BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       AB 2153|
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                                   THIRD READING 


          Bill No:  AB 2153
          Author:   Cristina Garcia (D), et al.
          Amended:  8/9/16 in Senate
          Vote:     27 - Urgency

           SENATE ENVIRONMENTAL QUALITY COMMITTEE:  5-1, 8/3/16
           AYES:  Wieckowski, Hill, Jackson, Leno, Pavley
           NOES:  Gaines
           NO VOTE RECORDED:  Bates

           SENATE APPROPRIATIONS COMMITTEE:  5-2, 8/11/16
           AYES:  Lara, Beall, Hill, McGuire, Mendoza
           NOES:  Bates, Nielsen

           ASSEMBLY FLOOR:  55-16, 6/2/16 - See last page for vote

           SUBJECT:   The Lead-Acid Battery Recycling Act of 2016


          SOURCE:    Author

          DIGEST:   This bill establishes new fees on lead-acid batteries  
          to fund contamination cleanup caused by lead-acid batteries.  
          
          ANALYSIS:  

          Existing law: 

          1) Governs, under the federal Resource Conservation and Recovery  
             Act (RCRA) of 1976, 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.   








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             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) Enacts the California Hazardous Waste Control Act (HWCA) of  
             1972, which:


             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, 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.








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             g)    Provides that 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  
             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, 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.










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           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) Provides, on and after April 1, 2017, for the following:


              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. 


              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:  
             (a) the wholesaler and the BOE notify the manufacturer that  








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             the wholesaler has elected to be considered a manufacturer  
             and intends to remit the manufacturer battery fee for each  
             battery purchased, and (b) 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 (a) accept or consider any petition for  
             redetermination of fees determined or (b) 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  
             deposit the remainder into the Battery Cleanup Fund, created  








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             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 DTSC 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  








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                cleaning up areas of the state that have been contaminated  
                with lead by the production, handling, storage,  
                reclamation, or improper disposal of batteries.


           21)Authorizes, on and after July 1, 2017, the BOE to adopt  
             regulations, subject to the Administrative Procedures Act,  
             relating to the administration and enforcement of this  
             program.


           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. 


          Background


          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, 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  








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          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.   
          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  








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          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 lead-acid 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 DTSC. 


          DTSC is currently overseeing an investigation to determine if  
          past airborne lead emissions impacted the area surrounding the  
          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.  


          Comments


          Purpose of Bill.  According to the author, "AB 2153 will create  
          a state mandated Lead-Acid (Car) Battery fee that will serve as  








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          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."
          FISCAL EFFECT:   Appropriation:    Yes         Fiscal  
          Com.:YesLocal:   Yes


          According to the Senate Appropriations Committee:




           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 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).

          SUPPORT:    (Verified  8/11/16)


          Action Now
          California Communities Against Toxics
          California Safe Schools
          Coalition for a Safe Environment
          Del Amo Action Committee
          Desert Citizens Against Pollution
          Healthy Homes Collaborative
          Los Angeles County
          Society for Positive Action
          Tree People








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          OPPOSITION:   (Verified8/11/16)


          Autocare Association
          California Automotive Wholesaler's Association
          Quemetco




          ASSEMBLY FLOOR:  55-16, 6/2/16
          AYES:  Alejo, Arambula, Atkins, Baker, Bloom, Bonilla, Bonta,  
            Brown, Burke, Calderon, Campos, Chau, Chávez, Chiu, Chu,  
            Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier,  
            Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez,  
            Gonzalez, Gordon, Gray, Roger Hernández, Holden, Irwin,  
            Jones-Sawyer, Levine, Lopez, Low, McCarty, Medina, Mullin,  
            Nazarian, O'Donnell, Olsen, Quirk, Ridley-Thomas, Rodriguez,  
            Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams,  
            Wood, Rendon
          NOES:  Achadjian, Travis Allen, Brough, Grove, Harper, Jones,  
            Kim, Lackey, Maienschein, Mathis, Melendez, Obernolte,  
            Patterson, Steinorth, Wagner, Waldron
          NO VOTE RECORDED:  Bigelow, Chang, Dahle, Beth Gaines,  
            Gallagher, Hadley, Linder, Mayes, Wilk

          Prepared by:Rachel Machi Wagoner / E.Q. / (916) 651-4108
          8/15/16 20:22:14


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