BILL ANALYSIS Ó
AB 2153
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Date of Hearing: June 2, 2016
ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS
Luis Alejo, Chair
AB 2153
(Cristina Garcia) - As Amended June 1, 2016
SUBJECT: The Lead-Acid Battery Recycling Act of 2016
SUMMARY: Establishes new fees on lead-acid batteries to fund
lead contamination cleanup. Specifically, this bill:
1)Repeals and amends Article 10.5 of Chapter 6.5 of the Health &
Safety Code regarding the management of lead-acid batteries.
2)Requires a replacement lead-acid battery dealer to accept from
a consumer a used lead-acid battery without regard to the
brand or original dealer of the used battery for recycling.
Cap the number of batteries that can be returned by a consumer
at six lead-acid batteries per day.
3)Authorizes consumers to be refunded the deposit if the
lead-acid battery is returned within 45 days after purchase.
4)Requires a lead-acid battery dealer to conspicuously post a
written notice stating that the dealer is required by law to
accept used lead-acid batteries and charge a fee on all
replacement lead-acid battery sold.
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5)Requires a lead-acid battery dealer to charge a refundable
deposit (unspecified dollar amount) plus a non-refundable $1
California Battery Fee on each lead-acid battery sold to a
person buying a replacement lead-acid battery.
6)Requires all replacement lead-acid batteries to have a widely
understood recycling symbol.
7)Requires a lead-acid battery dealer to collect the California
Battery Fee at the time of sale and authorize the dealer to
retain 1.5-percent of the fee as reimbursement for any costs
associated with the collection of the fee. Require the
remainder of the fee be remitted to the State Board of
Equalization (BOE).
8)Requires each manufacturer to remit to the BOE a $1
Manufacturer Battery Fee for each lead-acid battery sold at
retail to a person in California.
9)Requires all California Battery Fee and Manufacturer Battery
Fee revenues to be deposited into the Lead-Acid Battery
Cleanup Fund.
10)Requires DTSC and BOE to be reimbursed for the costs of
collection, auditing, and administration of funds. Cap
administrative costs at 3-percent.
11)Authorizes a wholesaler of lead-acid batteries to assume
responsibility of paying the Manufacturer Battery Fee at the
behest of the manufacturer. Require the wholesaler to notify
BOE, DTSC, and the manufacturer of its intention to pay the
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Manufacturer Battery Fee.
12)Authorizes any manufacturer exempted from its obligations to
pay the Manufacturer Battery Fee to voluntarily submit an
additional $1 Manufacturer Battery Fee per lead-acid battery.
Prohibit the manufacturer from passing along the costs to the
wholesaler or consumers.
13)Continuously appropriates all funds in the Lead-Acid Battery
Cleanup Fund to DTSC to fund the following activities:
investigation, site evaluation, cleanup, abatement, remedy,
removal, monitoring, or other response actions at any site in
California investigated because of concerns about lead
releases from a lead-acid battery recycling facility (from
hereto referred to as eligible lead-related activities), and
repayment of General Fund loans for lead contamination
cleanup.
14)Requires any funds spent by DTSC for any eligible
lead-related activities to be drawn from the Lead-Acid Battery
Cleanup Fund before drawing from any other fund source.
15)Requires DTSC, prior to seeking to recover any moneys spent
on eligible lead-related activities from any person who has
remitted any amount of Manufacturer Battery Fees, other than
persons who are or were the owners or operators, or legal
successors to owners or operators, of a site at which such
activity occurred, to draw from and deplete the funds in the
Lead-Acid Battery Cleanup Fund, and exhaust efforts to recover
any funds expended for any eligible lead-related activity from
the owners or operators, or legal successors to owners or
operators, of the site at which such activity occurred.
16)Requires the balance of a judgment against any manufacturer
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who has remitted any amount of Manufacturer Battery Fees to be
reduced by the amount the manufacturer has remitted to the
state.
17)States that nothing in this bill shall be construed to limit
or otherwise affect any cause of action that may exist under
any law that the state may bring against the owners or
operators, or legal successors to owners or operators, of a
site at which any described eligible lead-related activity.
18)Requires any funds spent from the Lead-Acid Battery Cleanup
Fund that are subsequently recovered from any person to be
deposited into the Lead-Acid Battery Cleanup Fund.
19)Prohibits funds from the Lead-Acid Battery Cleanup Fund from
funding Green Chemistry as it relates to lead-acid batteries.
20)Precludes lead-acid batteries from consideration for
inclusion on a list of Priority Products under DTSC's Safer
Consumer Products Program as long as the national recycling
rate for lead in batteries determined by the methodology
accepted by the US Environmental Protection Agency (US EPA)
employed in the Battery Council International's National
Recycling Rate Study exceeds a to be determined percentage.
21)States that this shall not preclude a study of the impacts
and benefits of manufacture and recycling of lead-acid
batteries pursuant to the Governor's May Revise proposal.
22)Requires DTSC to report annually to the Governor and to the
Legislature on the status of the Lead-Acid Battery Cleanup
Fund and on DTSC's progress on implementation.
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23)Requires any manufacturer who has remitted any amount of fees
and who is held responsible by any authority under the
California Hazardous Substances Account Act or any other law
for the payment or reimbursement of any moneys to the state or
a regional board for an eligible lead-related activity to have
its responsibility for such payment or reimbursement reduced
by the amounts that manufacturer remitted.
24)Authorizes the state to bring an action against a
manufacturer who has remitted any amount of fees for the
payment or reimbursement of any moneys to the State or a
regional board for any of the eligible lead-related activities
if the state has a reasonable basis to believe that the
manufacturer ultimately would be held responsible for amounts
in excess of the amount the manufacturer has remitted.
25)Requires the state to notify the manufacturer of the state's
intent to bring an action and meet and confer with the
manufacturer to reach an agreement by which the manufacture
voluntarily resolves the state's claim.
26)States that nothing shall be construed to create a private
cause of action against a manufacturer, affect any cause of
action that may exist under other law or reduce the amount of
damages for which the manufacturer is held liable in any civil
action for personal injury or wrongful death.
27)States that nothing shall be construed to limit or otherwise
affect a claim the state may assert against the owners or
operators, or legal successors to owners or operators, of a
site at which any eligible lead-related activity.
28)Prohibits any administrative order or judicial relief from
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being sought to compel any person who has remitted fees to
take any eligible lead-related activity at a site unless the
Lead-Acid Battery Cleanup Fund has been exhausted by the
state.
29)Authorizes DTSC to impose civil administrative penalties not
to exceed $1,000 per day on any person who is in violation.
Requires all penalties to be deposited into the Lead-Acid
Battery Cleanup Fund.
30)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.
31)Establishes the effective date as January 1, 2017.
EXISTING LAW:
1)Prohibits the disposal of a lead-acid battery at a solid waste
facility, or on or in any land, surface waters, watercourses,
or marine waters. (Health and Safety Code (H&S) § 25215.2)
2)Requires retailers to accept the trade-in of a spent lead-acid
battery by a consumer upon purchase of a new one. (H&S §
25215.3)
3)Governs the management of used lead-acid batteries.
(California Code of Regulations, Title 22, § 66266.80 and
66266.81)
4)Requires all lead-acid batteries purchased by any state agency
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for, and, at the next required installation of a battery in,
an automobile or light truck owned or operated by the state
agency, to be a recycled lead-acid battery, to the extent that
all existing stock of nonrecycled batteries have been
utilized. (Public Resources Code (PRC) § 42442)
FISCAL EFFECT: Unknown. The Assembly Appropriations Committee
analyzed a previous version of the bill, which may render that
estimated fiscal impact irrelevant to the current version of the
bill.
COMMENTS:
Need for the bill: According to the author, "AB 2153 will create
a state mandated Lead-Acid (Car) Battery fee that will serve as
a funding mechanism for clean-up of areas contaminated by
lead-acid batteries. Consumers will be charged a $1 fee per car
battery at point of sale. Manufacturers will pay a $1 fee on all
batteries sold in the state. The money from the fee can go to
re-pay the Governor's 176.6 million dollar loan, and will be
used to clean up areas of the state that have been contaminated
by the production and recycling of lead acid batteries."
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.
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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.
Under current law, any dealer of lead-acid batteries is required
to accept a lead-acid battery from a consumer, regardless of
type and size of the battery. AB 2153, as amended, narrows the
requirement for retailers to take back virtually any lead acid
battery and authorizes retailers to reject a lead-acid battery
if it is not the same "type and size" that is sold by that
retailer.
The author may wish to consider restoring current law, which
affords more flexibility to consumers to return their spent
lead-acid batteries for recycling.
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
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
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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.
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.
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. A non-refundable $1
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Consumer Battery Fee would be paid by the consumer and $1
Manufacturer Battery Fee would be paid per lead-acid battery
manufacturer. An additional $1 per battery could be collected if
a wholesaler pays the Manufacturer Battery Fee on the
manufacturer's behest and the manufacturer voluntarily pays an
additional $1 fee.
The bill would authorize those fee revenues to be continuously
appropriated to DTSC for the investigation, site evaluation,
cleanup, abatement, remedy, removal, monitoring, or other
response actions at any site in California investigated because
of concerns about lead releases from a lead acid battery
recycling facility. In addition, AB 2153 would authorize funds
in the Lead-Acid Battery Cleanup Fund to be used towards
repaying the General Fund loan.
The April 14 version of the bill authorized use of the funds 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.
The author may wish to consider amending the bill to clarify
that the funds can be used beyond cleanup at recycling
facilities (of which there are only two in California) and be
used at any facility that may have lead contamination resulting
from the production, recycling, or improper disposal of
lead-acid batteries and activities.
Manufacturer credits: Under AB 2153, any funds spent by DTSC for
any eligible lead-related activities must be drawn from the Lead
Acid Battery Cleanup Fund before drawing from any other fund
source. The bill also requires the financial obligations of any
manufacturer found financially responsible for any lead-related
activity (site cleanup) to be reduced by the amount that the
manufacturer remitted in Manufacturer Battery Fee or voluntary
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fees. If a manufacturer is found responsible for site cleanup,
those fees act like a deposit on their cleanup costs. If a
manufacturer is never found responsible for site cleanup, those
remitted fees help to cover other manufacturer or recycler's
cleanup costs, which could be considered a way of mandating
corporate social responsibility.
Accounting correction: The bill requires DTSC to deplete all
funds in the Lead-Acid Battery Cleanup Fund before it can seek
to recover funds from a person who has remitted a Manufacturer
Battery Fee, unless that person is an owner or operator of a
contaminated site.
The bill also states that the balance of a judgment against any
person responsible for a contaminated site and who has remitted
any amount of Manufacturer Battery Fees shall be reduced by the
amount that person has remitted to the state.
If the fees are remitted on a quarterly basis, the fund will
likely never be extinguished, which prevents DTSC from recouping
costs from an RP who is not an owner or operator or legal
successor of a site. Under current law, there is a statute of
limitations on when DTSC can recoup costs of removal or remedial
actions, which is within three years after completion of all
response or corrective actions have been certified by DTSC or a
regional water quality control board.
The author may wish to consider correcting this provision to
eliminate any constraint on DTSC from recovering costs from an
RP.
Clarifying responsibility: A manufacturer could have more than
one wholesaler selling lead-acid batteries in California. The
bill does not determine any threshold at which the manufacturer
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is released from responsibility. The bill simply requires a
wholesaler to notify intent to pay the Manufacturer Battery Fee.
If a wholesaler who manages 20% of a manufacturer's battery
sales in California elects to pay the Manufacturer Battery Fee,
it's unclear if the manufacturer is off the hook for the fee for
the other 80% of its batteries sold in California. The author
may wish to consider clarifying the manufacturer's obligations
under the bill so that they are commensurate with the
wholesaler(s) paying the fee on that manufacturer's behalf, or
simply stating that any single wholesaler paying the
Manufacturer Battery Fee on behalf of a manufacturer shall
assume responsibility for the entirety of the manufacturer's
inventory sold in California.
Keeping score: In order to accurately determine how much a
person has remitted in Manufacture Battery Fees when determining
the amount of a judgment or settlement, DTSC will need to know
exactly which manufacturers and wholesalers have remitted fees
and how much each remitted.
The author may wish to add language requiring the BOE to keep
track of how much and from whom the fees were remitted, and
require the BOE to transmit that information to DTSC on a
regular basis.
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
returned. California adopted a modified version of the model
legislation in 1989 with only two of those components:
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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, many 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 conditionally 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
is supposed to give retailers a tool to comply with those laws
by incentivizing consumers to return their batteries. However,
the core charge is unevenly charged and refunded in the retail
industry, which has created an inconsistent implementation of
the core charge amongst California car battery dealers.
Establishing a state-mandated fee-for-recycling will compel all
lead-acid battery manufacturers and dealers to comply with the
requirements set forth in this bill and prevent an ongoing
patchwork of retailer participation, as is the case under the
current core charges.
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Since AB 2153 is intending to replace the existing, voluntary
industry core charge with a statutory charge, the author may
wish to consider adding language to clarify the charge required
under this bill shall supplant any voluntary core charge
currently being charged to prevent a consumer from being charged
two times by a retailer.
Governor's Budget: The May Revise proposed an increase and two
positions for DTSC to evaluate listing lead-acid batteries as
"priority products" subject to DTSC's Safer Consumer Products
regulations. As part of DTSC's Hazardous Waste Reduction
Initiative, it will conduct research, engage with stakeholders,
evaluate options, and implement recommended actions to better
protect the people and environment of California from adverse
impacts related to the manufacture, use, recycling, and disposal
of lead acid batteries.
AB 2153 would preclude lead-acid batteries from consideration
for inclusion in the Safer Consumer Products Regulations as long
as the national recycling rate for lead in batteries determined
by the methodology accepted by the US EPA employed in the BCI's
National Recycling Rate Study exceeds a to be determined
percentage.
While the bill is mindful of the Administration's budget
proposal, it is in conflict with the direction of that proposal.
According to the auto care industry, 99.6% of all lead-acid core
batteries are recycled in California. Supposing that statistic
is accurate for California, the author will have to consider
what percentage could be applied to the bill to render the
exemption meaningful.
In addition, the proposed exemption for lead-acid batteries
would be precedent setting. The intent of the Safer Consumer
Product Program is to do a comprehensive analysis of products,
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chemicals, and exposure pathways, and prioritize the most
dangerous chemicals for regulation to protect public health and
limit Californians' exposure to hazardous chemicals.
Creating an exemption, which would likely be followed up with
future statutory exemptions, would weaken the intent of the
program and diminish the value the program serves the public.
Federal Toxic Substances Control Act (TSCA) reform: Congress is
actively working on legislation to update and reform TSCA, the
federal chemical policy. One of the versions being considered in
the US Senate (Chemical Safety for the 21st Century Act (S.
697)), however, contains preemption language that would
eliminate state authority to maintain or develop protections
against dangerous chemicals before compliance with new federal
rules is required; in other words, it would preempt state
chemical management laws, such as California's Safer Consumer
Products Program.
On September 30, 2015, Governor Jerry Brown sent a letter to the
Senate Majority Leader asking that the regulatory pause in S.
697 be eliminated. Matt Rodriguez, Secretary for Environmental
Protection at the California Environmental Protection Agency,
also sent a letter asking that S. 697's preemption provisions be
removed as it would prevent California from fully implementing
Safer Consumer Products program.
The Administration's letters to Congress on this point
underscore the priority of the state to maintain the integrity
of the Safer Consumer Products Program.
Additional issues for consideration: As this bill moves through
the Legislature, the author and the Legislature should consider
the following issues:
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1)The baseline amount of the "deposit" portion of the fee. The
author acknowledges this is an issue to be worked out.
Statutorily establishing the core fee (the amount in addition
to the nonrefundable Consumer Battery Fee) will ensure
consumers pay the same fee statewide. This is especially
important if the refund must be paid regardless of where the
battery is returned.
2)Restoring current law under H&S § 25215.2 for returning
lead-acid batteries to a dealer to prevent any limitation on
consumer flexibility for returning spent batteries to a
dealer.
3)Clarification of the recycling symbol to be included on all
lead-acid batteries.
4)Expanding how the fee revenues in the Lead-Acid Battery
Cleanup Fund can be used to be more consistent with the April
14 version of the bill.
5)Correcting confusion over when DTSC can take action and when
the Lead-Acid Battery Cleanup Fund is extinguished to
eliminate any constraint on DTSC from recovering costs from an
RP.
6)Proportionality of wholesaler payment of the Manufacturer
Battery Fee and the total manufacturer's battery sales.
7)Requiring the BOE to keep track of how much and from whom the
fees were remitted, and requiring the BOE to transmit that
information to DTSC on a regular basis.
8)The differences between the Green Chemistry proposals in the
bill and the impacts on the Governor's proposed budget.
9)To prevent obfuscating DTSC's budget processes for funding
hazardous waste cleanup, consider how language impacts DTSC's
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current process.
10)Eliminating prohibitions on loans to other programs. The
Legislature has used loans from state funds to balance the
budget, and restricting loans restricts the budgeting process
for future legislatures.
11)Clarifying the charge required under this bill shall supplant
any voluntary core charge currently being charged to prevent a
consumer from being charged two times by a retailer.
REGISTERED SUPPORT / OPPOSITION:
Support
Action Now
Battery Council International
California Communities Against Toxics
California Labor Federation
California Safe Schools
Coalition For A Safe Environment
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Del Amo Action Committee
Desert Citizens Against Pollution
Healthy Homes Collaborative
Motor and Equipment Manufacturers Association
Society for Positive Action
Opposition
None on file.
Analysis Prepared by:Paige Brokaw / E.S. & T.M. / (916) 319-3965