BILL ANALYSIS Ó SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Wieckowski, Chair 2015 - 2016 Regular Bill No: AB 2153 ----------------------------------------------------------------- |Author: |Cristina Garcia | ----------------------------------------------------------------- |-----------+-----------------------+-------------+----------------| |Version: |8/31/2016 |Hearing |8/31/2016 | | | |Date: | | |-----------+-----------------------+-------------+----------------| |Urgency: |Yes |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Rachel Wagoner | | | | ----------------------------------------------------------------- SUBJECT: The Lead-Acid Battery Recycling Act of 2016 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. 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: AB 2153 (Cristina Garcia) Page 2 of ? 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. 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 AB 2153 (Cristina Garcia) Page 3 of ? 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 establishes new fees on lead-acid batteries to fund contamination cleanup caused by lead-acid batteries. Specifically, this bill: 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 for recycling and caps the number of batteries that can be returned by a consumer at six lead-acid batteries per day. 3)Requires dealers to collect a refundable deposit on the sale of new batteries, depending on weight on the new lead-acid batteries sold if a used battery is not exchanged for the new battery. 4)Requires consumers to be refunded the deposit if the lead-acid battery is returned within 45 days after purchase. 5)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. 6)Provides that DTSC provide notice of an alleged violation of AB 2153 (Cristina Garcia) Page 4 of ? the noticing requirement no less than 60 days before the issuance of an order or filing an action imposing a civil penalty and provides that if a person corrects the alleged violation before the order or action is filed the department shall not impose the penalty. 7)Requires a lead-acid battery dealer to charge a non-refundable $1 California Battery Fee on each lead-acid battery sold to a person buying a replacement lead-acid battery, except as specified. 8)Requires all replacement lead-acid batteries to have a recycling symbol. 9)Requires a lead-acid battery dealer to collect the California Battery Fee at the time of sale and authorizes the dealer to retain 1.5% 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). 10)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. 11)Sunsets the $1 manufacturing after 5 years. 12)At the point of the manufacturing fee sunsets, increases the consumer fee to $2. 13)Requires all California Battery Fee and Manufacturer Battery Fee revenues be remitted to BOE for administration of the fee and the remainder to be deposited into the Lead-Acid Battery Cleanup Fund. 14)Continuously appropriates all funds in the Lead-Acid Battery AB 2153 (Cristina Garcia) Page 5 of ? Cleanup Fund to DTSC to fund ONLY the following activities: investigation, site evaluation, cleanup, remedial action, removal, monitoring, or other response actions at any area of the state that is reasonably suspected to have been contaminated by the operation of a lead acid battery recycling facility and repayment of General Fund loans for lead contamination cleanup. 15) 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. 16) States that "this article does not create a private cause of action. Nothing in this article shall be construed to affect, expand , alter or limit any requirement s, duties, rights, or remedies under other law, or limit the state or any other party from bringing any cause of action that may exist under any law." 17) 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. 18) Prohibits funds from the Lead-Acid Battery Cleanup Fund from funding Green Chemistry as it relates to lead-acid batteries or for any other purposes not specified above. 19)Requires DTSC to report annually to the Governor and to the Legislature on the status of the Lead-Acid Battery Cleanup Fund and on the department's progress to implement this article. 20)Provides a loan of $1.2 million from the California Tire Management Fund for the initial administration of this act that is to be paid back from the proceeds of the fee. 21) Requires all penalties to be deposited into the Lead-Acid Battery Cleanup Fund. AB 2153 (Cristina Garcia) Page 6 of ? 22) 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. Background Health Impacts Associated With Lead. Lead is a toxic metal, which doesn't break down in the environment and accumulates in our body. High levels of lead have been found in jewelry, especially inexpensive children's jewelry. Exposures to lead can lead to a number of health problems, including: behavioral problems learning disabilities joint and muscle weakness anemia organ failure and even death Children 6 years old and under are most at risk because their bodies are growing quickly. AB 2153 (Cristina Garcia) Page 7 of ? According to the Centers for Disease Control and Prevention there is no safe blood level in children. Lead is a leading environmental threat to children's health in the United States. When children are exposed to lead it has lifelong adverse effects, such as lowered IQ scores, learning and hearing disabilities, behavioral problems, difficulty paying attention, hyperactivity and disrupted postnatal growth. Lead exposure has decreased dramatically in the last 30 years due to lead bans, but experts point out that there are lead-poisoning hot spots throughout the country. The Los Angeles County Department of Public Health has found the highest concentration of blood lead levels in people under 21 years of age in South Los Angeles that is adjacent to Vernon, where Exide Technologies is located. 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 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) AB 2153 (Cristina Garcia) Page 8 of ? 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 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 the cleanup. Some estimates are $500 million dollars to conduct cleanups around Exide. 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: AB 2153 (Cristina Garcia) Page 9 of ? 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. It is unknown how much will be needed to remediate contamination in the area surrounding the Quemetco plant. However, it is likely to be very significant like the Exide cleanup the decades of contamination caused by that plant. 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. AB 2153 (Cristina Garcia) Page 10 of ? 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). 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) What is the purpose of this bill? The author states that the bill creates a fund to address contamination today rather than wait years until litigation against the responsible parties is complete. The author states that this bill does not provide any relief for manufacturers but simply provides them a credit against their liability in the future for the amount that they contribute to this Fund. However, in a letter submitted to the Assembly journal today, the author states, "It is my intent in authoring this bill, and the Legislature's intent in approving this legislation that rather than further delaying funding for clean up by choosing the costly path of litigation with an uncertain outcome against battery manufacturers or other parties who are not owners or operators of the battery recycling facilities, that the State choose instead the collaborative approach contained in this bill." While a letter to the journal of one house does not hold the weight of law, this letter states that it is the intent of the Legislature that the State not pursue litigation against responsible parties. AB 2153 (Cristina Garcia) Page 11 of ? This statement is directly contrary to the statements made by the Senate Environmental Quality Committee when this bill was heard on August 3, 2016. 3) Limitations of the bill. The language in the bill has been further constrained, contrary to the amendments taken in this committee on August 3, 2016, to allow the moneys generated by this bill to "fund ONLY the following activities: investigation, site evaluation, cleanup, remedial action, removal, monitoring, or other response actions at any area of the state that is reasonably suspected to have been contaminated by the operation of a lead acid battery recycling facility" and repayment of General Fund loans for lead contamination cleanup. What about other costs associated with lead acid batteries that are not directly linked to a lead acid battery recycling center (of which there are only 2 in California)? What about blood level testing and treatment in communities that have a historic burden from the use, recycling, disposal of lead acid batteries? What about social programs for those communities to help offset the lifelong health and educational impacts associated with the chronic poisoning of these entire communities? What about biomonitoring to establish what types of potential cumulative impacts may exist? What about any other program that may benefit these communities and the communities that are yet to be identified? Additionally, the amendments of the bill reinstate language removed by the Senate Environmental Quality Committee at the August 3, 2016 hearing, prohibiting these funds from being used for California to evaluate lead acid batteries as part of the Safer Consumer Products program (Green Chemistry). Why? Isn't it appropriate for the state to evaluate better products that do not contaminate our state and risk public health? 4) Temporary manufacturer fee for lifetime credit for contribution. This bill only collects $1 per battery sold in California for 5 years from manufacturers, but manufacturers can claim the credit in perpetuity - that includes not only legacy sites but contamination that hasn't even occurred yet. As written this bill creates a state sponsored savings fund for manufacturers. AB 2153 (Cristina Garcia) Page 12 of ? 5) How big is this problem? Does this bill do enough to address it? And at what cost? This bill will generate a maximum of $32 million dollars a year. It will take at least six years to repay the General Fund loan and at least another 10 to address the current estimated costs for remediation around Exide. In July, it was announced that DTSC is now investigating similar concerns around the Quemetco facility. It is unknown what other sites may exist across the state that may need remediation. This fee will not be sufficient to address that need. Does it make more sense to ask DTSC to give a thorough evaluation over the interim of the potential need of the state and craft a solution that will do what is needed for California? 6) What does this bill accomplish? This bill creates a new sources of revenue, collected at great administrative burden, that is not likely to be eligible to do much more than repay the $176 million General Fund loan appropriated in the year's budget. 7) Amendments Needed. a) The language prohibiting the use of this fund for Green Chemistry review of this product should be deleted. b) The amendments reinstate language removed by the Senate Environmental Quality Committee that provides that DTSC is required to provide notice of the alleged violations to any person alleged to be in violation of any provision of this article no less than 60 days before the issuance of any administrative penalty. If the person corrects the alleged violation before the issuance of an administrative penalty, DTSC shall not issue the administrative penalty. What prevents a dealer from hanging the sign and then removing it over and over again? This language sets a bad precedence and should be removed again. c) If the intent of this bill is to create a fund that offsets the damage done by lead acid batteries in California two amendments are needed. i) The fee should be at least $10 per battery. As mentioned above, at $2 a battery it will take at least AB 2153 (Cristina Garcia) Page 13 of ? six years to repay the General Fund loan and at least another 10 to address the current estimated costs for remediation around Exide. If the fund is to address other sites, like the Quemetco facility and others, yet to be identified sites throughout the state - the fee needs to be significantly increased. ii) The bill should be amended to remove the constraints on how the money can be used for contamination associated with lead acid batteries so that the state can address the decades of harm already done as well as prevent future harm. SOURCE: Author SUPPORT: Action Now Auto Care Association Battery Council International California Automotive Wholesalers' Association California Communities Against Toxics California League of Conversation Voters California Retailers Association California Safe Schools Californians Against Waste Coalition For A Safe Environment Del Amo Action Committee Desert Citizens Against Pollution Healthy Homes Collaborative Los Angeles County Board of Supervisors Los Angeles County Solid Waste Management Committee/Integrated Waste Management Task Force Mothers of East Los Angeles Natural Resources Defense Council Resurrection Church Society for Positive Action OPPOSITION: AB 2153 (Cristina Garcia) Page 14 of ? Howard Jarvis Taxpayers Association Quemetco -- END --