BILL ANALYSIS Ó
AB 2153
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ASSEMBLY THIRD READING
AB
2153 (Cristina Garcia)
As Amended April 14, 2016
2/3 vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Environmental |4-1 |Alejo, Lopez, |Beth Gaines |
|Safety | |McCarty, Ting | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |14-6 |Gonzalez, Bloom, |Bigelow, Chang, |
| | |Bonilla, Bonta, |Gallagher, Jones, |
| | |Calderon, Daly, |Obernolte, Wagner |
| | |Eggman, Eduardo | |
| | |Garcia, Roger | |
| | |Hernández, Holden, | |
| | |Quirk, Santiago, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Establishes mandatory requirements for the collection
and recycling of lead-acid batteries. Specifically, this bill:
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1)Establishes the Lead-Acid Battery Recovery and Recycling Act.
2)Requires, on or before July 1, 2017, a qualified industry
association to establish a lead-acid battery organization
(LABO) to develop, implement and administer the lead-acid
battery recycling program.
3)Requires the director of the California Department of
Resources Recycling and Recovery (CalRecycle), to appoint an
advisory committee to advise the LABO. Requires the advisory
committee to be comprised of specified representatives.
Requires the LABO to consult with the advisory committee at
least once during the development of the plan, and annually
prior to submitting an annual report and budget.
4)Requires, on or before January 1, 2018, each manufacturer,
retailer, and recycler to register with the LABO.
5)Requires, on or before July 1, 2018, the LABO to develop and
submit to CalRecycle a plan with specified elements for
recycling lead-acid batteries.
6)Authorizes the LABO to include market development
opportunities that would provide incentives to universities
and research companies to find alternatives to lead in
batteries.
7)Requires CalRecycle to review the plan for compliance and
specifies time frames for taking action on approval.
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8)Requires, on or before January 1, 2021, CalRecycle, in
consultation with the LABO, to establish and make public the
state baseline amount of, and goals for, recycling of
lead-acid batteries with California recycling stickers.
9)Requires, on or before July 1, 2018, and annually thereafter,
the LABO to prepare and submit to CalRecycle a proposed budget
with specified information. Specifies timeframes for
CalRecycle to review and approve the budget.
10)Requires the LABO to reimburse CalRecycle for incurred
administrative costs. Establishes the Used Lead-Acid Battery
Recycling Fund and requires all administrative revenues to be
deposited into that fund.
11)Requires the LABO to set the amount of a recycling charge to
be added to the purchase price of a lead-acid battery at the
point of sale. Requires the charge to be based on the value
of lead, prohibits the charge from exceeding $20 and from
being less than $15; and, requires it to be a flat rate.
Specifies terms and conditions for adjusting the amount of the
charge. Requires a charge to be assessed on all lead-acid
batteries once CalRecycle approves the plan. Requires the
charge to be clearly delineated on a customer's receipt of
purchase.
12)Requires, on a quarterly basis, a manufacturer, recycler,
retailer, or distributor to submit all moneys collected from
the charge, minus the amount refunded to consumers for the
return of lead-acid batteries with California recycling
stickers, to the LABO.
13)Requires the LABO to remit to the state $1 from the sale of
each lead-acid battery with a California recycling sticker.
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Requires remittance of $2 under specified conditions.
14)Establishes the Lead-Acid Battery Cleanup Fund for the
deposit of the $1 from each sale of a lead-acid battery.
Prohibits the balance of the fund from exceeding $100 million.
15)Requires continuous appropriation of the Lead-Acid Battery
Cleanup Fund to the Department of Toxic Substances Control
(DTSC) for the cleanup of areas of the state that have been
contaminated by the production, recycling, or improper
disposal of lead-acid batteries and activities.
16)Authorizes the lead-acid recycling organization to hire
independent third-party auditors to audit entities responsible
for remitting the specified revenues. Specifies audit
requirements. Specifies administrative record keeping
requirements for lead-acid recycling organizations.
17)Requires, on or before July 1, 2020, and annually thereafter,
a lead-acid recycling organization to submit a report with
specified information relevant to the implementation of the
plan, including quantification of lead-acid batteries bought,
collected and recycled; compliance and demonstrations of good
faith efforts; among other required information. Specifies
timeframes for CalRecycle to review and approve the report.
18)Requires, on or before July 1, 2020, and annually thereafter,
a person that is engaged in business as a recycler to submit a
report to CalRecycle that includes the number of lead-acid
batteries with California recycling stickers and other
information germane to proving compliance.
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19)Requires, on or before July 1, 2020, and annually thereafter,
the operator of a solid waste landfill facility to report to
CalRecycle, if requested, on the number of used lead-acid
batteries with California recycling stickers received by that
facility that were recycled or disposed of in the preceding
calendar year.
20)Requires, when the charge on lead-acid batteries becomes
operative, the manufacturer, recycler, retailer or distributor
to affix a California recycling sticker to each lead-acid
battery at the point of sale.
21)Requires a consumer who returns a lead-acid battery with a
California recycling sticker to a manufacturer, retailer, or
other entity that sells lead-acid batteries to be given a
refund of the recycling charge minus $3. States that $1 of
the $3 shall be remitted to the Lead-Acid Battery Cleanup Fund
and the remaining $2 shall be used by the LABO for
administration and implementation of the program. A consumer
returning a lead-acid battery without a sticker is not
eligible for the refund. Requires a retailer that sells a
used lead-acid battery to a manufacturer to remit 75% of the
sale price of the used lead-acid battery to the LABO for
deposit into the Lead-Acid Battery Cleanup Fund.
22)Requires, on or before March 1, 2018, and annually
thereafter, CalRecycle to post on its Internet Website a list
of manufacturers and recyclers that are in compliance with
this chapter.
23)Authorizes CalRecycle to impose an administrative civil
penalty on any manufacturer, LABO, recycler, or retailer that
is in violation. The penalty shall not exceed $1,000 per day,
but if the violation is intentional, knowing, or reckless, the
penalty may go up to $10,000 per day. Specifies additional
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administrative actions CalRecycle may take on noncompliant
entities.
24)Establishes the Lead-Acid Battery Recovery and Recycling
Penalty Account and requires all administrative civil
penalties collected to be deposited into that account.
25)Authorizes CalRecycle to adopt emergency regulations to
implement the provisions of this bill.
26)States that any action by a lead-acid battery organization or
its members as it relates to the requirements of this bill is
not a violation of the Cartwright Act, the Unfair Practices
Act, or the Unfair Competition Law.
27)Authorizes the Lead-Acid Battery Cleanup Fund to repay any
loan made by the General Fund to the Toxic Substances Control
Account during the 2016-17 fiscal year for the cleanup of lead
contamination in the state.
28)Establishes this as an urgency act in order to increase the
cleanup of toxic materials and prevent additional toxic
pollution at the earliest possible time.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, this bill would result in:
1)Unknown, continuously appropriated costs for DTSC lead
clean-up activities clean-resulting from the battery charge;
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2)Increased initial costs for CalRecyle of between $650,000 and
$750,000 and 6-7 Personnel Year (PY) to develop regulations,
enforcement procedures, establish the fund and certify the
advisory committee; and,
3)After the program is established, ongoing annual CalRecycle
implementation and enforcement costs of approximately $1
million and 9-10 PY. Funding requires an initial loan from the
Integrated Waste Management Account but ongoing funding is
provided from the Fund.
COMMENTS: The problem with lead: Lead has been listed under
California's Proposition 65 since 1987 as a substance that can
cause reproductive damage and birth defects and has been on the
list of chemicals known to cause cancer since 1992. According
to the Office of Environmental Health Hazard Assessment, lead
has multiple toxic effects on the human body. Lead-acid
batteries: According to the U.S. Geological Survey, the
lead-acid battery industry accounted for about 90% of reported
U.S. lead consumption during 2015.
According to the California Board of Equalization's estimates,
based on 2012 Census data, lead-acid car battery sales in
California are approximately $1.6 billion. That is based on an
estimate of roughly 16 million batteries sold at an average cost
of $100.
Exide Technologies: The Exide Technologies (Exide) battery
recycling facility in Vernon, California recycled lead from used
automotive batteries and other sources. The facility could
process about 25,000 automotive and industrial batteries a day,
providing a source of lead for new batteries. Over the course
of decades of operation, the facility polluted the soil beneath
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it with high levels of lead, arsenic, cadmium and other toxic
metals. It also has contaminated groundwater, released battery
acid onto roads and contaminated homes and yards in surrounding
communities with lead emissions. In March, 2015, Exide was
forced to close the facility for good and, under a state
agreement with DTSC, set aside $7.7 million to test homes and
other structures around the facility for pollution resulting
from the facility.
DTSC estimates homes between 1.3 and 1.7 miles away from the
facility may potentially be affected by Exide's lead
contamination - that equates to somewhere between 5,000 - 10,000
residential properties. Cleaning each home costs about $45,000,
according to DTSC. If the cleanup grows to thousands of
properties, it could cost hundreds of millions of dollars.
Removing lead-contaminated soil from thousands of homes
surrounding Exide could result in the most extensive cleanup of
its kind in California and will be among the largest cleanup
ever conducted in the nation. At the end of the day, the cost
of cleanup in and around the Exide facility is expected to top
$500 million dollars.
In On April 20, 2016, the Governor signed AB 118 (Santiago),
Chapter 10, Statutes of 2016 and SB 93 (De Léon), Chapter 9,
Statutes of 2016, appropriating a $176.6 million loan from the
Toxic Substances Control Account to enable DTSC to test the
remaining properties, schools, daycare centers, and parks in the
1.7 mile radius and remove contaminated soil at the properties
that have the highest lead levels and greatest potential
exposure to residents.
Cleanup costs initially incurred by the State will ultimately be
sought from the parties responsible for the lead contamination.
DTSC is looking for funds to pay for the work while it seeks
additional money from Exide and other responsible parties.
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After the $176.6 million is expended, DTSC will need additional
funds to do complete and thorough cleanup. This bill is
intended to fill that gap while providing an ongoing source of
funds to address future lead contamination from lead-acid
batteries.
Use of proposed battery charge revenues: This bill would
require a fee to be added to the purchase price of a replacement
lead-acid battery at the point of sale, and would authorize the
revenues to be continuously appropriation to DTSC for the
cleanup of areas of the state that have been contaminated by the
production, recycling, or improper disposal of lead-acid
batteries and activities. In addition, this bill would
authorize funds in the Lead-Acid Battery Cleanup Fund to be used
towards repaying the General Fund loan.
Under current law, DTSC is authorized to incur direct cleanup
costs and oversight costs in remediating contaminated
properties, and then bill responsible parties for those costs.
As it relates to the lead-contaminated communities surrounding
the Exide facility, the state will pay for and conduct much of
the cleanup, and then bill Exide and any other identified
responsible party (RP) for the cleanup costs for reimbursable
costs. Those bills, once paid by the RP(s), will, in effect, be
a repayment on the General Fund loan.
Core battery charges: According to a 2007 contracted report to
the California Integrated Waste Management Board (CIWMB, which
is now CalRecycle), Framework for Evaluating End-of-Life Product
Management Systems in California, the need to have disposal
options for lead-acid batteries lead to an industry response by
BCI to promote model legislation for states to enact. That
resulted in a model that included a landfill ban, a mandatory
retailer-take back system, and mandatory collection of deposit
on the purchase of a new battery if an old battery is not
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returned. California adopted a modified version of the model
legislation in 1989 with only two of those components:
1)Prohibit the disposal of a lead-acid battery at a solid waste
facility, or on or in any land, surface waters, watercourses,
or marine waters (H&S § 25215.2); and,
2)Require that retailers accept the trade-in of a spent
lead-acid battery by a consumer upon purchase of a new one.
(H&S § 25215.3)
California's laws, therefore, do not identify that a deposit
should be added to the sale of batteries. Despite the lack of a
deposit requirement, most retailers voluntarily charge a deposit
as an incentive to get the batteries returned, and the deposit
charge varies (usually between $15-$18). If a used battery is
returned to the retailer at the time of purchase of a new
battery, the deposit is usually waived. The deposit is
considered a "core" charge, or deposit.
Since it is illegal to dispose of lead-acid batteries in
California landfills, and all retailers that sell lead-acid
batteries must accept their return for disposal, the core charge
gives retailers a tool to comply with those laws by
incentivizing consumers to return their batteries. However, a
statutorily mandated deposit could substantially increase
lead-acid battery collection rates, which in turn will require
management of that waste.
Are consumers getting the short end of the stick under the
voluntary core charge? When it comes to consumer outreach, it
is industry practice to disclose the core charge so customers
know what they are paying; this is usually done by listing the
deposit as a line-item on a receipt. It's also business
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practice, per the BCI model, to include signage alerting
consumers about the take-back of the used batteries, but
California chose not to adopt that latter standard when it
enacted H&S § 25215. Therefore, consumers are paying the
deposit in California at many retail locations, but many may not
be aware they can return their used car batteries back to those
retailers.
In addition, lead-acid batteries have an average life-span of
five years. According to the author's office, the issue with
the current practice is that retailers typically do not accept
spent lead-acid batteries for disposal without a receipt. Most
consumers do not keep receipts for five years, which means those
retailers are then keeping the entirety of the deposit and
charging the deposit again when the consumer has to purchase a
new battery. Since there is no law establishing the deposit,
retailers profit off each additional lead-acid battery when the
manufacturer drops off new batteries and picks up their primary
source of lead, the old lead-acid batteries collected by the
retailers.
This bill would allow a consumer returning a spent lead-acid
battery to receive the deposit as long as it's a covered
lead-acid battery with an appropriate California recycling
sticker, which would make it more conducive to refunding the
deposit.
Analysis Prepared by:
Paige Brokaw / E.S. & T.M. / (916) 319-3965 FN:
0003201
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