BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                              Senator Wieckowski, Chair
                                2015 - 2016  Regular 
           
          Bill No:            AB 2153
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          |Author:    |Cristina Garcia                                      |
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          |Version:   |6/1/2016               |Hearing      |6/15/2016       |
          |           |                       |Date:        |                |
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          |Urgency:   |Yes                    |Fiscal:      |Yes             |
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          |Consultant:|Rachel Machi Wagoner                                 |
          |           |                                                     |
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          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,  







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               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:  










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          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. 










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          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  








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            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.   










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          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  








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            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. 








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          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.









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          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.









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               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. 








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             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.









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                  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.   








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                    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  








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               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  








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               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  
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               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  
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               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  
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             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  
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               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  
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               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  
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                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  
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                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 --
          









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