California Assembly Bill AB2398 Amended / Bill

 BILL NUMBER: AB 2398AMENDED BILL TEXT AMENDED IN SENATE AUGUST 17, 2010 AMENDED IN SENATE JUNE 23, 2010 AMENDED IN ASSEMBLY MAY 28, 2010 AMENDED IN ASSEMBLY APRIL 14, 2010 INTRODUCED BY Assembly Member John A. Perez FEBRUARY 19, 2010  An act to amend Section 12209 of the Public Contract Code, and to   An act to  add Chapter 20 (commencing with Section 42970) to Part 3 of Division 30 of  , and to repeal Section 42980 of,  the Public Resources Code, relating to recycling. LEGISLATIVE COUNSEL'S DIGEST AB 2398, as amended, John A. Perez. Product  stewardship: carpet: public procurement.   stewardship: carpet.  (1) The California Integrated Waste Management Act of 1989, administered by the Department of Resources Recycling and Recovery, is required to reduce, recycle, and reuse solid waste generated in the state to the maximum extent feasible in an efficient cost-effective manner to conserve water, energy, and other natural resources. The bill would require, by September 30, 2011, a manufacturer of carpets sold in this state, individually or through a carpet stewardship organization, to submit a carpet stewardship plan to the department, which would be required to include specified elements, including a funding mechanism that provides sufficient funding to carry out the plan, including administrative, operational, and capital costs of the plan. The  department   bill would require the funding mechanism   to provide for a carpet stewardship assessment per unit of carpet sold by a manufacturer, to be paid by each member of the carpet stewardship organization on and after January 1, 2013.   The bill would require, until January 1, 2013, the Carpet America Recovery Effort (CARE), a 3rd-party nonprofit stewardship organization established by the Carpet and Rug Institute, to serve as the carpet stewardship organization and would allow, on and after January 1, 2013, a carpet stewardship organization appointed by one or more manufacturers to submit a plan.   The bill would require, as of April 1, 2011, until January 1, 2013, a manufacturer of carpet to add an assessment of $0.05 per square yard upon the purchase price of all carpet sold in the state by that manufacturer. The bill would require the assessment to be remitted on a quarterly basis, as appropriate, to CARE or would allow the manufacturer to retain that assessment. The bill would require these revenues to be expended by CARE or by an individual manufacturer, prior to approval of its carpet stewardship plan, only to implement early action measures that are consistent to achieve measurable improvements in the landfill diversion and recycling of postconsumer carpet.   The department  would be required to, among other things, within 60 days after the department receives a plan, review and determine whether the plan  is complete  complies with the bill's requirements  and notify the submitter of its  determination   decision  . The bill would specify that any plan not  determined to be complete   approved  by March 31, 2012, is out of compliance until determined to be complete by the department. The bill would  prohibit   provide that  a manufacturer, wholesaler, or retailer, on and after April 1, 2012,  from selling a   that offers  carpet  unless the   for sale or promotional purposes without an approved  plan for that carpet is  not  in compliance with the act's requirements. The act would also require the carpet stewardship organization to  meet specified targets   demonstrate to the department that it has achieved continuous meaningful improvement in the recycling rate  in order to be in compliance. Each manufacturer of carpet sold in the state, individually or through a carpet stewardship organization, would be required to prepare and submit to the department an annual report describing the activities carried out pursuant to the carpet stewardship plan. A manufacturer or carpet stewardship organization submitting a carpet stewardship plan would be required to pay the department an annual administrative fee when submitting the plan for review and approval, as determined by the department. The bill would provide for the imposition of administrative civil penalties upon a person who  sells carpet in violation of   violates  the bill  and would provide that the manufacturer or carpet stewardship organization whose plan is not approved by the department by March 31, 2012   ,   is subject to those penalties until the plan is approved. The department would be authorized to expend those fees and penalties, upon appropriation by the Legislature, to administer the bill's provisions  .  (2) Existing law provides various procedures and requirements pertaining to the purchase of recycled items by the state, including, among other things, recycled paper products, plastic products, metal products, and paint.   This bill would additionally provide requirements for the purchase of carpet.   The bill would require the department and the Department of General Services to complete a study, by January 1, 2014, that examines the standard for carpet purchases by the state, in the NSF/ANSI 140-2007 Standard, Platinum Level, and to submit the study to the Governor and the Legislature, including recommendations for any appropriate changes to that standard.   (2) Existing law requires the Department of Toxic Substances Control to adopt regulations to establish a process to identify and prioritize chemicals or chemical ingredients in consumer products that may be considered as being a chemical of concern, as prescribed, and to establish a process for evaluating chemicals of concern in consumer products, and their potential alternatives, to determine how best to limit exposure or to reduce the level of hazard posed by a chemical of concern.   This bill would require the Department of Toxic Substances Control to fully consider the measures taken by the carpet industry pursuant to the program established by the bill, and the results of those measures, when considering whether to include carpet in the product registry adopted under those provisions or to otherwise regulate carpet pursuant to those provisions.  Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   The Legislature finds and declares all of the following:   (a) Discarded carpet is one of the 10 most prevalent waste materials in California landfills, equaling 3.2 percent of waste by volume disposed of in California in 2008. Because carpet is heavy and bulky, it imposes a significant solid waste management cost on local governments.   (b) Numerous products can be manufactured from recycled carpets, including carpet, carpet underlayment, automobile parts, picnic tables, park benches, and erosion control products. Several carpet recycling facilities currently operate in California, producing products and feedstock for products made from recycled carpet.   (c) The United States carpet industry has established a third-party nonprofit organization, the Carpet America Recovery Effort, also known as CARE, to increase the recycling and reuse of postconsumer carpet and reduce the amount of carpet going to landfills.   (d) CARE represents at least 90 percent of United States carpet manufacturers and 95 percent of the volume of carpet sold in the United States.   (e) According to CARE, in 2008, the most recent year for which data are available, 5.2 percent of carpet was diverted from landfills and 4.3 percent was recycled.   (f) It is in the interest of the state to establish a program, working to the extent feasible with the carpet industry, to increase the landfill diversion and recycling of postconsumer carpet generated in California.   SEC. 2.   Chapter 20 (commencing with Section 42970) is added to Part 3 of Division 30 of the  Public Resources Code   , to read:   CHAPTER 20. PRODUCT STEWARDSHIP FOR CARPETS 42970. The purpose of this chapter is to increase the amount of postconsumer carpet that is diverted from landfills and recycled into secondary products or otherwise managed in a manner that is consistent with the state's hierarchy for waste management practices pursuant to Section 40051. 42971. For purposes of this chapter, and unless the context otherwise requires, the definitions in this section govern the construction of this chapter: (a) "Brand" means a name, symbol, word, or mark that identifies the carpet, rather than its components, and attributes the carpet to the owner or licensee of the brand as the manufacturer. (b) "CARE" means the Carpet America Recovery Effort, a third-party nonprofit stewardship organization established by the Carpet and Rug Institute to increase the reclamation and stewardship of postconsumer carpet. (c) (1) "Carpet" means a manufactured article that is used in commercial or residential buildings affixed or placed on the floor or building walking surface as a decorative or functional building interior feature and that is primarily constructed of a top visible surface of synthetic face fibers or yarns or tufts attached to a backing system derived from synthetic or natural materials. (2) "Carpet" includes, but is not limited to, a commercial or a residential broadloom carpet or modular carpet tiles. (3) "Carpet" does not include a rug, pad, cushion, or underlayment used in conjunction with, or separately from, a carpet. (d) (1) "Carpet stewardship organization" or "organization" means either of the following: (A) An organization appointed by one or more manufacturers to act as an agent on behalf of the manufacturer to design, submit, and administer a carpet stewardship plan pursuant to this chapter. (B) A carpet manufacturer that complies with this chapter as an individual manufacturer. (2) Notwithstanding paragraph (1), until January 1, 2013, CARE shall be the sole carpet stewardship organization pursuant to subparagraph (A) of paragraph (1). This paragraph does not restrict the option of an individual carpet manufacturer to comply with this chapter as a carpet stewardship organization, on and after January 1, 2011, pursuant to subparagraph (B) of paragraph (1). (e) "Carpet stewardship plan" or "plan" means a plan written by an individual manufacturer or a carpet stewardship organization, on behalf of one or more manufacturers, that includes all of the information required by Section 42972. (f) "Consumer" means a purchaser or owner of carpet, including a person, business, corporation, limited partnership, nonprofit organization, or governmental entity. (g) "Department" means the Department of Resources Recycling and Recovery. (h) "Label" means a graphic representation of three chasing arrows with a carpet roll inside the arrows, or an alternative design, designed by CARE and approved by the department for use on all invoices and contracts pursuant to subparagraph (C) of paragraph (3) of subdivision (c) of Section 42972. (i) "Manufacturer" means, with regard to a carpet that is sold, offered for sale, or distributed in the state any of the following: (1) The person who manufactures the carpet and who sells, offers for sale, or distributes that carpet in the state under that person's own name or brand. (2) If there is no person who sells, offers for sale, or distributes the carpet in the state under the person's own name or brand, the manufacturer of the carpet is the owner or licensee of a trademark or brand under which the carpet is sold or distributed in the state, whether or not the trademark is registered. (3) If there is no person who is a manufacturer of the carpet for the purpose of paragraphs (1) and (2), the manufacturer of that carpet is the person who imports the carpet into the state for sale or distribution. (j) "Postconsumer carpet" means carpet that is no longer used for its manufactured purpose. (k) "Program" means the system for the collection, transportation, recycling, and disposal of carpets pursuant to a completed carpet stewardship plan that is financed and managed or provided by an individual manufacturer or collectively by one or more manufacturers. (l) "Recycling" means the process, consistent with Section 40180, of converting postconsumer carpet into a useful product that meets the quality standards necessary to be used in the marketplace. (m) "Retailer" means a person who offers new carpet in a retail sale, as defined in Section 6007 of the Revenue and Taxation Code, including a retail sale through any means, including remote offerings such as sales outlets, catalogs, or an Internet Web site or other similar electronic means. (n) "Sell" or "sales" means a transfer of title of a carpet for consideration, including a remote sale conducted through a sales outlet, catalog, Internet Web site or similar electronic means, but does not include a lease. (o) "Wholesaler" means a person who offers new carpet for sale in this state in a sale that is not a retail sale, as defined in Section 6007 of the Revenue and Taxation Code, and in which the carpet is intended to be resold. 42972. (a) On or before September 30, 2011, a manufacturer of carpets sold in this state shall, individually or through a carpet stewardship organization, submit a carpet stewardship plan to the department that will do all of the following: (1) Achieve the purposes of this chapter, as described in Section 42970, and meet the requirements of Section 42975. (2) Include goals that, to the extent feasible based on available technology and information, increase the recycling of postconsumer carpet by increasing the diversion of postconsumer carpets from landfills, increasing the recyclability of carpets, and incentivizing the market growth of secondary products made from postconsumer carpet. The goals established in the plan shall, at a minimum, be equal to the goals established in a national memorandum of understanding for carpet stewardship, if one exists at the time the plan is submitted to the department. (3) Describe measures that will be taken to manage postconsumer carpet in a manner consistent with the state's solid waste management hierarchy, including, but not limited to, source reduction, source separation and processing to segregate and recover recyclable materials, and environmentally safe management of materials that cannot feasibly be recycled. (4) Include a funding mechanism, consistent with subdivision (c), that provides sufficient funding to carry out the plan, including the administrative, operational, and capital costs of the plan. (5) Include education and outreach efforts to consumers, carpet installation contractors, and retailers to promote their participation in achieving the purposes of the carpet stewardship plan as described in paragraph (1). These education and outreach materials may include, but are not limited to, any of the following: (A) Signage that is prominently displayed and easily visible to the consumer. (B) Written materials and templates of materials for reproduction by retailers to be provided to carpet installation contractors and consumers at the time of purchase or delivery or both. (C) Promotional materials or activities, or both, that explain the purpose of carpet stewardship and the means by which it is being carried out. (b) The plan prepared pursuant to this section shall be designed to accept and manage all suitable postconsumer carpet, regardless of polymer type or primary materials of construction. (c) (1) The funding mechanism required pursuant to paragraph (4) of subdivision (a) shall provide for a carpet stewardship assessment per unit of carpet sold by a manufacturer in the state, as determined in the plan, to be paid by each member of the carpet stewardship organization on and after January 1, 2013, in an amount that cumulatively will adequately fund the plan. The assessment shall be remitted to the carpet stewardship organization on a quarterly basis and the carpet stewardship organization may expend the assessment only to carry out the plan. (2) The amount of the assessment and the anticipated revenues from the assessment shall be specified in the plan and shall be approved by the department as part of the plan. The assessment shall be sufficient to meet, but not exceed, the anticipated cost of carrying out the plan. The assessment shall not be used competitively by the carpet stewardship organization or an individual manufacturer. (3) The assessment established pursuant to this subdivision and Section 42972.5 is exempt from the taxes imposed by Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code and shall meet both of the following requirements: (A) The assessment shall be added by a manufacturer to the purchase price of all carpet covered by the plan that is sold to a retailer or a wholesaler or otherwise sold for use in the state. (B) The assessment shall be clearly visible on all invoices and contracts as a separate line item and shall be accompanied by a label approved by the department. (d) A carpet stewardship organization that submits a plan pursuant to this section shall consult with retailers and wholesalers in the development of the plan, in order to minimize the impacts of the plan on retailers and wholesalers. 42972.5. (a) Notwithstanding Section 42972, on and after April 1, 2011, but not on or after January 1, 2013, a manufacturer of carpet shall add a carpet stewardship assessment of five cents ($0.05) per square yard to the purchase price of all carpet sold in the state by that manufacturer. The assessment added pursuant to this subdivision shall be remitted on a quarterly basis, as appropriate, to CARE or be retained by the individual manufacturer referred to in subparagraph (B) of paragraph (1) of subdivision (d) of Section 42971, for expenditure pursuant to subdivision (b). (b) Revenues derived from the assessment imposed pursuant to subdivision (a) shall only be expended by CARE or by an individual manufacturer, prior to approval of its carpet stewardship plan, to implement early action measures that are consistent with the purposes of this chapter and that are designed to achieve measurable improvements in the landfill diversion and recycling of postconsumer carpet. 42973. (a) (1) Within 60 days after the department receives a plan submitted pursuant to Section 42972, it shall review the plan, determine whether it complies with Section 42972, and notify the submitter of its decision to approve or not approve the plan. (2) On or after January 1, 2013, an organization appointed by one or more manufacturers to act as an agent on behalf of the manufacturer to design, submit, and administer a carpet stewardship plan pursuant to this chapter may submit a plan to the department pursuant to Section 42972 and that plan may be approved by the department, subject to the requirements of paragraph (1), only if the department makes both of the following findings: (A) The plan will not have the effect of reducing the level of diversion and recycling of postconsumer carpet that has been achieved pursuant to this chapter at the time the department reviews the plan. (B) The funding mechanism in the plan will not create an unfair advantage in the marketplace for one or more of the companies in the organization. (b) If the department does not approve the plan, it shall describe the reasons for its disapproval in the notice. The submitter may revise and resubmit the plan within 60 days after receiving notice of disapproval and the department shall review and approve or not approve the revised plan within 60 days after receipt. Any plan not approved by March 31, 2012, shall be out of compliance with this chapter and the submitter of the plan is subject to the penalties specified in Section 42978 until the plan is approved by the department. 42974. (a) (1) The department shall enforce this chapter. (2) In enforcing this chapter, the department shall, as part of this enforcement authority, review the annual report prepared pursuant to Section 42976 and within 90 days of receipt, determine whether the submitter of the plan is in compliance with this chapter. (b) On and after April 1, 2012, a manufacturer, wholesaler, or retailer that offers a carpet for sale in this state, or who offers a carpet for promotional purposes in this state, is not in compliance with this chapter and is subject to penalties pursuant to Section 42978, if the carpet is not subject to a plan that is submitted by an organization that includes the manufacturer of that carpet, which plan has been approved by the department pursuant to Section 42973. 42975. (a) In order to achieve compliance with this chapter, a carpet stewardship organization shall, on or before July 1, 2013, and annually thereafter, demonstrate to the department that it has achieved continuous meaningful improvement in the rate of recycling of postconsumer carpet subject to its stewardship plan. In determining compliance, the department shall consider all of the following: (1) The baseline rate of compliance against which the demonstrated improvement is compared. (2) The goals included in the organization's plan pursuant to paragraph (2) of subdivision (a) of Section 42972. (3) The goals included in a national memorandum of understanding for carpet stewardship. (4) Information provided in the organization's report to the department pursuant to Section 42976. (b) The percentage of carpet that has been recycled shall be calculated by a method adopted by the department after consulting with carpet stewardship organizations and taking into account the information provided to the department in its annual report pursuant to Section 42976. (c) If more than one organization submits a carpet stewardship plan pursuant to this chapter, the department shall use information submitted by the organization in its annual report pursuant to Section 42976 to determine the recycling rate attributable to each organization and shall determine compliance with this chapter in accordance with that plan's recycling rate. 42976. On or before July 1, 2013, and each year thereafter, a manufacturer of carpet sold in the state shall, individually or through a carpet stewardship organization, submit to the department a report describing its activities to achieve the purposes of this chapter, as described in Section 42970, and to comply with Section 42975. At a minimum, the report shall include all of the following: (a) The total volume of carpet sold by square yards and weight, in the state during the reporting period. (b) The total volume of postconsumer carpet recycled, by weight, in the state during the reporting period. (c) The total volume of postconsumer carpet recovered but not recycled, by weight, and its ultimate disposition. (d) The total cost of implementing the carpet stewardship program and other elements of the carpet stewardship plan. (e) An evaluation of the effectiveness of the program, its funding mechanism, and other elements of the plan, and anticipated steps, if needed, to improve performance. (f) Examples of educational materials that were provided to consumers during the reporting period. 42977. (a) The carpet stewardship organization submitting a carpet stewardship plan shall pay the department an annual administrative fee. The department shall set the fee at an amount that, when paid by every carpet stewardship organization that submits a carpet stewardship plan, is adequate to cover the department's full costs of administering and enforcing this chapter, including any program development costs or regulatory costs incurred by the department prior to carpet stewardship plans being submitted. The department may establish a variable fee based on relevant factors, including, but not limited to, the portion of carpets sold in the state by members of the organization compared to the total amount of carpet sold in the state by all organizations submitting a carpet stewardship plan. (b) The total amount of annual fees collected pursuant to this section shall not exceed the amount necessary to recover costs incurred by the department in connection with the administration and enforcement of the requirements of this chapter. The department may expend those annual fees, upon appropriation by the Legislature, to recover those costs. 42978. (a) A civil penalty up to the following amounts may be administratively imposed by the department on any person who is in violation of any provision of this chapter: (1) One thousand dollars ($1,000) per day. (2) Ten thousand dollars ($10,000) per day if the violation is intentional, knowing, or negligent. (b) Any penalties collected by the department may be expended by the department, upon appropriation by the Legislature, to offset the cost of administering and enforcing this chapter. 42979. (a) This chapter does not limit, supersede, duplicate, or otherwise conflict with the authority of the Department of Toxic Substances Control under Section 25257.1 of the Health and Safety Code to fully implement Article 14 (commencing with Section 25251) of Chapter 6.5 of Division 20 of the Health and Safety Code, including the authority of the department to include a carpet in a product registry adopted pursuant to that article. (b) Notwithstanding subdivision (a), the Department of Toxic Substances Control shall fully consider the measures taken by the carpet industry pursuant to this chapter, and the results of those measures, when considering whether to include carpet in a product registry adopted pursuant to, or to otherwise regulate carpet pursuant to, Article 14 (commencing with Section 25251) of Chapter 6.5 of Division 20 of the Health and Safety Code. 42980. (a) On or before January 1, 2014, the department and the Department of General Services shall complete a study that examines the standard for carpet purchases by the state, as provided in the American National Standards Institute (NSF/ANSI) 140-2007 Standard, Platinum Level, as in effect on January 1, 2011, and shall submit the study to the Governor and the Legislature pursuant to Section 9795 of the Government Code, including recommendation for any appropriate changes to that standard. In examining the standard and recommending changes to the standard, the department and the Department of General Services shall consider all of the following: (1) Any changes to the standard that would further the purpose of this chapter. (2) Any changes to the standard that would improve the environmental sustainability of carpet purchased by the state. (3) The life-cycle impacts of proposed changes to the standard. (4) The impacts of the proposed changes to the standard on source reduction. (5) The impacts of the proposed changes to the standard on the recyclability of carpet. (6) Economic and technological barriers to the proposed changes to the standard. (b) The department and Department of General Services shall hold at least one workshop to receive comments from interested stakeholders prior to the completion of the study. (c) Pursuant to Section 10231.5 of the Government Code, this section is repealed on January 1, 2018.  All matter omitted in this version of the bill appears in the bill as amended in the Senate, June 23, 2010. (JR11)