, by July 1, 2023, to report, for each covered product, specified information to the appropriate committees of the Legislature, including, the department’s evaluation of each product stewardship organization, product stewardship organization evaluations of the department and stakeholder advisory committee, stakeholder advisory committee reports, and audited financials of each product stewardship organization. The bill would authorize the department to impose additional reporting requirements on product stewardship organizations and the stakeholder advisory committees to meet the department’s reporting requirements to the Legislature.

end insert begin delete

The California Tire Recycling Act requires a person who purchases a new tire to pay a California tire fee, for deposit in the California Tire Recycling Management Fund, for expenditure by the Department of Resources Recycling and Recovery upon appropriation by the Legislature, to pay the costs of operating a tire recycling program. The act provides that the tire recycling program may include, among other things, the development and implementation of a waste tire incentive payment program to promote increased demand for waste tires recycled in this state and to promote higher valued products.

end delete begin delete

This would require the department, as part of the tire recycling program, to establish a waste tire recycling incentive program designed to achieve, by January 1, 2018, a 75% recycling rate for waste tires generated in California.

end delete

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Chapter 19.5 (commencing with Section 42968)
is added to Part 3 of Division 30 of the end insert begin insert Public Resources Code end insert begin insert ,
to read: end insert

begin insert

 

Chapter   begin insert 19.5. end insert Product Stewardship Pilot Program

 

Article begin insert 1. end insert   Definitions

 

begin insert 42968. end insert   

“Collection rate” means the percentage of covered
products, by weight, that are collected during a calendar year by
a product stewardship organization as compared to the average
annual weight of all covered products that were estimated to have
been sold in the state during the previous three years by that
product stewardship organization’s members or the individual
producer. The collection rate of a product stewardship
organization of covered products may be based on a reasonable
pro rata calculation of national sales.

begin insert 42968.01. end insert   

“Consumer” means a purchaser, owner, or lessee
of a product, including a person, business, corporation, limited
partnership, nonprofit organization, or governmental entity.

begin insert 42968.02. end insert   

“Consumer product” means a product that is sold
in this state in a transaction that is a retail sale or in a transaction
to which a use tax applies pursuant to Part 1 (commencing with
Section 6001) of Division 2 of the Revenue and Taxation Code.

begin insert 42968.04. end insert   

“Covered product” means a consumer product that
is used or discarded in this state and is either of the following:

(a) Home-generated sharps waste, as defined in Section 117671
of the Health and Safety Code.

(b) Household batteries, as defined in subdivision (c) of Section
42450.

begin insert 42968.06. end insert   

“Department” means the Department of Resources
Recycling and Recovery.

begin insert 42968.07. end insert   

“Geographic coverage” means the number of
convenient collection sites provided by a product stewardship
organization, free of charge, for consumers in each county of the
state where the product stewardship organization’s members or
the individual producer sell, offer for sale, or distribute a covered
product.

begin insert 42968.08. end insert   

“Performance standards” means the standards set
by the department pursuant to Section 42968.22.

begin insert 42968.10. end insert   

“Producer,” with regard to a covered product that
is sold, offered for sale, or distributed in the state, means one of
the following:

(a) A person who manufactures the covered product and who
sells, offers for sale, or distributes that covered product in the state
under that person’s own name or brand.

(b) If there is no person who sells, offers for sale, or distributes
the covered product in the state under the person’s own name or
brand, the producer of the covered product is the owner or licensee
of a trademark or brand under which the covered product is sold
or distributed in the state, whether or not the trademark is
registered.

(c) If there is no person who is a producer of the covered
product for purposes of subdivisions (a) and (b), the producer of
that covered product is the person who imports the product into
the state for sale or distribution.

begin insert 42968.12. end insert   

“Product stewardship organization” means either
of the following:

(a) An organization created by one or more producers of a
covered product to act as an agent on behalf of the producer to
design, submit, and administer a product stewardship plan
pursuant to this chapter.

(b) A producer of a covered product that complies with this
chapter as an individual producer.

begin insert 42968.14. end insert   

“Product stewardship plan” or “plan” means a
plan written by an individual producer or a product stewardship
organization that includes all of the information required by
Section 42968.32.

 

Article begin insert 2. end insert   General Provisions

 

begin insert 42968.20. end insert   

Each product stewardship organization of a covered
product in this state shall develop and implement a product
stewardship plan in accordance with the provisions of this chapter.

begin insert 42968.22. end insert   

(a) On or before January 1, 2017, the department
shall adopt regulations to implement the provisions of this chapter.
The regulations shall, at a minimum, include:

(1) Performance standards for a covered product that are to be
met by a product stewardship plan, which shall include a minimum
collection rate for a covered product and appropriate geographic
coverage for a covered product.

(2) Procedures for product stewardship plan submittal to the
department.

(3) The appointment of a stakeholder advisory committee, as
described in Article 6 (commencing with Section 42968.60).

(b) Regulations adopted pursuant to subdivision (a) shall have
no effect after the repeal of this chapter.

begin insert 42968.26. end insert   

(a) Except as provided in subdivision (b), any action
by a product stewardship organization or its members that relates
to any of the following is not a violation of the Cartwright Act
(Chapter 2 (commencing with Section 16700) of Part 2 of Division
7 of the Business and Professions Code), the Unfair Practices Act
(Chapter 4 (commencing with Section 17000) of Part 2 of Division
7 of the Business and Professions Code), or the Unfair Competition
Law (Chapter 5 (commencing with Section 17200) of Part 2 of
Division 7 of the Business and Professions Code):

(1) The creation, implementation, or management of a product
stewardship plan approved by the department pursuant to Section
42968.34.

(2) The cost and structure of an approved product stewardship
plan.

(b) Subdivision (a) does not apply to an agreement that does
any of the following:

(1) Fixes a price of or for a covered product, except for any
agreement related to a product stewardship plan approved by the
department and otherwise in accordance with this chapter.

(2) Fixes the output of production of a covered product.

(3) Restricts the geographic area in which, or customers to
whom, a covered product will be sold.

 

Article begin insert 3. end insert   Product Stewardship Plan

 

begin insert 42968.30. end insert   

On or before July 1, 2017, a product stewardship
organization shall submit a product stewardship plan to the
department that will divert the covered product from landfills and
manage the covered product in a manner that is consistent with
the state’s hierarchy for waste management practices pursuant to
Section 40051.

begin insert 42968.32. end insert   

A product stewardship plan required to be submitted
pursuant to Section 42968.30 shall include all of the following:

(a) Strategies to achieve the performance standards set by the
department pursuant to Section 42968.22.

(b) Strategies for managing and reducing the life-cycle impacts
of the covered product.

(c) A funding mechanism that provides sufficient funding to
carry out the plan, including the administrative, operational, and
capital costs of the plan, and payment of fees pursuant to Section
42968.40.

(d) A process by which the financial activities of the product
stewardship organization that are related to implementation of
the plan will be subject to an independent audit, which may be
reviewed by the department.

begin insert 42968.34. end insert   

(a) Within 30 days after the department receives a
plan submitted pursuant to Section 42968.30, the department shall
review the plan, and determine whether the plan is complete or
incomplete. If the department does not deem the plan complete,
the department shall notify the product stewardship organization
that submitted the plan of the deficiencies, and the product
stewardship organization shall revise and resubmit the plan within
30 days of receiving the notice.

(b) If the department determines that the plan is complete, the
department shall have 60 days after determining the plan is
complete to determine whether it complies with Section 42968.32,
and notify the submitter of its decision to approve or not approve
the plan.

(c) If the department does not approve the plan, it shall describe
the reasons for its disapproval in the notice. The submitter may
revise and resubmit the plan within 60 days after receiving notice
of disapproval and the department shall review and approve or
not approve the revised plan within 60 days after receipt. Any plan
not approved by January 1, 2018, shall be out of compliance with
this chapter and, commencing July 1, 2018, if the plan is not
approved as of that date, the submitter of the plan is subject to the
penalties specified in Section 42968.50 until the plan is approved
by the department.

 

Article begin insert 4. end insert   Financial Provisions

 

begin insert 42968.40. end insert   

(a) A product stewardship organization submitting
a product stewardship plan shall pay the department an annual
administrative fee. The department shall set the fee at an amount
that, when paid by every product stewardship organization that
submits a product stewardship plan, is adequate to cover the
department’s full costs of administering and enforcing this chapter,
including any program development costs or regulatory costs
incurred by the department prior to product stewardship plans
being submitted. The department may establish a variable fee
based on relevant factors, including, but not limited to, the portion
of covered products sold in the state by members of the
organization compared to the total amount of covered products
sold in the state by all organizations submitting a product
stewardship plan.

(b) The total amount of annual fees collected pursuant to this
section shall not exceed the amount necessary to recover costs
incurred by the department in connection with the administration
and enforcement of the requirements of this chapter.

(c) A product stewardship organization subject to this section
shall pay the department the administrative fee pursuant to
subdivision (a) on or before ____, and annually thereafter through
____.

(d) The department shall deposit the fees collected pursuant to
this section into the Product Stewardship Account created pursuant
to Section 42968.42.

begin insert 42968.42. end insert   

(a) The Product Stewardship Account and the
Product Stewardship Penalty Subaccount are hereby established
in the Integrated Waste Management Fund.

(b) All fees collected by the department pursuant to this article
shall be deposited in the Product Stewardship Account and may
be expended by the department, upon appropriation by the
Legislature, to cover the department’s costs to implement this
chapter.

(c) All civil penalties collected pursuant to Article 5
(commencing with Section 42968.50) shall be deposited in the
Product Stewardship Penalty Subaccount and may be expended
by the department, upon appropriation by the Legislature, to cover
the department’s costs to implement this chapter.

 

Article begin insert 5. end insert   Penalties

 

begin insert 42968.50. end insert   

(a) A civil penalty up to the following amounts may
be administratively imposed by the department or imposed by the
court on any person who is in violation of any provision of this
chapter:

(1) One thousand dollars ($1,000) per day.

(2) Ten thousand dollars ($10,000) per day if the violation is
intentional, knowing, or negligent.

(b) In assessing or reviewing the amount of a civil penalty
imposed pursuant to subdivision (a) for a violation of this chapter,
the department or the court shall consider all of the following:

(1) The nature and extent of the violation or violations.

(2) The number and severity of the violation or violations.

(3) The economic effect of the penalty on the violator.

(4) Whether the violator took good faith measures to comply
with this chapter and the period of time over which these measures
were taken.

(5) The willfulness of the violator’s misconduct.

(6) The deterrent effect that the imposition of the penalty would
have on both the violator and the regulated community.

(7) Any other factor that justice may require.

(Added by Stats. 2010, Ch. 681, Sec. 2. (AB 2398) Effective
January 1, 2011.)

begin insert 42968.52. end insert   

Moneys collected pursuant to this article shall be
deposited in the Product Stewardship Penalty Subaccount,
established pursuant to Section 42968.42.

 

Article begin insert 6. end insert   Stakeholder Advisory Committee

 

begin insert 42968.60. end insert   

(a) On or before March 1, 2017, the department
shall appoint a stakeholder advisory committee for each covered
product to provide technical feedback to a product stewardship
organization. The stakeholder advisory committee shall report
annually to the department on the progress of the product
stewardship organizations’ implementation of this chapter.

(b) Members of the advisory committee for a covered product
shall include members of the environmental community, solid waste
industry, local governments, retailers, and other key stakeholders
for that covered product.

(c) The stakeholder advisory committee for a covered product
shall be independent of the product stewardship organizations for
that covered product. The advisory committee’s expenses shall be
covered by its members and not the product stewardship
organizations for that covered product or the state.

(d) A product stewardship organization for a covered product
shall have no control over the advisory committee for that covered
product or its activities.

 

Article begin insert 7. end insert   Reporting

 

begin insert 42968.70. end insert   

Beginning on or before the first January 1 more
than one year after a product stewardship plan is approved, and
on or before every January 1 thereafter, each product stewardship
organization implementing a product stewardship plan shall
prepare and submit to the department an annual report describing
the activities carried out pursuant to the product stewardship plan
during the previous reporting period, including, but not limited
to, whether the product stewardship organization, in implementing
the plan, attained the performance standards for the covered
product, and if the performance standards were not met, what
actions the product stewardship organization will take during the
next reporting period to attain those performance standards.

begin insert 42968.72. end insert   

On or before July 1, 2023, the department shall
report all of the following, for each covered product, to the
appropriate committees of the Legislature:

(a) The department’s evaluation of each product stewardship
organization.

(b) Each product stewardship organization’s evaluation of the
department and the advisory committee.

(c) Stakeholder advisory committee reports submitted to the
department pursuant to Section 42968.60.

(d) Audited financials of each product stewardship organization.

(e) The amount of money saved by state and local governments
as a result of implementing a product stewardship plan.

(f) Whether the performance standards set by the department
were met.

begin insert 42968.74. end insert   

The department may impose reporting requirements
on product stewardship organizations and the stakeholder advisory
committee of a covered product to ensure that the department is
able to meet its reporting requirements to the Legislature pursuant
to Section 42968.72.

 

Article begin insert 8. end insert   Repeal

 

begin insert 42968.80. end insert   

This chapter shall remain in effect only until January
1, 2024, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2024, deletes or extends
that date.

end insert

begin delete

SECTION 1.  

Section 42872.3 is added to the Public Resources
Code, to read:

42872.3.  

In accordance with the tire recycling program
established pursuant to this article, the department shall establish
a waste tire recycling incentive program designed to achieve, by
January 1, 2018, a 75 percent recycling rate for waste tires
generated in California.

end delete