BILL ANALYSIS Ó SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Wieckowski, Chair 2015 - 2016 Regular Bill No: AB 2153 ----------------------------------------------------------------- |Author: |Cristina Garcia | ----------------------------------------------------------------- |-----------+-----------------------+-------------+----------------| |Version: |6/1/2016 |Hearing |6/15/2016 | | | |Date: | | |-----------+-----------------------+-------------+----------------| |Urgency: |Yes |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Rachel Machi Wagoner | | | | ----------------------------------------------------------------- SUBJECT: The Lead-Acid Battery Recycling Act of 2016 ANALYSIS: Existing law: 1)Under the federal Resource Conservation and Recovery Act (RCRA) of 1976, governs the disposal of hazardous waste: a) Through regulation, sets standards for the treatment, storage, transport, tracking and disposal of hazardous waste in the United States. b) Authorizes states to carry out many of the functions of the federal law through their own hazardous waste laws if such programs have been approved by the United States Environmental Protection Agency (US EPA). 2)Under the California Hazardous Waste Control Act (HWCA) of 1972: a) Establishes the Hazardous Waste Control program; b) Regulates the handling, transport and disposal of hazardous waste and authorizes the Department of Toxic Substances Control (DTSC) to implement and enforce HWCA and RCRA. c) Prohibits the disposal of a lead-acid battery at a solid waste facility, or on or in any land, surface waters, AB 2153 (Cristina Garcia) Page 2 of ? watercourses, or marine waters. d) Requires retailers to accept the trade-in of a spent lead-acid battery by a consumer upon purchase of a new one. e) Governs the management of used lead-acid batteries as a hazardous waste and provides alternative management standards for the recycling of lead acid batteries. f) Requires all lead-acid batteries purchased by any state agency 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. g) A violation of the existing lead-acid battery management provisions is punishable as a misdemeanor with a fine of not more than one thousand dollars ($1,000) or by imprisonment for up to six months in a county jail or by both that fine and imprisonment for the first violation. If the conviction is for a second or subsequent violation, the person shall, upon conviction, be punished by imprisonment in the county jail for not more than one year or by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code for 16, 20, or 24 months. The court shall also impose upon the person a fine of not less than five thousand dollars ($5,000) or more than twenty-five thousand dollars ($25,000). 3) Requires the Department of Resources, Recycling and Recovery (CalRecycle) to coordinate with DTSC to develop and implement a public information program to provide uniform and consistent information on the proper disposal of hazardous substances found in and around homes, and to assist the efforts of counties required to provide household hazardous collection, recycling, and disposal programs. This bill: Establishes new fees on lead-acid batteries to fund lead contamination cleanup. Specifically, this bill: AB 2153 (Cristina Garcia) Page 3 of ? 1)Repeals and adds 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. 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. Requires 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. AB 2153 (Cristina Garcia) Page 4 of ? 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. Requires the wholesaler to notify BOE, DTSC, and the manufacturer of its intention to pay the 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 AB 2153 (Cristina Garcia) Page 5 of ? 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 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 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. AB 2153 (Cristina Garcia) Page 6 of ? 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. 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 being sought to compel any person who has remitted fees to AB 2153 (Cristina Garcia) Page 7 of ? take any eligible lead-related activity at a site unless the Lead-Acid Battery Cleanup Fund has been exhausted by the state. 29) Rather than providing that a violation of lead acid batteries is a misdemeanor, authorizes DTSC to impose civil administrative penalties not to exceed $1,000 per day on any person who is in violation and does not provide for more severe fines for subsequent violations. In assessing or reviewing the amount of a civil penalty imposed for a violation of this article, DTSC or the court shall consider all of the following: a) The nature and extent of the violation. b) The number and severity of the violation or violations. c) The economic effect of the penalty on the violator. d) Whether the violator took good faith measures to comply with this article and the period of time over which these measures were taken. e) The willfulness of the violator's misconduct. f) The deterrent effect that the imposition of the penalty would have on both the violator and the regulated community. g) Any other factor that justice may require. 30) Requires all penalties to be deposited into the Lead-Acid Battery Cleanup Fund. AB 2153 (Cristina Garcia) Page 8 of ? 31) 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. 32) Establishes the effective date as January 1, 2017. Background 1) Lead Acid Batteries. Lead acid batteries are rechargeable batteries made of lead plates situated in sulfuric acid within a plastic casing. They are used globally for a wide range of purposes, most commonly in vehicles like automobiles, boats, trucks industrial vehicles. There is approximately 6 million tons of lead used worldwide annually. Three quarters of that is used for 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. The average battery contains 17.5 pounds of lead and 1.5 gallons of sulfuric acid. For example, more than 25 million motor vehicles are registered in California. Each vehicle currently still uses a lead-acid battery. 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. The demand for lead is high and as such lead is a highly valued commodity that makes recycling highly profitable. 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. AB 2153 (Cristina Garcia) Page 9 of ? Lead-acid batteries contain chemicals that have the potential to be hazardous to your health and the environment. The batteries contain lead, a highly toxic metal, and sulfuric acid, a corrosive electrolyte solution. Since both of these materials are classified as hazardous, it is very important that the battery be handled properly. Contact with the sulfuric acid solution may lead to irritation or burns to the skin, or irritation to the mucous membranes of the eyes or the upper respiratory system. Symptoms of low-level lead exposure include fatigue, impaired central nervous system functions, and impaired learning. Severe lead poisoning can result in coma, convulsions, irreversible neurological damage, seizures, and even death. If lead-acid batteries are disposed of in a solid waste landfill or illegally dumped, the lead and sulfuric acid can seep into the soil and contaminate groundwater, potentially affecting the quality of our drinking water supply. If the batteries are disposed of near rivers, streams, lakes, or marine waters, the lead and sulfuric acid can also threaten aquatic life. In California, lead-acid batteries are a hazardous waste unless they are recycled. California law specifies management for lead-acid batteries when entering the recycling stream. To recover lead from a battery for recycling, the battery is broken and the components are classified. The lead containing components are processed in a furnace or smelter. Humans have been smelting lead for thousands of years, poisoning themselves in the process. Although lead poisoning is one of the oldest known work and environmental hazards, the modern understanding of the small amount of lead necessary to cause harm did not come about until the latter half of the 20th century. No safe threshold for lead exposure has been discovered-that is, there is no known amount of lead that is too small to cause the body harm. Lead smelters with little pollution controls have contributed to several environmental problems, especially raised blood lead levels in the surrounding population. The problem is particularly significant in many children who have grown up in proximity to a lead smelter. AB 2153 (Cristina Garcia) Page 10 of ? The United States and California have increased regulations over smelting operations to decrease potential environmental and public health exposures to smelting emissions and contamination over the last several decades. However, there are many historic smelters in California, like the Exide facility in Vernon, that have historic pollution that goes back for many decades prior to the air, soil and water regulations of today. As of 2015, there is only one lead smelter, recycler of lead-acid batteries in California. That is Quemetco West LLC in the City of Industry. 2) 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. AB 2153 (Cristina Garcia) Page 11 of ? In February, 2016, Governor Jerry Brown announced a budget proposal for funding cleanup in the polluted communities surrounding the shuttered Exide facility. The proposal includes making $176.6 million available to DTSC to expedite and expand testing and cleanup of residential properties, schools, daycare centers and parks in the 1.7 mile radius around the facility and remove contaminated soil at the properties that have the highest lead levels and greatest potential to expose residents. 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. Comments 1) Purpose of 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." 2) So much more than a funding mechanism for cleanups: This Lets Manufacturers off the Hook by: a) Changing the HWCA to create a complicated system by which to hold battery manufacturers responsible as responsible parties. b) Changing the HWCA to remove the crime and decrease civil penalties for lead acid battery violations. AB 2153 (Cristina Garcia) Page 12 of ? c) Fundamentally changing, under HWCA, the existing cleanup reimbursement, penalty and prosecution regime under which the state can pursue the owner/operator of the site and/or anyone who generated or arranged for wastes to be transported to the contaminated site. This bill instead requires the state to exhaust all of its efforts to recover reimbursement from the owner/operator of a site before it can go after anyone else who might be liable under current law. d) Creating a "pooled account" for liability for cleanups that is funded not just by manufacturers but by consumers that must be depleted prior to holding a contributing manufacturer responsible for a cleanup that it is responsible for. Additionally, the manufacturer can recoup its "fee" by passing it along to the consumer by raising its prices. e) Shifts burden of cleanup costs from manufacturers/wholesalers to consumers and site owners/operators. By providing significant protections from liability to manufacturers and wholesalers, and requiring the state to first exhaust efforts to recover reimbursement from the site owner/operator, this bill shifts the burden of cleanup costs away from manufacturers and wholesalers. The state will only be able to pursue a manufacturer or wholesaler for reimbursement or cleanup after efforts to force the site owner/operator have failed. Even then, manufacturers and wholesalers will be insulated from liability because they will have simply passed the costs of the tax onto consumers through higher product prices. f) Hindering a responsible party's ability to recover judgments against a manufacturer or wholesaler who has paid this new "fee." This bill also reduces the amount of money that a battery manufacturer or wholesaler will have to pay to the owner/operator of a site for cleanup costs. Under existing law, the state can force the owner/operator to reimburse the state for all cleanup costs. That owner/operator can then sue any other responsible party for contribution. AB 2153 (Cristina Garcia) Page 13 of ? This means that if a court finds the owner 60% liable and another responsible party 30% liable, the owner can recover that 30% from the other responsible party. This bill would prohibit the owner from recovering from a manufacturer or wholesaler the amount of the taxes the manufacturer or wholesaler paid into the cleanup fund thereby undercutting a responsible party's ability to seek contribution from other responsible parties. g) May inadvertently double the amount of liability protection manufacturers and wholesalers receive. The bill also seems to double-count the "credit" that a battery manufacturer or wholesaler gets from paying into the fund. Under proposed Section 25215.55(a)(1), the manufacturer's/wholesaler's liability for reimbursement costs shall be reduced by the amount the manufacturer/wholesaler paid in taxes and by the amount recovered by the state from the site owner/operator. Section 25215.5 already requires the state to fully deplete the Cleanup fund before it can go after a manufacturer or wholesaler. As such, any additional "credit" for moneys paid into the fund will essentially double count those contributions. This may be complicated because the bill fails to define what the "payor's liability" is as referenced in 25215.55. h) Grants an exemption for lead-acid batteries from California's Safer Consumer Product Regulations. This bill exempts lead-acid batteries from regulation under the state's Green Chemistry program. While these have a high recycling rate, some may object to any statutory exemption from the program. Indeed, this conflicts with the Governor's May Revise proposal that requires DTSC to consider whether lead-acid batteries should be added to the initial list of priority products that DTSC may regulate over the next few years. Finally, it is not clear that the exemption should be predicated on a national lead-acid battery collection rate. 3) Tax not a Fee. The bill collects a consumer "fee" and AB 2153 (Cristina Garcia) Page 14 of ? manufacturer "fee" to be collected at the purchase of a new lead-acid battery and be deposited in the Lead-Acid Battery Cleanup Fund to be used to off-set cleanup costs for former and future sites that are contaminated by the mishandling of this hazardous waste stream. Under Proposition 26 of 2010 a fee (not a tax) is defined as: a) A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the state of conferring the benefit or granting the privilege to the payor. b) A charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the state of providing the service or product to the payor. c) A charge imposed for the reasonable regulatory costs to the state incident to issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof. d) A charge imposed for entrance to or use of state property, or the purchase, rental, or lease of state property, except charges governed by Section 15 of Article XI. A consumer and manufacturer fee that is pooled to cleanup contamination from mishandled lead-acid batteries does not meet these criteria. 4) Insult to Injury. Exide Industries is currently funding part of the cleanup of the neighborhood and facility in Vernon, California. In the event that the state uses the Cleanup Fund to cleanup sites other than the Exide Technologies recycling facility in Vernon, this bill perversely provides Exide with all the liability protections that other manufacturers will enjoy. Exide is one of the nation's largest lead-acid battery AB 2153 (Cristina Garcia) Page 15 of ? manufacturers. They declared bankruptcy and closed their Vernon facility as a result of the contamination caused by them and the site's previous operators. As such, it is not clear just how much the state will be able to recover from Exide for cleanup activities. Exide still remains one of the largest manufacturers and will likely opt to pay the $1/battery tax. If they do so, and if they are found liable for contamination at any other site in the state, they will also enjoy all of the immunities provided by this bill. 5) Potential for loss of jobs and innovation in California. This bill sets up a structure for battery manufacturers that sell in California to contribute to a fund that will be used to cleanup sites contaminated by used lead-acid battery handling. Unlike other programs in California that are funded by a consumer fee, this fund is not used to help spur recycling or new research and development for better products. In fact, this bill prohibits the state from using the fund for such activities. Other than reducing the financial liability for battery manufacturers by putting a-dollar-a-battery on the table, this bill does not help California innovate better battery, safer, cleaner battery technology. Rather it hinders that ability while attempting to clean up the industry's past contamination in California. Additionally, because there is only one smelter in California that is currently recycling a portion California's lead-acid battery waste, rather than create a better technology we are creating a system to ship our wastes to other countries where the transport and lead smelting process will harm the environment and public health elsewhere (where there is not a fee for cleanup of the contamination). 6) 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 AB 2153 (Cristina Garcia) Page 16 of ? 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, chemicals, and exposure pathways, and prioritize the most dangerous chemicals for regulation to protect public health and limit Californians' exposure to hazardous chemicals. 7) The Minutia of Administration of this Program. The structure of this bill is complicated - requiring the collection of $1.00 from a consumer, another from the manufacturer or a wholesaler who may choose to contribute in place of the manufacturer. The bill provides the retailer may retain 1.5 percent for administration and then also retain the deposit left by the consumer if that consumer did not return a used battery at the time of sale or within 45 days. Then the bill provides that up to 3 percent may go to the Board of Equalization and DTSC for state administration. How does the money get tracked? Who is enforcing all of these provisions and ensuring that the consumer gets their money back and is charged the correct amount? How is BOE tracking and administering the fund? Who is enforcing the labeling requirements of this bill or the signage requirements? This bill is very complicated and as such is likely to be very costly to administer and enforce. The state administration is limited to 3 percent of the amount collected. While that is potentially AB 2153 (Cristina Garcia) Page 17 of ? significant, the complexity of this program could exceed what is allotted, necessitating General Fund subsidies of the program. As the goal of the bill is repaying the General Fund for the loan for the cleanup around Exide, this seems counter to the goal of the bill. 8) Additional Concerns as raised by the Assembly Environmental Safety and Toxic Materials Committee. The following are concerns that were raised by the analysis of this bill by the Assembly Environmental Safety and Toxic Materials Committee. In the hearing of this bill in that committee on June 1, 2016, the author committed to addressing these issues in the Senate. a) 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 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. AB 2153 (Cristina Garcia) Page 18 of ? b) 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 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. c) 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 a Responsible Party (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. d) 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 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 AB 2153 (Cristina Garcia) Page 19 of ? 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. e) 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: i. 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, ii. 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) AB 2153 (Cristina Garcia) Page 20 of ? 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. 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. 9) Additional issues for consideration: As raised and suggested by the Assembly Committee on Environmental Safety and Toxic Materials, the author committed to addressing the following additional issues: a) 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 AB 2153 (Cristina Garcia) Page 21 of ? of where the battery is returned. b) 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. c) Clarification of the recycling symbol to be included on all lead-acid batteries. d) 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. e) 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. f) Proportionality of wholesaler payment of the Manufacturer Battery Fee and the total manufacturer's battery sales. g) 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. h) The differences between the Green Chemistry proposals in the bill and the impacts on the Governor's proposed budget. i) To prevent obfuscating DTSC's budget processes for funding hazardous waste cleanup, consider how language impacts DTSC's current process. j) Eliminating prohibitions on loans to other programs. The Legislature has used loans from state funds to balance AB 2153 (Cristina Garcia) Page 22 of ? the budget, and restricting loans restricts the budgeting process for future Legislatures. aa) 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. DOUBLE REFERRAL: This measure provides liability relief provisions and restructures the judicial review of responsibility for remediation under HWCA for lead-acid battery manufacturers. If this measure is approved by the Senate Environmental Quality Committee, the do pass motion must include the action to re-refer the bill to the Senate Judiciary Committee. SOURCE: Author SUPPORT: Action Now Battery Council International California Automotive Wholesalers Association California Communities Against Toxics California Labor Federation California League of Conservation Voters California Safe Schools Californians Against Waste Coalition For A Safe Environment Del Amo Action Committee Desert Citizens Against Pollution Healthy Homes Collaborative Motor and Equipment Manufacturers Association Society for Positive Action OPPOSITION: None received -- END -- AB 2153 (Cristina Garcia) Page 23 of ?