BILL ANALYSIS �
SB 1194
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Jerry Hill, Chair
2013-2014 Regular Session
BILL NO: SB 1194
AUTHOR: Hueso
AMENDED: April 21, 2014
FISCAL: Yes HEARING DATE: April 30, 2014
URGENCY: No CONSULTANT: Joanne Roy
SUBJECT : SOLID WASTE: PLASTIC PRODUCTS
SUMMARY :
Existing law :
1) Finds and declares that it is the public policy of the state
that environmental marketing claims should be substantiated
by competent and reliable evidence to prevent deceiving or
misleading consumers about the environmental impact of
plastic products. (Public Resources Code (PRC) �42355.5).
2) Prohibits the sale of a plastic product that is labeled
"compostable," "home compostable," or "marine biodegradable"
unless it meets certain standard specifications. (PRC
�42357(a)).
3) Prohibits the sale of a plastic product that is labeled as
"biodegradable," "degradable," "decomposable," or implies
that the plastic product will break down, fragment,
biodegrade, or decompose in a landfill or other environment,
except as provided in PRC �42357(a). (PRC �42357(b)).
4) Requires a manufacturer or supplier to provide a person,
upon request and within 90 days of the request, easily
understandable and scientifically accurate documentation of
compliance with the requirements above. (PRC �42357).
5) Defines "plastic product" as a product made of plastic,
alone or in combination with other material. (PRC �42356).
6) Imposes a civil liability of $500 for the first violation of
the statutes related to marketing of plastic products,
SB 1194
Page 2
$1,000 for the second violation, and $2,000 for the third
and any subsequent violation. (PRC �42358).
7) Imposes specified requirements on California-incorporated
corporations and on out-of-state corporations that are
headquartered in California or customarily hold their board
meetings in California. Requires the corporate board of a
corporation with 100 or more shareholders to send an annual
report to its shareholders. (Corporations Code �1501).
8) Defines "retail sale" as "a sale for any purpose other than
resale in the regular course of business in the form of
tangible personal property." (Revenue and Taxation Code
�6007).
This bill :
1) Requires a manufacturer of plastic products to include the
following information in a report that is posted on a
website available to the public or as part of an annual
shareholders' report that is required by Corporations Code
�1501:
a) Whether the manufacturer has adopted a sustainability
policy and the elements of that policy.
b) Whether the manufacturer has established goals to
reuse, recover, and reduce the use of plastics in its
products and a description of the goals.
c) What progress has been made in meeting those goals if
the manufacturer has implemented those goals as part of a
sustainability policy.
2) Defines "manufacturer" as "a person who manufactures plastic
products for sale in this state and whose annual aggregate
proceeds is not less than $1 million.
3) Defines "sale" as the sale of a plastic product in a
transaction that is not a "retail sale" as defined by
Revenue and Taxation Code �6007.
COMMENTS :
SB 1194
Page 3
1) Purpose of Bill . According to the author, "California has
varied existing environmental requirements for manufacturers
of plastic products?Though California has recyclability or
manufacturing requirements for specified plastic products,
not all manufacturers of plastic products sold in California
are required to meet the same
sustainability/recyclability/environmentally beneficial
requirements?[T]his bill does not require manufacturers of
plastic products to meet any specified manufacturing
requirement or mandate that the manufacturer have a policy
for manufacturing in a more environmentally sustainable way.
But, by requiring manufacturers to make information
publically available, California consumers, policy makers,
and anyone interested will have access to information about
the manufacturer's efforts to produce more environmentally
sustainable products and make more informed purchasing
decisions and policy decisions."
2) Too Vague and Many Questions . Although the general intent
of SB 1194 is laudable, the language in this bill is vague
and creates much uncertainty.
a) Manufacturers . SB 1194 defines "manufacturer" as "a
person who manufactures plastic products for sale in this
state and whose annual aggregate proceeds is not less
than $1 million."
i) "In this state" . The language is unclear and
needs clarification as to whether the manufacturer
has to be located in this state or the plastic
product is required to be sold in this state. If
the product sold is what is required to be "in this
state," how is oversight and enforcement expected to
occur for manufacturers located outside of
California and outside of this country?
ii) "Aggregate proceeds" . It is unclear what is
meant by "aggregate proceeds". Does the author
intend to mean aggregate gross proceeds or perhaps
aggregate net proceeds? Or aggregate cash proceeds?
This term needs further specification in order to
know who is subject to the requirements of this
SB 1194
Page 4
bill.
iii) What Percentage of Products ? What if the
manufacturer produces many products, of which only a
small portion is plastic, but whose aggregate
[gross, net, or cash] proceeds are more than $1
million - is such a manufacturer required to adhere
to the provisions of this bill? What percentage of
the products manufactured is expected to be plastic
in order to fall under the purview of this bill?
b) "Plastic Product" . Current law defines a "plastic
product" as
product made of plastic, alone or in combination with other
material. A question arises as to whether the author
intends this definition to apply to SB 1194. How much of
an individual product must be made of plastic in order to
be considered a "plastic product" for purposes of this
bill? For example, a stuffed teddy bear may be made
almost entirely of fabric but has plastic eyes sewn on.
Is the producer of this teddy bear considered a
manufacturer? Or is the producer of the plastic eyes
that are sewn onto the teddy bear solely considered a
"manufacturer"?
Another example is various food products have packaging made
of a combination of materials. Some soups are packaged
in a paper-based box that has a plastic opening. Milk
sometimes is contained in glass bottles that have plastic
screw-on caps. Some cereals are packaged in plastic
bags. Are any of these food products considered a
"plastic product" since a component of the item being
sold is plastic?
It is unclear whether current law's definition of "plastic
product" matches the intent of SB 1194.
c) Sustainability Policy and Goals . SB 1194 requires the
information, that a manufacturer is to provide in a
report on a website or in a shareholders' annual report,
includes: i) whether the manufacturer has adopted a
sustainability policy and the elements of that policy;
ii) whether the manufacturer has established goals to
SB 1194
Page 5
reuse, recover, and reduce the use of plastics in its
products and a description of those goals; and, iii) the
manufacturer's progress in meeting those goals if the
goals are part of its sustainability policy.
i) Sustainability . According to the United
States Environmental Protection Agency (US EPA),
"Sustainability has emerged as a result of
significant concerns about the unintended social,
environmental, and economic consequences of rapid
population growth, economic growth and consumption
of our natural resources." The US EPA further
states, "sustainability is based on a simple
principle: Everything that we need for our survival
and well-being depends, either directly or
indirectly, on our natural environment.
Sustainability creates and maintains the conditions
under which humans and nature can exist in
productive harmony, that permit fulfilling the
social, economic and other requirements of present
and future generations. Sustainability is important
to making sure we have and will continue to have,
the water, materials, and resources to protect human
health and our environment."
ii) Sustainability Policy . A sustainability
policy is a documented commitment to addressing
sustainability in a business. It is a statement of
intent that can be used to communicate to staff and
customers a commitment to improving environmental
and social sustainability over time.
As commendable as this may seem, a sustainability policy
can be as simplistic as one sentence stating that
Company X will do what it can to be greener. And
that's it. There are no legal requirements for a
company to have a sustainability policy that states
anything of real significance, meaning, or
consequence. A concern raised by this bill is
whether it provides an excuse for some companies to
tout a false sense of green goodness without
actually doing anything that improves environmental
and social responsibility.
SB 1194
Page 6
iii) Goals to Reuse, Recover, and Reduce the Use of
Plastics . SB 1194 states that if the goals related
to plastics are part of the company's sustainability
policy, then it must report its progress on meeting
those goals. However, if the goals are separate
from the sustainability policy, then there is no
mandate to report the company's progress on meeting
those goals. Why does reporting on progress in
meeting goals hinge on whether the goals are
included in the sustainability policy? Would it be
prudent to report on any progress regardless of
whether the goals are located in the sustainability
policy? In addition, what is the metric for
measuring progress?
A concern raised is that the requirements of this bill
may discourage companies from having a meaningful
sustainability policy or goals related to plastics. The
more general and vague the sustainability policy is, the
easier it is to fulfill SB 1194's requirements. The bill
basically says that if a company voluntarily has a
sustainability policy and/or goals to reuse, recover, and
reduce the use of plastics, then the state is going to
place mandates on the company for that voluntary action.
This bill is in a chapter of the Public Resources Code
that imposes a civil liability of $500 for the first
violation, $1,000 for the second violation, and $2,000
for the third and any subsequent violation. Why would a
company willingly place extra burdens on itself and
subject itself to potential liability and penalties if it
can avoid them altogether by simply not having a
sustainability policy or specified goals related to
plastics?
d) Lack of Oversight . This bill does not provide any
governmental oversight that would ensure that
manufacturers meet the requirements of this bill. It
would be prudent to provide checks and balances and
specify the governmental agency expected to oversee these
requirements and how that would be accomplished.
SB 1194
Page 7
e) Providing Information to the Public . This bill
requires specified information be in a report that is
posted on an Internet Web site. Another option provided
for a manufacturer, which is a California-incorporated
corporation, an out-of-state corporation that is
headquartered in California or customarily hold their
board meetings in California and that has 100 or more
shareholders, is to include the specified information as
part of a the company's annual shareholders' report.
i) By having the information "in a report that is
posted on a website," questions arise: Any report?
Any website? Even a report and/or website not
connected to the manufacturer? Such vague direction
could lead to several unintended ways a manufacturer
may fulfill the requirements, although not the
spirit, of this bill.
ii) By providing the option of placing the
specified information in a manufacturer's annual
report to shareholders, a question arises as to how
available that information really is to the public.
Is a shareholders' annual report of a privately
owned company readily available to the public?
Also, does allowing the information to be in a
shareholders' report only if the company is
California-based seem fair?
3) Previous Legislation . AB 521 (Stone) (2013) establishes a
product stewardship program for plastic products that pose a
significant risk to the marine environment. AB 521 died in
Assembly Appropriations Committee.
AB 837 (Nestande), Chapter 525, Statutes of 2012, required a
manufacturer or supplier making an environmental marketing
claim relating to the recycled content of a plastic food
container product, as defined, to maintain certain
information and documentation in support of that claim. AB
837 required a manufacturer or supplier to furnish this
information to any member of the public upon request or to
provide the information and documentation by furnishing a
link to a document on its Internet Web site. AB 837 repeals
these requirements on January 1, 2018.
SB 1194
Page 8
SB 567 (DeSaulnier), Chapter 594, Statutes of 2011, created
the Plastic Products Law under the California Integrated
Waste Management Act of 1989, to prohibit a plastic product
from being sold that is labeled "compostable," "home
compostable," or "marine biodegradable" unless the plastic
meets certain ASTM standards or another standard that is
subject to CalRecycle requirements.
SB 228 (DeSaulnier), Chapter 406, Statutes of 2010, required
a compostable plastic bag manufacturer meeting certain
standards to ensure that the compostable plastic bag is
"readily and easily identifiable" (as defined in this bill)
from other plastic bags, in a manner that is consistent with
the Federal Trade Commission Guides for the Use of
Environmental Marketing Claims.
SB 1454 (DeSaulnier) of 2010 was similar to SB 567, but was
vetoed by Governor Schwarzenegger.
AB 2071 (Karnette) Chapter 570, Statutes of 2008, set
penalties for violations of the SB 1749 (2004) plastic bag
requirements and the AB 2147 (2006) food and beverage
container requirements.
AB 1972 (DeSaulnier) Chapter 436, Statutes of 2008, revised
prohibited actions under the plastic bag, as well as the
food and beverage container, requirements, while revising
definitions and providing for review of changing ASTM
standards.
AB 2147 (Harman) Chapter 349, Statutes of 2006, prohibited
persons from selling plastic food and beverage containers
labeled as "compostable," "biodegradable," "degradable," or
any form of those terms, unless the containers meet certain
requirements.
SB 1749 (Karnette) Chapter 619, Statutes of 2004, prohibited
persons from selling a plastic bag labeled as "compostable,"
"biodegradable," "degradable," or any form of those terms,
unless the plastic bag meets certain requirements. AB 1023
(DeSaulnier) Chapter 143, Statutes of 2007, exempted these
bags from the Plastic Trash Bag Law.
SB 1194
Page 9
SOURCE : Author
SUPPORT : None on file
OPPOSITION : None on file