Amended in Assembly April 21, 2015

Amended in Assembly April 6, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 1159


Introduced by Assembly Members Gordon and Williams

begin insert

(Coauthor: Assembly Member Mark Stone)

end insert

February 27, 2015


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.

LEGISLATIVE COUNSEL’S DIGEST

AB 1159, as amended, Gordon. Product stewardship: pilot program: household batteries and home-generated sharps waste.

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.

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.

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.

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.

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.

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.

A producer or product stewardship organization submitting a product stewardship plan would be required to pay thebegin delete department, on an unspecified schedule,end deletebegin insert departmentend insert 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.

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.

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.

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.

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

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

P4    1

SECTION 1.  

Chapter 19.5 (commencing with Section 42968)
2is added to Part 3 of Division 30 of the Public Resources Code, to
3read:

4 

5Chapter  19.5. Product Stewardship Pilot Program
6

6 

7Article 1.  Definitions
8

 

9

42968.  

“Collection rate” means the percentage of covered
10products, by weight, that are collected during a calendar year by
11a product stewardship organization as compared to the average
12annual weight of all covered products that were estimated to have
13been sold in the state during the previous three years by that
14product stewardship organization’s members or the individual
15producer. The collection rate of a product stewardship organization
16of covered products may be based on a reasonable pro rata
17calculation of national sales.

18

42968.01.  

“Consumer” means a purchaser, owner, or lessee of
19a product, including a person, business, corporation, limited
20partnership, nonprofit organization, or governmental entity.

21

42968.02.  

“Consumer product” means a product that is sold
22in this state in a transaction that is a retail sale or in a transaction
23to which a use tax applies pursuant to Part 1 (commencing with
24Section 6001) of Division 2 of the Revenue and Taxation Code.

25

42968.04.  

“Covered product” means a consumer product that
26is used or discarded in this state and is either of the following:

27(a) Home-generated sharps waste, as defined in Section 117671
28of the Health and Safety Code.

29(b) Household batteries, as defined in subdivision (c) of Section
3042450.

31

42968.06.  

“Department” means the Department of Resources
32Recycling and Recovery.

P5    1

42968.07.  

“Geographic coverage” means the number of
2convenient collection sites provided by a product stewardship
3organization, free of charge, for consumers in each county of the
4state where the product stewardship organization’s members or
5the individual producer sell, offer for sale, or distribute a covered
6product.

7

42968.08.  

“Performance standards” means the standards set
8by the department pursuant to Section 42968.22.

9

42968.10.  

“Producer,” with regard to a covered product that
10is sold, offered for sale, or distributed in the state, means one of
11the following:

12(a) A person who manufactures the covered product and who
13sells, offers for sale, or distributes that covered product in the state
14under that person’s own name or brand.

15(b) If there is no person who sells, offers for sale, or distributes
16the covered product in the state under the person’s own name or
17brand, the producer of the covered product is the owner or licensee
18of a trademark or brand under which the covered product is sold
19or distributed in the state, whether or not the trademark is
20registered.

21(c) If there is no person who is a producer of the covered product
22for purposes of subdivisions (a) and (b), the producer of that
23covered product is the person who imports the product into the
24state for sale or distribution.

25

42968.12.  

“Product stewardship organization” means either of
26the following:

27(a) An organization created by one or more producers of a
28covered product to act as an agent on behalf of the producer to
29design, submit, and administer a product stewardship plan pursuant
30to this chapter.

31(b) A producer of a coveredbegin delete product that complies with this
32chapter as an individual producer.end delete
begin insert product.end insert

33

42968.14.  

“Product stewardship plan” or “plan” means a plan
34written by an individual producer or a product stewardship
35organization that includes all of the information required by Section
3642968.32.

 

P6    1Article 2.  General Provisions
2

 

3

42968.20.  

Each product stewardship organization of a covered
4product in this state shall develop and implement a product
5stewardship plan in accordance with the provisions of this chapter.

6

42968.22.  

(a) On or before January 1, 2017, the department
7shall adopt regulations to implement the provisions of this chapter.
8The regulations shall, at a minimum, include:

9(1) Performance standards for a covered product that are to be
10met by a product stewardship plan, which shall include a minimum
11collection rate for a covered product and appropriate geographic
12coverage for a covered product.

13(2) Procedures for product stewardship plan submittal to the
14department.

15(3) The appointment of a stakeholder advisory committee, as
16described in Article 6 (commencing with Section 42968.60).

17(b) Regulations adopted pursuant to subdivision (a) shall have
18no effect after the repeal of this chapter.

19

42968.26.  

(a) Except as provided in subdivision (b), any action
20by a product stewardship organization or its members that relates
21to any of the following is not a violation of the Cartwright Act
22(Chapter 2 (commencing with Section 16700) of Part 2 of Division
237 of the Business and Professions Code), the Unfair Practices Act
24(Chapter 4 (commencing with Section 17000) of Part 2 of Division
257 of the Business and Professions Code), or the Unfair Competition
26Law (Chapter 5 (commencing with Section 17200) of Part 2 of
27Division 7 of the Business and Professions Code):

28(1) The creation, implementation, or management of a product
29stewardship plan approved by the department pursuant to Section
3042968.34.

31(2) The cost and structure of an approved product stewardship
32plan.

33(b) Subdivision (a) does not apply to an agreement that does
34any of the following:

35(1) Fixes a price of or for a covered product, except for any
36agreement related to a product stewardship plan approved by the
37department and otherwise in accordance with this chapter.

38(2) Fixes the output of production of a covered product.

39(3) Restricts the geographic area in which, or customers to
40whom, a covered product will be sold.

 

P6    1Article 3.  Product Stewardship Plan
2

 

3

42968.30.  

On or before July 1, 2017, a product stewardship
4organization shall submit a product stewardship plan to the
5department that will divert the covered product from landfills and
6manage the covered product in a manner that is consistent with
7the state’s hierarchy for waste management practices pursuant to
8Section 40051.

9

42968.32.  

A product stewardship plan required to be submitted
10pursuant to Section 42968.30 shall include all of the following:

11(a) Strategies to achieve the performance standards set by the
12department pursuant to Section 42968.22.

13(b) Strategies for managing and reducing the life-cycle impacts
14of the covered product.

15(c) A funding mechanism that provides sufficient funding to
16carry out the plan, including the administrative, operational, and
17capital costs of the plan, and payment of fees pursuant to Section
1842968.40.

19(d) A process by which the financial activities of the product
20stewardship organization that are related to implementation of the
21plan will be subject to an independent audit, which may be
22reviewed by the department.

23

42968.34.  

(a) Within 30 days after the department receives a
24plan submitted pursuant to Section 42968.30, the department shall
25review the plan, and determine whether the plan is complete or
26incomplete. If the department does not deem the plan complete,
27the department shall notify the product stewardship organization
28that submitted the plan of the deficiencies, and the product
29stewardship organization shall revise and resubmit the plan within
3030 days of receiving the notice.

31(b) If the department determines that the plan is complete, the
32department shall have 60 days after determining the plan is
33complete to determine whether it complies with Sectionbegin delete 42968.32,end delete
34begin insert 42968.32 and any regulations adopted by the department pursuant
35to this chapter,end insert
and notify the submitter of its decision to approve
36or not approve the plan.

37(c) If the department does not approve the plan, it shall describe
38the reasons for its disapproval in the notice. The submitter may
39revise and resubmit the plan within 60 days after receiving notice
40of disapproval and the department shall review and approve or not
P8    1approve the revised plan within 60 days after receipt. Any plan
2not approved by January 1, 2018, shall be out of compliance with
3this chapter and, commencing July 1, 2018, if the plan is not
4approved as of that date, the submitter of the plan is subject to the
5penalties specified in Section 42968.50 until the plan is approved
6by the department.

7 

8Article 4.  Financial Provisions
9

 

10

42968.40.  

(a) A product stewardship organization submitting
11a product stewardship plan shall pay the department an annual
12administrative fee. The department shall set the fee at an amount
13that, when paid by every product stewardship organization that
14submits a product stewardship plan, is adequate to cover the
15department’s full costs of administering and enforcing this chapter,
16including any program development costs or regulatory costs
17incurred by the department prior to product stewardship plans
18being submitted. The department may establish a variable fee based
19on relevant factors, including, but not limited to, the portion of
20covered products sold in the state by members of the organization
21compared to the total amount of covered products sold in the state
22by all organizations submitting a product stewardship plan.

23(b) The total amount of annual fees collected pursuant to this
24section shall not exceed the amount necessary to recover costs
25incurred by the department in connection with the administration
26and enforcement of the requirements of this chapter.

begin delete

27(c) A product stewardship organization subject to this section
28shall pay the department the administrative fee pursuant to
29subdivision (a) on or before ____, and annually thereafter through
30____.

end delete
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31(d)

end delete

32begin insert(c)end insert The department shall deposit the fees collected pursuant to
33this section into the Product Stewardship Account created pursuant
34to Section 42968.42.

35

42968.42.  

(a) The Product Stewardship Account and the
36Product Stewardship Penalty Subaccount are hereby established
37in the Integrated Waste Management Fund.

38(b) All fees collected by the department pursuant to this article
39shall be deposited in the Product Stewardship Account and may
40be expended by the department, upon appropriation by the
P9    1Legislature, to cover the department’s costs to implement this
2chapter.

3(c) All civil penalties collected pursuant to Article 5
4(commencing with Section 42968.50) shall be deposited in the
5Product Stewardship Penalty Subaccount and may be expended
6by the department, upon appropriation by the Legislature, to cover
7the department’s costs to implement this chapter.

8 

9Article 5.  Penalties
10

 

11

42968.50.  

(a) A civil penalty up to the following amounts may
12be administratively imposed by the department or imposed by the
13court on any person who is in violation of any provision of this
14chapter:

15(1) One thousand dollars ($1,000) per day.

16(2) Ten thousand dollars ($10,000) per day if the violation is
17intentional, knowing, or negligent.

18(b) In assessing or reviewing the amount of a civil penalty
19imposed pursuant to subdivision (a) for a violation of this chapter,
20the department or the court shall consider all of the following:

21(1) The nature and extent of the violation or violations.

22(2) The number and severity of the violation or violations.

23(3) The economic effect of the penalty on the violator.

24(4) Whether the violator took good faith measures to comply
25with this chapter and the period of time over which these measures
26were taken.

27(5) The willfulness of the violator’s misconduct.

28(6) The deterrent effect that the imposition of the penalty would
29have on both the violator and the regulated community.

30(7) Any other factor that justice may require.

begin delete

31(Added by Stats. 2010, Ch. 681, Sec. 2. (AB 2398) Effective
32January 1, 2011.)

end delete
33

42968.52.  

Moneys collected pursuant to this article shall be
34deposited in the Product Stewardship Penalty Subaccount,
35established pursuant to Section 42968.42.

36 

37Article 6.  Stakeholder Advisory Committee
38

 

39

42968.60.  

(a) On or before March 1, 2017, the department
40shall appoint a stakeholder advisory committee for each covered
P10   1product to provide technical feedback to a product stewardship
2organization. The stakeholder advisory committee shall report
3annually to the department on the progress of the product
4stewardship organizations’ implementation of this chapter.

5(b) Members of the advisory committee for a covered product
6shall include members of the environmental community, solid
7waste industry, local governments, retailers, and other key
8stakeholders for that covered product.

9(c) The stakeholder advisory committee for a covered product
10shall be independent of the product stewardship organizations for
11that covered product. The advisory committee’s expenses shall be
12covered by its members and not the product stewardship
13organizations for that covered product or the state.

14(d) A product stewardship organization for a covered product
15shall have no control over the advisory committee for that covered
16product or its activities.

17 

18Article 7.  Reporting
19

 

20

42968.70.  

Beginning on or before the first January 1 more than
21one year after a product stewardship plan is approved, and on or
22before every January 1 thereafter, each product stewardship
23organization implementing a product stewardship plan shall prepare
24and submit to the department an annual report describing the
25activities carried out pursuant to the product stewardship plan
26during the previous reporting period, including, but not limited to,
27whether the product stewardship organization, in implementing
28the plan, attained the performance standards for the covered
29product,begin delete andend deletebegin insert and,end insert if the performance standards were not met, what
30actions the product stewardship organization will take during the
31next reporting period to attain those performance standards.

32

42968.72.  

On or before July 1, 2023, the department shall
33report all of the following, for each covered product, to the
34appropriate committees of the Legislature:

35(a) The department’s evaluation of each product stewardship
36organization.

37(b) Each product stewardship organization’s evaluation of the
38department and the advisory committee.

39(c) Stakeholder advisory committee reports submitted to the
40department pursuant to Section 42968.60.

P11   1(d) Audited financials of each product stewardship organization.

2(e) The amount of money saved by state and local governments
3as a result of implementing a product stewardship plan.

4(f) Whether the performance standards set by the department
5were met.

6

42968.74.  

The department may impose reporting requirements
7on product stewardship organizations and the stakeholder advisory
8committee of a covered product to ensure that the department is
9able to meet its reporting requirements to the Legislature pursuant
10to Section 42968.72.

11 

12Article 8.  Repeal
13

 

14

42968.80.  

This chapter shall remain in effect only until January
151, 2024, and as of that date is repealed, unless a later enacted
16statute, that is enacted before January 1, 2024, deletes or extends
17that date.



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