BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2153 (Cristina Garcia) - The Lead-Acid Battery Recycling Act
of 2016
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|Version: August 9, 2016 |Policy Vote: E.Q. 5 - 1 |
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|Urgency: Yes |Mandate: Yes |
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|Hearing Date: August 11, 2016 |Consultant: Narisha Bonakdar |
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This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 2153 establishes new fees on lead-acid
batteries to fund contamination cleanup caused by lead-acid
batteries.
Fiscal
Impact:
Approximately $1.2 million for the first two years of
implementation and ongoing costs of approximately $1.6 million
annually (Battery Cleanup Fund) to the Board of Equalization
(BOE) for implementation and administration of the program.
Minor costs to the Department of Toxic Substances Control
(Battery Cleanup Fund).
Up to $32 million in revenue from the fee assessment (Battery
Cleanup Fund)
Background:
Lead-Acid Batteries. Lead-acid batteries are rechargeable
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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, and industrial vehicles. 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 California BOE'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.
The United States and California have increased regulations over
smelting operations (the process through which lead is
retrieved) to decrease potential environmental and public health
exposures to smelting emissions and contamination. However, some
smelters in California, like the Exide facility, have pollution
resulting from operations prior to the air, soil and water
regulations of today.
The Past - 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
per day, providing a source of lead for new batteries. During
its 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 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.
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DTSC estimates homes between 1.3 and 1.7 miles away from the
facility may potentially be affected by Exide's lead
contamination-somewhere between 5,000 - 10,000 residential
properties. Assuming cleanup costs of approximately $45,000 per
home, the total cost of cleanup in and around the Exide facility
is expected to top $500 million.
The Budget. In February, 2016, Governor Jerry Brown announced a
budget proposal to fund 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.
The Present - Quemetco West LLC. The Quemetco, Inc. facility in
the City of Industry recycles leadacid batteries. The facility
has been in operation since 1959 and operates under several
different permits and regulations including:
Air Quality overseen by the South Coast Air Quality
Management District.
Water Quality overseen by the Los Angeles Regional Water
Quality Control Board and the Los Angeles County Sanitation
District.
Hazardous Waste overseen by the Department of Toxic
Substances Control.
DTSC is currently overseeing an investigation to determine if
past airborne lead emissions impacted the area surrounding the
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facility. Beginning in July 2016, DTSC has ordered numerous
corrective actions due to, among other things, its failure to
have a functioning leak-detection system and maintain its
containment building and failure to maintain an adequate
groundwater and surface water monitoring system.
Proposed Law:
This bill, the Battery Recycling Act of 2016:
1.Defines several terms for the purposes of the bill.
2.Prohibits a person from disposing, or attempting to dispose,
of a battery at a solid waste facility or on or in any land,
surface waters, watercourses, or marine waters.
3.Allows a person to dispose of a battery at (1) a battery
recycling facility, or (2) a dealer, as defined.
4.Requires a dealer to accept up to six used batteries, and
prohibits the dealer from charging any fee to receive battery.
5.Requires a dealer to assess a fee between $15 and $100,
depending on battery size, for each battery purchased unless a
used battery of the same type and size is provided, as
specified, and specifies requirements related to the fee.
6.Requires a dealer to charge a nonrefundable $1 California
battery fee for each battery purchased.
7.Makes certain exemptions regarding acceptance of the battery
and the charging of fees.
8.On and after April 1, 2017,
a. Imposes a $1 California battery fee for each
replacement battery, and specifies how a dealer must
assess the fee, and authorizes a dealer to retain 11/2
percent of the fee as reimbursement for any costs
associated with the collection of the fee, and requires
that the remainder of the fee is paid to the BOE.
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b. Imposes a $1 manufacturer battery fee on a battery
manufacturer (manufacturer) for each battery it sells.
c. Allows a wholesaler who ships or arranges for the
shipment of used batteries to a battery recycling
facility to elect to be considered a manufacturer, and
specifies requirements related to this election.
9.Exempts a manufacturer from the manufacturer battery fee if:
(1) the wholesaler and the BOE notify the manufacturer that
the wholesaler has elected to be considered a manufacturer and
intends to remit the manufacturer battery fee for each battery
purchased, and (2) the manufacturer has registered with the
BOE, and submits informational returns, as required.
10.Allows a manufacturer who is otherwise exempt from fee
requirements to voluntarily submit an additional $1
manufacturer battery fee, and specifies that this does not
relieve a wholesaler from its responsibility to remit a
manufacturer battery fee.
11.Prohibits a manufacturer that submits a manufacturer battery
fee from imposing or passing on the voluntarily remitted fees
to a wholesaler, and specifies other related requirements.
12.Requires the BOE to establish appropriate procedures for
providing notifications and fee payments procedures, and
outlines requirements for the BOE to collect fees.
13.Requires the BOE to (1) accept or consider any petition for
redetermination of fees determined or (2) accept or consider a
claim for refund of fees paid, if the claim for refund is
founded upon the grounds that a battery is or is not a
battery.
14.Requires dealers, manufacturers, importers, and battery
wholesalers to register with the BOE.
15.Outlines tax filing requirements, and authorizes the BOE to
require fee payments and tax return filings for other than
quarterly periods.
16.Requires the BOE to retain an amount of fees collected
sufficient to pay refunds and cover the BOE expenses, and
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deposit the remainder into the Battery Cleanup Fund, created
by this bill.
17.Allows monies in the fund to pay for the following:
a. Investigation, site evaluation, cleanup, abatement,
remedy, removal, monitoring, or other response actions at
any area of the state that has been contaminated by the
production, recycling, or improper disposal of batteries.
b. Administration of the Battery Cleanup Fund.
c. Repayment of a loan authorized in this bill.
18.Requires the Department of Toxic Substances Control to report
annually to the Governor and to the Legislature on the status
of the Battery Cleanup Fund, and on its progress implementing
this program.
19.Authorizes a loan of an unspecified amount from the General
Fund or a special fund to the BOE for implementing the
collection of the California battery fee and the manufacturer
battery fee, and requires the loan to be repaid from the
proceeds of the fee.
20.Applies the following to funds loaned from the General Fund
to the Toxic Substances Control Account for the cleanup of
lead contamination in the state:
a. Money from the Battery Cleanup Fund may be used
towards repaying the loan.
b. Any moneys designated as repayment of the loan must
be deposited to that loan, but be available to be loaned
to the Toxic Substances Control Account for the purposes
of cleaning up areas of the state that have been
contaminated with lead by the production, handling,
storage, reclamation, or improper disposal of batteries.
21.On and after July 1, 2017, authorizes the BOE to adopt
regulations, subject to the Administrative Procedures Act,
relating to the administration and enforcement of this
program.
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22.Requires each manufacturer to notify the distributors,
wholesalers, and dealers of the requirements outlined in this
bill.
23.Specifies that no reimbursement is required for
implementation of this bill.
24.States that this bill is an urgency measure, which will take
effect once signed by the Governor.
Staff Comments: 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."
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