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 --