BILL ANALYSIS Ó
AB 2153
Page 1
(Without Reference to File)
ASSEMBLY THIRD READING
AB
2153 (Cristina Garcia)
As Amended June 1, 2016
2/3 vote. Urgency
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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 | |
AB 2153
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| | | | |
| | | | |
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SUMMARY: Delete the contents of the bill, entirely, and replace
with the following new language to:
1)Repeal and amend Article 10.5 of Chapter 6.5 of the Health &
Safety Code regarding the management of lead-acid batteries.
2)Require 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)Authorize consumers to be refunded the deposit if the
lead-acid battery is returned within 45 days after purchase.
4)Require 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.
5)Require 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)Require all replacement lead-acid batteries to have a widely
understood recycling symbol.
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7)Require a lead-acid battery dealer to collect the California
Battery Fee at the time of sale and authorize the dealer to
retain 1.5-% 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)Require 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)Require all California Battery Fee and Manufacturer Battery
Fee revenues to be deposited into the Lead-Acid Battery
Cleanup Fund.
10)Require Department Toxic Substances Control (DTSC) and BOE to
be reimbursed for the costs of collection, auditing, and
administration of funds. Cap administrative costs at 3%.
11)Authorize 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
Manufacturer Battery Fee.
12)Authorize 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 appropriate all funds in the Lead-Acid Battery
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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)Require 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)Require 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)Require the balance of a judgment against any manufacturer
who has remitted any amount of Manufacturer Battery Fees to be
reduced by the amount the manufacturer has remitted to the
state.
17)State 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.
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18)Require 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)Prohibit funds from the Lead-Acid Battery Cleanup Fund from
funding Green Chemistry as it relates to lead-acid batteries.
20)Preclude 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 United States Environmental Protection Agency (US EPA)
employed in the Battery Council International's National
Recycling Rate Study exceeds a to be determined percentage.
21)State 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)Require 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.
23)Require 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)Authorize the state to bring an action against a manufacturer
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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)Require 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)State 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)State 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)Prohibit any administrative order or judicial relief from
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)Authorize 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.
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30)Establish 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)Establish the effective date as January 1, 2017.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, the April 14, 2016, version, of this bill would
result in:
1)Unknown, continuously appropriated costs for DTSC lead
clean-up activities clean-resulting from the battery charge;
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: 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
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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 United States Geological
Survey, the lead-acid battery industry accounted for about 90%
of reported United States 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.
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. This bill, 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.
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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
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.
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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.
Repaying the 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. However, it
is likely that a portion of the cleanup may not be attributable
to any identifiable responsible party; in other words, a portion
of the cleanup may be considered "orphan" share cleanup that the
state (taxpayers) is responsible for remediating and funding.
Therefore, the previous version of the bill (April 14) clarified
that funds from the fees accrued under this bill and deposited
into the Lead-Acid Battery Cleanup Fund may only be used to fund
any cleanup costs where there is no responsible party. This
bill could be further amended to make that same clarification.
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
Consumer Battery Fee would be paid by the consumer and $1
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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, this bill would authorize
funds in the Lead-Acid Battery Cleanup Fund to be used towards
repaying the General Fund loan.
Under this bill, 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 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.
Clarifying responsibility: A manufacturer could have more than
one wholesaler selling lead-acid batteries in California. Under
this bill, more than one wholesaler could assume responsibility
to pay the Manufacturer Battery Fee. The bill does not
determine any threshold at which the manufacturer is released
from responsibility. The bill simply requires a wholesaler to
notify intent to pay the Manufacturer Battery Fee. If a
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wholesaler manages 20% of the 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 making the manufacturer's obligations under the
bill commensurate with the wholesaler(s) paying the fee on that
manufacturer's behalf.
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
Battery Council International (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:
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 (Health and Safety Code Section (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
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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.
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.
This bill 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 United States EPA employed in
the BCI's National Recycling Rate Study exceeds a to be
determined percentage.
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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.
Federal Toxic Substances Control Act (TSCA) reform: Congress is
actively working on legislation to update and reform TSCA, which
is much needed action on 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:
1)The baseline amount of the "deposit" portion of the fee.
Statutorily establishing the core fee (the amount in addition
to the nonrefundable Consumer Battery Fee) will ensure
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consumers pay the same fee statewide. This is especially
important if the refund must be paid regardless of where the
battery is returned.
2)Clarification of the recycling symbol to be included on all
lead-acid batteries.
3)The differences between the Green Chemistry proposals in the
bill and the Governor's budget.
4)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.
5)To prevent obfuscating DTSC's budget processes for funding
hazardous waste cleanup, consider how language impacts DTSC's
current process.
6)Proportionality of wholesaler payment of the Manufacturer
Battery Fee.
Analysis Prepared by:
Paige Brokaw / E.S. & T.M. / (916) 319-3965 FN:
0003369