BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2153| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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. AB 2153 Page 2 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. AB 2153 Page 3 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. AB 2153 Page 4 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 AB 2153 Page 5 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 AB 2153 Page 6 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 AB 2153 Page 7 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 AB 2153 Page 8 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 AB 2153 Page 9 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 AB 2153 Page 10 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 AB 2153 Page 11 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 **** END ****