CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 405Introduced by Assembly Member AddisFebruary 04, 2025 An act to add Section 38534 to, and to add Chapter 10 (commencing with Section 119500) to Part 15 of Division 104 of, the Health and Safety Code, relating to environmental accountability. LEGISLATIVE COUNSEL'S DIGESTAB 405, as introduced, Addis. Fashion Environmental Accountability Act of 2025.Existing law requires the State Air Resources Board, on or before July 1, 2025, to develop and adopt regulations requiring specified partnerships, corporations, limited liability companies, and other business entities with total annual revenues in excess of $1,000,000,000 and that do business in California, defined as reporting entities, to publicly disclose starting in 2026 or on a date to be determined by the state board, and annually thereafter, their scope 1 and scope 2 greenhouse gas emissions, as defined, and, starting in 2027 and annually thereafter, their scope 3 greenhouse gas emissions, as defined, for the reporting entitys prior fiscal year, as provided. Existing law prescribes additional duties on specific industries for a variety of purposes, including those that promote the public health, safety, and welfare relating to issues that are unique to that industry. Existing law, for example, requires any tanning device used by a tanning facility to comply with all applicable federal laws and regulations. This bill would enact the Fashion Environmental Accountability Act of 2025 and would require fashion sellers to carry out effective environmental due diligence, as provided. The bill would vest the Department of Toxic Substances Control with jurisdiction over fashion sellers environmental due diligence pertaining to chemical management and wastewaster testing. The bill would vest the state board with jurisdiction over a fashion sellers environmental due diligence pertaining to emissions of greenhouse gases. The bill would require a fashion seller, in carrying out its effective environmental due diligence, to comply with certain environmental guidelines that, at a minimum, require the fashion seller to, among other things, embed responsible business conduct in its policies and management systems, identify areas of significant risks of societal and ecological harms from its own activities and its supply chain relationships, identify, prioritize, and assess the significant potential and actual adverse impacts of those risks, and cease, prevent, or mitigate those risks, as provided. The bill would require a fashion seller, beginning July 1, 2027, and annually thereafter, to submit to the department and the state board an Environmental Due Diligence Report pertaining to the effective environmental due diligence performed by the fashion seller for the prior calendar year, as provided. The bill would require a fashion seller, in carrying out its environmental due diligence, to establish a quantitative baseline for their emissions of greenhouse gases and targets for reductions in the emissions of greenhouse gases in the near-term and long-term covering their scopes 1, 2, and 3 emissions, as provided. The bill would require a fashion seller to include in its Environmental Due Diligence Report certain information related to its greenhouse gas emissions. The bill would, by January 1, 2028, require a fashion seller, in carrying out its environmental due diligence, to, among other things, require all of its significant tier 2 dyeing, finishing, printing, and garment washing suppliers to sample and annually report to the fashion seller on wastewater chemical concentrations and water usage and to report the information provided by the suppliers in its Environmental Due Diligence Report. The bill would subject a fashion seller in violation of the act to a civil penalty of up to 2% of its annual revenue, and would authorize the department and the state board, as appropriate, to seek appropriate equitable remedies for a violation of the act. The bill would require the civil penalties collected to be deposited into the Fashion Environmental Remediation Fund, which the bill would establish in the General Fund. The bill would require that moneys in the fund, upon appropriation by the Legislature, are to be expended for purposes of implementing the act and one or more environmental benefit or environmental remediation projects that directly and verifiably benefit the communities directly impacted, to the extent practicable, at the location the injury has occurred.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. This act shall be known, and may be cited, as the Fashion Environmental Accountability Act of 2025.SEC. 2. Section 38534 is added to the Health and Safety Code, to read:38534. (a) For purposes of this section, unless otherwise stated, all terms used shall have the same meanings set forth in Section 38532 or Chapter 10 (commencing with Section 119500) of Part 15 of Division 104.(b) In carrying out its effective environmental due diligence under Chapter 10 (commencing with Section 119500) of Part 15 of Division 104, a fashion seller shall do all of the following:(1) (A) Establish a quantitative baseline for the fashion sellers emissions of greenhouse gases and targets for reductions in the emissions of greenhouse gases in the near-term and long-term covering the fashion sellers scopes 1, 2, and 3 emissions that align with, at a minimum, target validation criteria promulgated by the Science Based Targets initiative, a partnership of the United Nations Global Compact, the World Resources Institute, CDP, and the World Wide Fund for Nature.(B) For fashion sellers with a global revenue of over one billion dollars ($1,000,000,000), the absolute contraction approach for the reduction in emissions of greenhouse gases shall be used to calculate the scope 3 emissions.(2) Report, as a part of the Environmental Due Diligence Report required by Section 119513, both of the following:(A) Its compliance with the targets set pursuant to paragraph (1).(B) (i) Its greenhouse gas emissions inventory, including absolute figures, that conforms with the accounting and reporting requirements of the Greenhouse Gas Protocol Corporate Accounting and Reporting Standards, the Scope Two Guidance, and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard promulgated by the World Resources Institute and the World Business Council for Sustainable Development.(ii) The greenhouse gas emissions inventory shall be independently verified not less than once every two years.(c) (1) If a fashion seller fails to meet the targets set in paragraph (1) of subdivision (b), the fashion seller shall have 18 months to reduce their emissions of greenhouse gases to meet those targets and return to the necessary reduction pathway to meet those targets.(2) For a fashion seller with an annual revenue of over one billion dollars ($1,000,000,000), in nontarget years, the fashion seller is deemed to be in violation of this section if the absolute emissions of greenhouse gases reported pursuant to this section increase in five consecutive years.(d) (1) Notwithstanding Part 6 (commencing with Section 38580), this section shall be enforced pursuant to Article 3 (commencing with Section 119520) of Chapter 10 of Part 15 of Division 104.(2) A fashion seller is not subject to a civil penalty for a misstatement with regards to the scope 3 emissions disclosure if the disclosure is made with a reasonable basis and disclosed in good faith.(e) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.SEC. 3. Chapter 10 (commencing with Section 119500) is added to Part 15 of Division 104 of the Health and Safety Code, to read: CHAPTER 10. Fashion Sellers Article 1. General Provision119500. For purposes of this chapter, the following definitions shall apply:(a) Department means the Department of Toxic Substances Control.(b) Doing business in the state means engaging in transactions on a regular and continual basis within the state for financial or pecuniary gain or profit.(c) Environmental due diligence means the comprehensive process companies shall carry out to identify, cease, prevent, mitigate, account for, and remediate actual and potential adverse impacts to the environment in their own operations and in their supply chain, in compliance with, at a minimum, the standards outlined in the most recent Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises, and the most recent Organisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector. (d) Environmental Due Diligence Report means a document prepared by a fashion seller to communicate all relevant information concerning the existence, implementation, and outcomes of due diligence in order to comply with the requirements of this chapter, and to comply with any rules or regulations established pursuant to this chapter.(e) Fashion bag means flexible packaging made of textiles, leather or other animal products, woven material, or other similar materials intended for repeated use, including, when applicable, those produced as a private label.(f) Fashion goods means wearing apparel, footwear, or fashion bags.(g) Fashion seller means a business entity that does business in the state involving the sale of fashion goods in excess of one hundred million dollars ($100,000,000) in annual gross receipts. Fashion seller does not include fashion sellers that sell used fashion goods and does not include multibrand retailers, unless the total annual gross receipts of all of the private labels under the retailer exceeds one hundred million dollars ($100,000,000). (h) Footwear means any covering worn or intended to be worn on the foot, including, when applicable, those produced as a private label. (i) Fund means the Fashion Environmental Remediation Fund established pursuant to Section 119530.(j) (1) Gross receipts means the gross amounts realized on the sale or exchange of property, the performance of services, or the use of property or capital, including rents, royalties, interest, and dividends, in a transaction that produces business income. Amounts realized shall not be reduced by the cost of goods sold or the basis of property sold.(2) Gross receipts does not include the following:(A) Repayments, redemption, or maturity of the principal of a loan, mutual fund, or similar marketable instrument.(B) The principal amount received under a purchase agreement or other transaction properly characterized as a loan.(C) Proceeds from the issuance of the fashion sellers own stock.(D) Damages and other amounts received as a result of litigation.(E) Property acquired on behalf of another.(F) Tax refunds and other tax benefits received.(G) Pension reversions.(H) Contributions to capital.(I) Income from discharge of indebtedness.(J) Amounts realized from exchanges of inventory that are not recognized under Title 26 of the United States Code, or would not be recognized if the exchange occurred in the United States.(K) Amounts received from transactions in intangible assets held in connection with a treasury function of the taxpayers unitary business and the gross receipts and overall net gains from the maturity, redemption, sale, exchange, or other disposition of those assets.(L) Amounts received from hedging transactions involving intangible assets. A hedging transaction for this purpose means a transaction related to the taxpayers trading function involving futures and options transactions for the purpose of hedging price risks of the products or commodities consumed, produced, or sold by the taxpayer.(k) Independently verified means audited by a verification body accredited by the department or state board, as appropriate. (l) OECD means the Organisation for Economic Co-operation and Development.(m) Open data principles means data that can be freely used, reused, and redistributed by any person, that is findable or easily discoverable on an internet website or within a database, that is accessible or available in a machine-readable, convenient, modifiable form, that is published as a whole, complete dataset that is interoperable or able to be mixed with different data sets, and that is reusable or provided under an open license that permits reuse and redistribution, including the intermixing with other datasets.(n) Produced as a private label means produced under a name, label, or entity separate from the fashion seller, but that is sold by the fashion seller.(o) Risk-based approach means commensurate to the likelihood and severity of the harm. A risk-based approach includes, but is not limited to, prioritizing the order of action based on the likelihood and severity of harm, measured by the harms scale or gravity, scope, and irremediable character. (p) Significant supplier means suppliers representing 75 percent of fabric by volume.(q) State board means the State Air Resources Board.(r) Supply chain tiers means a four tier system consisting of the following:(1) Tier one means suppliers that produce finished goods for fashion sellers, including suppliers subcontractors, that provide services, including, but not limited to, sewing and embroidering.(2) Tier two means suppliers to tier one, including subcontractors, that provide services, including, but not limited to, knitting, weaving, washing, dyeing, finishing, printing for finished goods, and components and materials for finished goods if they are stand-alone operations and not integrated into tier one suppliers. Components for this purpose means materials used to create a product, including, but not limited to, buttons, zippers, rubber soles, down, and fusibles.(3) Tier three means suppliers to tier two suppliers, including subcontractors, that process raw materials, such as spinning.(4) Tier four means companies, including subcontractors, that supply raw materials to tier three suppliers.(s) Wearing apparel means any costume or article of clothing worn or intended to be worn by individuals.119501. (a) The department shall have jurisdiction over a fashion sellers environmental due diligence under this chapter pertaining to chemical management and wastewater testing.(b) The state board shall have jurisdiction over a fashion sellers environmental due diligence under Section 38534 and this chapter pertaining to emissions of greenhouse gases.119502. (a) (1) The department and the state board, as appropriate, may, separately or jointly, prescribe regulations necessary or appropriate to carry out the purposes of Section 38534 and this chapter under their respective jurisdiction.(2) In developing the regulations, the department and the state board shall minimize duplication of efforts in the reporting requirement by authorizing the submission of a due diligence report that is prepared to meet other national or international reporting requirements as a means of compliance with Section 119513, if the due diligence report meets the requirements of this chapter.(b) The department and the state board, as appropriate, shall develop and disseminate education materials to fashion sellers, including providing alerts to time-sensitive issues, emerging issues, and high-risk country situations, and assist fashion sellers in improving the quality of their due diligence.119503. The department and the state board shall, separately or jointly, develop an application process for accrediting entities to act as independent verifiers for purposes of this chapter. The process shall include, at minimum, all of the following:(a) Consideration of the qualifications of the applicants verification staff, including, but not limited to, their education, experience, and professional licenses.(b) A requirement that the applicant employ five full-time staff with expertise in the requirements they seek to verify under this chapter.(c) Consideration of whether the applicant has policies and mechanisms in place to prevent conflicts-of-interest and to identify and resolve potential conflict of interest situations, if they arise. The department shall require the applicant to provide at least the following information to make this consideration:(1) Identification of the services to be provided by the applicant, the industries that the applicant serves, and the locations where those services are provided.(2) A detailed organizational chart that includes the applicant, its management structure, and any related entities.(3) The applicants internal conflict-of-interest policy that identifies activities and limits to monetary or nonmonetary gifts that applies to all employees and procedures to monitor conflicts of interest.(d) Prohibition of a verifying entity that is accredited by the department or the state board pursuant to this chapter from providing services to any entity where a conflict of interest exists. Conflicts of interest include, but are not limited to, the following:(1) The verifying entity and the fashion seller being reviewed share any management staff or board of directors.(2) The senior management staff of the fashion seller being reviewed was an employee of the verifying entity within the previous five years, or vice versa.(3) Any employee of the verifying entity or a subcontractor who is a member of the verifying entitys team for the review of the fashion seller has provided the fashion seller with services related to verification within the previous five years.(4) Any employee of the verifying entity provides any type of nonmonetary incentive to a fashion seller to secure a verification contract.(5) Any additional criteria determined by the department or the state board.(e) A requirement that a verifying entity notify the department or the state board, as appropriate, within 30 calendar days if it no longer meets the requirements to be a verifying entity set forth by this section or by regulations adopted by the department or the state board under this section. Article 2. Environmental Due Diligence119510. (a) Every fashion sellers shall carry out effective environmental due diligence, consistent with this chapter, for the portions of their business related to fashion goods, including, but not limited to, those items produced as a private label.(b) (1) Environmental due diligence required under this article shall include a fashion seller taking a risk-based approach and implementing good faith efforts to map suppliers as follows:(A) No later than January 1, 2027, tier one suppliers shall be disclosed, and contain at least 80 percent of suppliers by volume.(B) No later than January 1, 2028, tier two suppliers shall be disclosed, and contain at least 75 percent of suppliers by volume.(C) No later than January 1, 2030, tier three suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.(D) No later than January 1, 2032, tier four suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.(2) Supplier disclosure for all tiers shall include the name, address, parent company, and product type.119511. In carrying out its environmental due diligence under this article, a fashion seller shall comply with the environmental guidelines of OECDs Guidelines for Multinational Enterprises on Responsible Business Conduct and OECDs Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector that, at a minimum, require a fashion seller to do all of the following:(a) Embed responsible business conduct in the fashion sellers policies and management systems.(b) Identify areas of significant risks of societal and ecological harm from its own activities and its supply chain relationships.(c) Identify, prioritize, and assess the significant potential and actual adverse impacts of those risks.(d) Cease, prevent, or mitigate those risks, including, but not limited to, all of the following:(1) Taking actions specified in Sections 38534 and 119512.(2) Using responsible exit or disengagement strategies.(3) Consulting and engaging with impacted and potentially impacted stakeholders and rights holders and their representatives.(e) Tracking the implementation of activities to cease, prevent, and mitigate risks and the result of those activities.(f) Provision for, or cooperating in, the remediation of adverse environmental impacts resulting from the fashion sellers or its suppliers operation.119512. (a) (1) By January 1, 2028, in accordance with internationally recognized methodologies for chemical management and wastewater testing, a fashion seller shall require all of its significant tier 2 dyeing, finishing, printing, and garment washing suppliers to do all of the following: (A) Sample and annually report to the fashion seller on wastewater chemical concentrations and water usage.(B) Report on chemical inventory.(C) Provide evidence that the supplier is in compliance with local chemical management laws.(2) For a significant supplier that uses indirect wastewater management, a fashion seller shall report all of the following:(A) The chemical concentrations of the wastewater treatment facilities.(B) The percentage of significant suppliers that have a chemical remediation plan for wastewater in place.(C) Actions taken by the fashion seller to remediate wastewater.(b) On and after January 1, 2029, a fashion seller is deemed to be in violation of this section if its significant tier 2 dyeing, finishing, printing, and garment washing suppliers fail to make adequate progress in the remediation of hazardous chemical concentration in wastewater.(c) Reports required pursuant to this section shall be independently verified.(d) Information provided to the fashion seller pursuant to this section shall be reported as a part of its Environmental Due Diligence Report required by Section 119513.119513. (a) (1) Beginning July 1, 2027, and annually thereafter, a fashion seller shall develop and submit to the department and the state board an Environmental Due Diligence Report pertaining to the effective environmental due diligence performed by the fashion seller for the prior calendar year, including activities and financial expenditures to support supply chain environmental due diligence for review by the department and the state board, as appropriate. The report shall also include the fashion sellers annual volume of material produced including a breakdown by material type.(2) The information specified in the Environmental Due Diligence Report shall be independently verified before submission.(b) (1) The fashion seller shall make the Environmental Due Diligence Report available to the public on its internet website consistent with the open data principles contemporaneously with the submission of the report under subdivision (a).(2) If the fashion seller does not have an internet website, they shall provide a written disclosure within 30 days to any person that requests a copy of the Environmental Due Diligence Report.(c) The department and the state board shall review the Environmental Due Diligence Report under their respective jurisdiction for completeness. Article 3. Enforcement119520. (a) The department or the state board, as appropriate, shall identify and notify any fashion seller that fails to comply with Section 119513 and provide the noncompliant fashion seller with a 30-day grace period to file a complete Environmental Due Diligence Report as required by Section 119513.(b) If the fashion seller fails to file a complete Environmental Due Diligence Report within the time period specified in subdivision (a), the department or the state board, as appropriate, shall place the fashion seller on a publicly available list of noncompliant fashion sellers.(c) If the fashion seller fails to file a complete Environmental Due Diligence Report within three months of its due date, the department or the state board, as appropriate, may take an enforcement action pursuant to this article.119521. Except as provided in Section 119520, the department or state board, as appropriate, shall provide a notice of the noncompliance to a fashion seller that fails to comply with Section 38534 and this chapter and noncompliant fashion seller shall have three months from the date it receives the notice to meet the requirements of this chapter. 119522. (a) A fashion seller who violates this chapter shall be subject to a civil penalty of up to 2 percent of its annual revenues. Civil penalties collected pursuant to this section shall be deposited in the Fashion Environmental Remediation Fund.(b) In addition to subdivision (a), the department or the state board, as appropriate, may seek any appropriate equitable remedies for a violation of this chapter under their respective jurisdiction.119523. The department and the state board shall use a risk-based approach in enforcing this chapter and publish enforcement guidelines before the enforcement of this chapter. 119524. Any person may report a violation of this chapter to the department or the state board, as appropriate. Article 4. Fashion Environmental Remediation Fund119530. (a) The Fashion Environmental Remediation Fund is hereby established in the General Fund.(b) Moneys in the fund shall be available upon appropriation by the Legislature to the department or the state board for purposes of implementing this chapter and for purposes of implementing one or more environmental benefit projects or environmental remediation projects that directly and verifiably benefit communities directly impacted, to the extent feasible, at the location where the injury has occurred.(c) In addition to civil penalties specified in Section 119522, any other moneys appropriated by the Legislature for purposes of this chapter or for the implementation of environmental benefit projects shall be deposited in the fund. Article 5. Miscellaneous119535. The provisions of this chapter are severable. If any provision of this chapter or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 405Introduced by Assembly Member AddisFebruary 04, 2025 An act to add Section 38534 to, and to add Chapter 10 (commencing with Section 119500) to Part 15 of Division 104 of, the Health and Safety Code, relating to environmental accountability. LEGISLATIVE COUNSEL'S DIGESTAB 405, as introduced, Addis. Fashion Environmental Accountability Act of 2025.Existing law requires the State Air Resources Board, on or before July 1, 2025, to develop and adopt regulations requiring specified partnerships, corporations, limited liability companies, and other business entities with total annual revenues in excess of $1,000,000,000 and that do business in California, defined as reporting entities, to publicly disclose starting in 2026 or on a date to be determined by the state board, and annually thereafter, their scope 1 and scope 2 greenhouse gas emissions, as defined, and, starting in 2027 and annually thereafter, their scope 3 greenhouse gas emissions, as defined, for the reporting entitys prior fiscal year, as provided. Existing law prescribes additional duties on specific industries for a variety of purposes, including those that promote the public health, safety, and welfare relating to issues that are unique to that industry. Existing law, for example, requires any tanning device used by a tanning facility to comply with all applicable federal laws and regulations. This bill would enact the Fashion Environmental Accountability Act of 2025 and would require fashion sellers to carry out effective environmental due diligence, as provided. The bill would vest the Department of Toxic Substances Control with jurisdiction over fashion sellers environmental due diligence pertaining to chemical management and wastewaster testing. The bill would vest the state board with jurisdiction over a fashion sellers environmental due diligence pertaining to emissions of greenhouse gases. The bill would require a fashion seller, in carrying out its effective environmental due diligence, to comply with certain environmental guidelines that, at a minimum, require the fashion seller to, among other things, embed responsible business conduct in its policies and management systems, identify areas of significant risks of societal and ecological harms from its own activities and its supply chain relationships, identify, prioritize, and assess the significant potential and actual adverse impacts of those risks, and cease, prevent, or mitigate those risks, as provided. The bill would require a fashion seller, beginning July 1, 2027, and annually thereafter, to submit to the department and the state board an Environmental Due Diligence Report pertaining to the effective environmental due diligence performed by the fashion seller for the prior calendar year, as provided. The bill would require a fashion seller, in carrying out its environmental due diligence, to establish a quantitative baseline for their emissions of greenhouse gases and targets for reductions in the emissions of greenhouse gases in the near-term and long-term covering their scopes 1, 2, and 3 emissions, as provided. The bill would require a fashion seller to include in its Environmental Due Diligence Report certain information related to its greenhouse gas emissions. The bill would, by January 1, 2028, require a fashion seller, in carrying out its environmental due diligence, to, among other things, require all of its significant tier 2 dyeing, finishing, printing, and garment washing suppliers to sample and annually report to the fashion seller on wastewater chemical concentrations and water usage and to report the information provided by the suppliers in its Environmental Due Diligence Report. The bill would subject a fashion seller in violation of the act to a civil penalty of up to 2% of its annual revenue, and would authorize the department and the state board, as appropriate, to seek appropriate equitable remedies for a violation of the act. The bill would require the civil penalties collected to be deposited into the Fashion Environmental Remediation Fund, which the bill would establish in the General Fund. The bill would require that moneys in the fund, upon appropriation by the Legislature, are to be expended for purposes of implementing the act and one or more environmental benefit or environmental remediation projects that directly and verifiably benefit the communities directly impacted, to the extent practicable, at the location the injury has occurred.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION
Assembly Bill
No. 405
Introduced by Assembly Member AddisFebruary 04, 2025
Introduced by Assembly Member Addis
February 04, 2025
An act to add Section 38534 to, and to add Chapter 10 (commencing with Section 119500) to Part 15 of Division 104 of, the Health and Safety Code, relating to environmental accountability.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
AB 405, as introduced, Addis. Fashion Environmental Accountability Act of 2025.
Existing law requires the State Air Resources Board, on or before July 1, 2025, to develop and adopt regulations requiring specified partnerships, corporations, limited liability companies, and other business entities with total annual revenues in excess of $1,000,000,000 and that do business in California, defined as reporting entities, to publicly disclose starting in 2026 or on a date to be determined by the state board, and annually thereafter, their scope 1 and scope 2 greenhouse gas emissions, as defined, and, starting in 2027 and annually thereafter, their scope 3 greenhouse gas emissions, as defined, for the reporting entitys prior fiscal year, as provided. Existing law prescribes additional duties on specific industries for a variety of purposes, including those that promote the public health, safety, and welfare relating to issues that are unique to that industry. Existing law, for example, requires any tanning device used by a tanning facility to comply with all applicable federal laws and regulations. This bill would enact the Fashion Environmental Accountability Act of 2025 and would require fashion sellers to carry out effective environmental due diligence, as provided. The bill would vest the Department of Toxic Substances Control with jurisdiction over fashion sellers environmental due diligence pertaining to chemical management and wastewaster testing. The bill would vest the state board with jurisdiction over a fashion sellers environmental due diligence pertaining to emissions of greenhouse gases. The bill would require a fashion seller, in carrying out its effective environmental due diligence, to comply with certain environmental guidelines that, at a minimum, require the fashion seller to, among other things, embed responsible business conduct in its policies and management systems, identify areas of significant risks of societal and ecological harms from its own activities and its supply chain relationships, identify, prioritize, and assess the significant potential and actual adverse impacts of those risks, and cease, prevent, or mitigate those risks, as provided. The bill would require a fashion seller, beginning July 1, 2027, and annually thereafter, to submit to the department and the state board an Environmental Due Diligence Report pertaining to the effective environmental due diligence performed by the fashion seller for the prior calendar year, as provided. The bill would require a fashion seller, in carrying out its environmental due diligence, to establish a quantitative baseline for their emissions of greenhouse gases and targets for reductions in the emissions of greenhouse gases in the near-term and long-term covering their scopes 1, 2, and 3 emissions, as provided. The bill would require a fashion seller to include in its Environmental Due Diligence Report certain information related to its greenhouse gas emissions. The bill would, by January 1, 2028, require a fashion seller, in carrying out its environmental due diligence, to, among other things, require all of its significant tier 2 dyeing, finishing, printing, and garment washing suppliers to sample and annually report to the fashion seller on wastewater chemical concentrations and water usage and to report the information provided by the suppliers in its Environmental Due Diligence Report. The bill would subject a fashion seller in violation of the act to a civil penalty of up to 2% of its annual revenue, and would authorize the department and the state board, as appropriate, to seek appropriate equitable remedies for a violation of the act. The bill would require the civil penalties collected to be deposited into the Fashion Environmental Remediation Fund, which the bill would establish in the General Fund. The bill would require that moneys in the fund, upon appropriation by the Legislature, are to be expended for purposes of implementing the act and one or more environmental benefit or environmental remediation projects that directly and verifiably benefit the communities directly impacted, to the extent practicable, at the location the injury has occurred.
Existing law requires the State Air Resources Board, on or before July 1, 2025, to develop and adopt regulations requiring specified partnerships, corporations, limited liability companies, and other business entities with total annual revenues in excess of $1,000,000,000 and that do business in California, defined as reporting entities, to publicly disclose starting in 2026 or on a date to be determined by the state board, and annually thereafter, their scope 1 and scope 2 greenhouse gas emissions, as defined, and, starting in 2027 and annually thereafter, their scope 3 greenhouse gas emissions, as defined, for the reporting entitys prior fiscal year, as provided.
Existing law prescribes additional duties on specific industries for a variety of purposes, including those that promote the public health, safety, and welfare relating to issues that are unique to that industry. Existing law, for example, requires any tanning device used by a tanning facility to comply with all applicable federal laws and regulations.
This bill would enact the Fashion Environmental Accountability Act of 2025 and would require fashion sellers to carry out effective environmental due diligence, as provided. The bill would vest the Department of Toxic Substances Control with jurisdiction over fashion sellers environmental due diligence pertaining to chemical management and wastewaster testing. The bill would vest the state board with jurisdiction over a fashion sellers environmental due diligence pertaining to emissions of greenhouse gases. The bill would require a fashion seller, in carrying out its effective environmental due diligence, to comply with certain environmental guidelines that, at a minimum, require the fashion seller to, among other things, embed responsible business conduct in its policies and management systems, identify areas of significant risks of societal and ecological harms from its own activities and its supply chain relationships, identify, prioritize, and assess the significant potential and actual adverse impacts of those risks, and cease, prevent, or mitigate those risks, as provided. The bill would require a fashion seller, beginning July 1, 2027, and annually thereafter, to submit to the department and the state board an Environmental Due Diligence Report pertaining to the effective environmental due diligence performed by the fashion seller for the prior calendar year, as provided. The bill would require a fashion seller, in carrying out its environmental due diligence, to establish a quantitative baseline for their emissions of greenhouse gases and targets for reductions in the emissions of greenhouse gases in the near-term and long-term covering their scopes 1, 2, and 3 emissions, as provided. The bill would require a fashion seller to include in its Environmental Due Diligence Report certain information related to its greenhouse gas emissions. The bill would, by January 1, 2028, require a fashion seller, in carrying out its environmental due diligence, to, among other things, require all of its significant tier 2 dyeing, finishing, printing, and garment washing suppliers to sample and annually report to the fashion seller on wastewater chemical concentrations and water usage and to report the information provided by the suppliers in its Environmental Due Diligence Report. The bill would subject a fashion seller in violation of the act to a civil penalty of up to 2% of its annual revenue, and would authorize the department and the state board, as appropriate, to seek appropriate equitable remedies for a violation of the act. The bill would require the civil penalties collected to be deposited into the Fashion Environmental Remediation Fund, which the bill would establish in the General Fund. The bill would require that moneys in the fund, upon appropriation by the Legislature, are to be expended for purposes of implementing the act and one or more environmental benefit or environmental remediation projects that directly and verifiably benefit the communities directly impacted, to the extent practicable, at the location the injury has occurred.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. This act shall be known, and may be cited, as the Fashion Environmental Accountability Act of 2025.SEC. 2. Section 38534 is added to the Health and Safety Code, to read:38534. (a) For purposes of this section, unless otherwise stated, all terms used shall have the same meanings set forth in Section 38532 or Chapter 10 (commencing with Section 119500) of Part 15 of Division 104.(b) In carrying out its effective environmental due diligence under Chapter 10 (commencing with Section 119500) of Part 15 of Division 104, a fashion seller shall do all of the following:(1) (A) Establish a quantitative baseline for the fashion sellers emissions of greenhouse gases and targets for reductions in the emissions of greenhouse gases in the near-term and long-term covering the fashion sellers scopes 1, 2, and 3 emissions that align with, at a minimum, target validation criteria promulgated by the Science Based Targets initiative, a partnership of the United Nations Global Compact, the World Resources Institute, CDP, and the World Wide Fund for Nature.(B) For fashion sellers with a global revenue of over one billion dollars ($1,000,000,000), the absolute contraction approach for the reduction in emissions of greenhouse gases shall be used to calculate the scope 3 emissions.(2) Report, as a part of the Environmental Due Diligence Report required by Section 119513, both of the following:(A) Its compliance with the targets set pursuant to paragraph (1).(B) (i) Its greenhouse gas emissions inventory, including absolute figures, that conforms with the accounting and reporting requirements of the Greenhouse Gas Protocol Corporate Accounting and Reporting Standards, the Scope Two Guidance, and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard promulgated by the World Resources Institute and the World Business Council for Sustainable Development.(ii) The greenhouse gas emissions inventory shall be independently verified not less than once every two years.(c) (1) If a fashion seller fails to meet the targets set in paragraph (1) of subdivision (b), the fashion seller shall have 18 months to reduce their emissions of greenhouse gases to meet those targets and return to the necessary reduction pathway to meet those targets.(2) For a fashion seller with an annual revenue of over one billion dollars ($1,000,000,000), in nontarget years, the fashion seller is deemed to be in violation of this section if the absolute emissions of greenhouse gases reported pursuant to this section increase in five consecutive years.(d) (1) Notwithstanding Part 6 (commencing with Section 38580), this section shall be enforced pursuant to Article 3 (commencing with Section 119520) of Chapter 10 of Part 15 of Division 104.(2) A fashion seller is not subject to a civil penalty for a misstatement with regards to the scope 3 emissions disclosure if the disclosure is made with a reasonable basis and disclosed in good faith.(e) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.SEC. 3. Chapter 10 (commencing with Section 119500) is added to Part 15 of Division 104 of the Health and Safety Code, to read: CHAPTER 10. Fashion Sellers Article 1. General Provision119500. For purposes of this chapter, the following definitions shall apply:(a) Department means the Department of Toxic Substances Control.(b) Doing business in the state means engaging in transactions on a regular and continual basis within the state for financial or pecuniary gain or profit.(c) Environmental due diligence means the comprehensive process companies shall carry out to identify, cease, prevent, mitigate, account for, and remediate actual and potential adverse impacts to the environment in their own operations and in their supply chain, in compliance with, at a minimum, the standards outlined in the most recent Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises, and the most recent Organisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector. (d) Environmental Due Diligence Report means a document prepared by a fashion seller to communicate all relevant information concerning the existence, implementation, and outcomes of due diligence in order to comply with the requirements of this chapter, and to comply with any rules or regulations established pursuant to this chapter.(e) Fashion bag means flexible packaging made of textiles, leather or other animal products, woven material, or other similar materials intended for repeated use, including, when applicable, those produced as a private label.(f) Fashion goods means wearing apparel, footwear, or fashion bags.(g) Fashion seller means a business entity that does business in the state involving the sale of fashion goods in excess of one hundred million dollars ($100,000,000) in annual gross receipts. Fashion seller does not include fashion sellers that sell used fashion goods and does not include multibrand retailers, unless the total annual gross receipts of all of the private labels under the retailer exceeds one hundred million dollars ($100,000,000). (h) Footwear means any covering worn or intended to be worn on the foot, including, when applicable, those produced as a private label. (i) Fund means the Fashion Environmental Remediation Fund established pursuant to Section 119530.(j) (1) Gross receipts means the gross amounts realized on the sale or exchange of property, the performance of services, or the use of property or capital, including rents, royalties, interest, and dividends, in a transaction that produces business income. Amounts realized shall not be reduced by the cost of goods sold or the basis of property sold.(2) Gross receipts does not include the following:(A) Repayments, redemption, or maturity of the principal of a loan, mutual fund, or similar marketable instrument.(B) The principal amount received under a purchase agreement or other transaction properly characterized as a loan.(C) Proceeds from the issuance of the fashion sellers own stock.(D) Damages and other amounts received as a result of litigation.(E) Property acquired on behalf of another.(F) Tax refunds and other tax benefits received.(G) Pension reversions.(H) Contributions to capital.(I) Income from discharge of indebtedness.(J) Amounts realized from exchanges of inventory that are not recognized under Title 26 of the United States Code, or would not be recognized if the exchange occurred in the United States.(K) Amounts received from transactions in intangible assets held in connection with a treasury function of the taxpayers unitary business and the gross receipts and overall net gains from the maturity, redemption, sale, exchange, or other disposition of those assets.(L) Amounts received from hedging transactions involving intangible assets. A hedging transaction for this purpose means a transaction related to the taxpayers trading function involving futures and options transactions for the purpose of hedging price risks of the products or commodities consumed, produced, or sold by the taxpayer.(k) Independently verified means audited by a verification body accredited by the department or state board, as appropriate. (l) OECD means the Organisation for Economic Co-operation and Development.(m) Open data principles means data that can be freely used, reused, and redistributed by any person, that is findable or easily discoverable on an internet website or within a database, that is accessible or available in a machine-readable, convenient, modifiable form, that is published as a whole, complete dataset that is interoperable or able to be mixed with different data sets, and that is reusable or provided under an open license that permits reuse and redistribution, including the intermixing with other datasets.(n) Produced as a private label means produced under a name, label, or entity separate from the fashion seller, but that is sold by the fashion seller.(o) Risk-based approach means commensurate to the likelihood and severity of the harm. A risk-based approach includes, but is not limited to, prioritizing the order of action based on the likelihood and severity of harm, measured by the harms scale or gravity, scope, and irremediable character. (p) Significant supplier means suppliers representing 75 percent of fabric by volume.(q) State board means the State Air Resources Board.(r) Supply chain tiers means a four tier system consisting of the following:(1) Tier one means suppliers that produce finished goods for fashion sellers, including suppliers subcontractors, that provide services, including, but not limited to, sewing and embroidering.(2) Tier two means suppliers to tier one, including subcontractors, that provide services, including, but not limited to, knitting, weaving, washing, dyeing, finishing, printing for finished goods, and components and materials for finished goods if they are stand-alone operations and not integrated into tier one suppliers. Components for this purpose means materials used to create a product, including, but not limited to, buttons, zippers, rubber soles, down, and fusibles.(3) Tier three means suppliers to tier two suppliers, including subcontractors, that process raw materials, such as spinning.(4) Tier four means companies, including subcontractors, that supply raw materials to tier three suppliers.(s) Wearing apparel means any costume or article of clothing worn or intended to be worn by individuals.119501. (a) The department shall have jurisdiction over a fashion sellers environmental due diligence under this chapter pertaining to chemical management and wastewater testing.(b) The state board shall have jurisdiction over a fashion sellers environmental due diligence under Section 38534 and this chapter pertaining to emissions of greenhouse gases.119502. (a) (1) The department and the state board, as appropriate, may, separately or jointly, prescribe regulations necessary or appropriate to carry out the purposes of Section 38534 and this chapter under their respective jurisdiction.(2) In developing the regulations, the department and the state board shall minimize duplication of efforts in the reporting requirement by authorizing the submission of a due diligence report that is prepared to meet other national or international reporting requirements as a means of compliance with Section 119513, if the due diligence report meets the requirements of this chapter.(b) The department and the state board, as appropriate, shall develop and disseminate education materials to fashion sellers, including providing alerts to time-sensitive issues, emerging issues, and high-risk country situations, and assist fashion sellers in improving the quality of their due diligence.119503. The department and the state board shall, separately or jointly, develop an application process for accrediting entities to act as independent verifiers for purposes of this chapter. The process shall include, at minimum, all of the following:(a) Consideration of the qualifications of the applicants verification staff, including, but not limited to, their education, experience, and professional licenses.(b) A requirement that the applicant employ five full-time staff with expertise in the requirements they seek to verify under this chapter.(c) Consideration of whether the applicant has policies and mechanisms in place to prevent conflicts-of-interest and to identify and resolve potential conflict of interest situations, if they arise. The department shall require the applicant to provide at least the following information to make this consideration:(1) Identification of the services to be provided by the applicant, the industries that the applicant serves, and the locations where those services are provided.(2) A detailed organizational chart that includes the applicant, its management structure, and any related entities.(3) The applicants internal conflict-of-interest policy that identifies activities and limits to monetary or nonmonetary gifts that applies to all employees and procedures to monitor conflicts of interest.(d) Prohibition of a verifying entity that is accredited by the department or the state board pursuant to this chapter from providing services to any entity where a conflict of interest exists. Conflicts of interest include, but are not limited to, the following:(1) The verifying entity and the fashion seller being reviewed share any management staff or board of directors.(2) The senior management staff of the fashion seller being reviewed was an employee of the verifying entity within the previous five years, or vice versa.(3) Any employee of the verifying entity or a subcontractor who is a member of the verifying entitys team for the review of the fashion seller has provided the fashion seller with services related to verification within the previous five years.(4) Any employee of the verifying entity provides any type of nonmonetary incentive to a fashion seller to secure a verification contract.(5) Any additional criteria determined by the department or the state board.(e) A requirement that a verifying entity notify the department or the state board, as appropriate, within 30 calendar days if it no longer meets the requirements to be a verifying entity set forth by this section or by regulations adopted by the department or the state board under this section. Article 2. Environmental Due Diligence119510. (a) Every fashion sellers shall carry out effective environmental due diligence, consistent with this chapter, for the portions of their business related to fashion goods, including, but not limited to, those items produced as a private label.(b) (1) Environmental due diligence required under this article shall include a fashion seller taking a risk-based approach and implementing good faith efforts to map suppliers as follows:(A) No later than January 1, 2027, tier one suppliers shall be disclosed, and contain at least 80 percent of suppliers by volume.(B) No later than January 1, 2028, tier two suppliers shall be disclosed, and contain at least 75 percent of suppliers by volume.(C) No later than January 1, 2030, tier three suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.(D) No later than January 1, 2032, tier four suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.(2) Supplier disclosure for all tiers shall include the name, address, parent company, and product type.119511. In carrying out its environmental due diligence under this article, a fashion seller shall comply with the environmental guidelines of OECDs Guidelines for Multinational Enterprises on Responsible Business Conduct and OECDs Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector that, at a minimum, require a fashion seller to do all of the following:(a) Embed responsible business conduct in the fashion sellers policies and management systems.(b) Identify areas of significant risks of societal and ecological harm from its own activities and its supply chain relationships.(c) Identify, prioritize, and assess the significant potential and actual adverse impacts of those risks.(d) Cease, prevent, or mitigate those risks, including, but not limited to, all of the following:(1) Taking actions specified in Sections 38534 and 119512.(2) Using responsible exit or disengagement strategies.(3) Consulting and engaging with impacted and potentially impacted stakeholders and rights holders and their representatives.(e) Tracking the implementation of activities to cease, prevent, and mitigate risks and the result of those activities.(f) Provision for, or cooperating in, the remediation of adverse environmental impacts resulting from the fashion sellers or its suppliers operation.119512. (a) (1) By January 1, 2028, in accordance with internationally recognized methodologies for chemical management and wastewater testing, a fashion seller shall require all of its significant tier 2 dyeing, finishing, printing, and garment washing suppliers to do all of the following: (A) Sample and annually report to the fashion seller on wastewater chemical concentrations and water usage.(B) Report on chemical inventory.(C) Provide evidence that the supplier is in compliance with local chemical management laws.(2) For a significant supplier that uses indirect wastewater management, a fashion seller shall report all of the following:(A) The chemical concentrations of the wastewater treatment facilities.(B) The percentage of significant suppliers that have a chemical remediation plan for wastewater in place.(C) Actions taken by the fashion seller to remediate wastewater.(b) On and after January 1, 2029, a fashion seller is deemed to be in violation of this section if its significant tier 2 dyeing, finishing, printing, and garment washing suppliers fail to make adequate progress in the remediation of hazardous chemical concentration in wastewater.(c) Reports required pursuant to this section shall be independently verified.(d) Information provided to the fashion seller pursuant to this section shall be reported as a part of its Environmental Due Diligence Report required by Section 119513.119513. (a) (1) Beginning July 1, 2027, and annually thereafter, a fashion seller shall develop and submit to the department and the state board an Environmental Due Diligence Report pertaining to the effective environmental due diligence performed by the fashion seller for the prior calendar year, including activities and financial expenditures to support supply chain environmental due diligence for review by the department and the state board, as appropriate. The report shall also include the fashion sellers annual volume of material produced including a breakdown by material type.(2) The information specified in the Environmental Due Diligence Report shall be independently verified before submission.(b) (1) The fashion seller shall make the Environmental Due Diligence Report available to the public on its internet website consistent with the open data principles contemporaneously with the submission of the report under subdivision (a).(2) If the fashion seller does not have an internet website, they shall provide a written disclosure within 30 days to any person that requests a copy of the Environmental Due Diligence Report.(c) The department and the state board shall review the Environmental Due Diligence Report under their respective jurisdiction for completeness. Article 3. Enforcement119520. (a) The department or the state board, as appropriate, shall identify and notify any fashion seller that fails to comply with Section 119513 and provide the noncompliant fashion seller with a 30-day grace period to file a complete Environmental Due Diligence Report as required by Section 119513.(b) If the fashion seller fails to file a complete Environmental Due Diligence Report within the time period specified in subdivision (a), the department or the state board, as appropriate, shall place the fashion seller on a publicly available list of noncompliant fashion sellers.(c) If the fashion seller fails to file a complete Environmental Due Diligence Report within three months of its due date, the department or the state board, as appropriate, may take an enforcement action pursuant to this article.119521. Except as provided in Section 119520, the department or state board, as appropriate, shall provide a notice of the noncompliance to a fashion seller that fails to comply with Section 38534 and this chapter and noncompliant fashion seller shall have three months from the date it receives the notice to meet the requirements of this chapter. 119522. (a) A fashion seller who violates this chapter shall be subject to a civil penalty of up to 2 percent of its annual revenues. Civil penalties collected pursuant to this section shall be deposited in the Fashion Environmental Remediation Fund.(b) In addition to subdivision (a), the department or the state board, as appropriate, may seek any appropriate equitable remedies for a violation of this chapter under their respective jurisdiction.119523. The department and the state board shall use a risk-based approach in enforcing this chapter and publish enforcement guidelines before the enforcement of this chapter. 119524. Any person may report a violation of this chapter to the department or the state board, as appropriate. Article 4. Fashion Environmental Remediation Fund119530. (a) The Fashion Environmental Remediation Fund is hereby established in the General Fund.(b) Moneys in the fund shall be available upon appropriation by the Legislature to the department or the state board for purposes of implementing this chapter and for purposes of implementing one or more environmental benefit projects or environmental remediation projects that directly and verifiably benefit communities directly impacted, to the extent feasible, at the location where the injury has occurred.(c) In addition to civil penalties specified in Section 119522, any other moneys appropriated by the Legislature for purposes of this chapter or for the implementation of environmental benefit projects shall be deposited in the fund. Article 5. Miscellaneous119535. The provisions of this chapter are severable. If any provision of this chapter or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. This act shall be known, and may be cited, as the Fashion Environmental Accountability Act of 2025.
SECTION 1. This act shall be known, and may be cited, as the Fashion Environmental Accountability Act of 2025.
SECTION 1. This act shall be known, and may be cited, as the Fashion Environmental Accountability Act of 2025.
### SECTION 1.
SEC. 2. Section 38534 is added to the Health and Safety Code, to read:38534. (a) For purposes of this section, unless otherwise stated, all terms used shall have the same meanings set forth in Section 38532 or Chapter 10 (commencing with Section 119500) of Part 15 of Division 104.(b) In carrying out its effective environmental due diligence under Chapter 10 (commencing with Section 119500) of Part 15 of Division 104, a fashion seller shall do all of the following:(1) (A) Establish a quantitative baseline for the fashion sellers emissions of greenhouse gases and targets for reductions in the emissions of greenhouse gases in the near-term and long-term covering the fashion sellers scopes 1, 2, and 3 emissions that align with, at a minimum, target validation criteria promulgated by the Science Based Targets initiative, a partnership of the United Nations Global Compact, the World Resources Institute, CDP, and the World Wide Fund for Nature.(B) For fashion sellers with a global revenue of over one billion dollars ($1,000,000,000), the absolute contraction approach for the reduction in emissions of greenhouse gases shall be used to calculate the scope 3 emissions.(2) Report, as a part of the Environmental Due Diligence Report required by Section 119513, both of the following:(A) Its compliance with the targets set pursuant to paragraph (1).(B) (i) Its greenhouse gas emissions inventory, including absolute figures, that conforms with the accounting and reporting requirements of the Greenhouse Gas Protocol Corporate Accounting and Reporting Standards, the Scope Two Guidance, and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard promulgated by the World Resources Institute and the World Business Council for Sustainable Development.(ii) The greenhouse gas emissions inventory shall be independently verified not less than once every two years.(c) (1) If a fashion seller fails to meet the targets set in paragraph (1) of subdivision (b), the fashion seller shall have 18 months to reduce their emissions of greenhouse gases to meet those targets and return to the necessary reduction pathway to meet those targets.(2) For a fashion seller with an annual revenue of over one billion dollars ($1,000,000,000), in nontarget years, the fashion seller is deemed to be in violation of this section if the absolute emissions of greenhouse gases reported pursuant to this section increase in five consecutive years.(d) (1) Notwithstanding Part 6 (commencing with Section 38580), this section shall be enforced pursuant to Article 3 (commencing with Section 119520) of Chapter 10 of Part 15 of Division 104.(2) A fashion seller is not subject to a civil penalty for a misstatement with regards to the scope 3 emissions disclosure if the disclosure is made with a reasonable basis and disclosed in good faith.(e) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 2. Section 38534 is added to the Health and Safety Code, to read:
### SEC. 2.
38534. (a) For purposes of this section, unless otherwise stated, all terms used shall have the same meanings set forth in Section 38532 or Chapter 10 (commencing with Section 119500) of Part 15 of Division 104.(b) In carrying out its effective environmental due diligence under Chapter 10 (commencing with Section 119500) of Part 15 of Division 104, a fashion seller shall do all of the following:(1) (A) Establish a quantitative baseline for the fashion sellers emissions of greenhouse gases and targets for reductions in the emissions of greenhouse gases in the near-term and long-term covering the fashion sellers scopes 1, 2, and 3 emissions that align with, at a minimum, target validation criteria promulgated by the Science Based Targets initiative, a partnership of the United Nations Global Compact, the World Resources Institute, CDP, and the World Wide Fund for Nature.(B) For fashion sellers with a global revenue of over one billion dollars ($1,000,000,000), the absolute contraction approach for the reduction in emissions of greenhouse gases shall be used to calculate the scope 3 emissions.(2) Report, as a part of the Environmental Due Diligence Report required by Section 119513, both of the following:(A) Its compliance with the targets set pursuant to paragraph (1).(B) (i) Its greenhouse gas emissions inventory, including absolute figures, that conforms with the accounting and reporting requirements of the Greenhouse Gas Protocol Corporate Accounting and Reporting Standards, the Scope Two Guidance, and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard promulgated by the World Resources Institute and the World Business Council for Sustainable Development.(ii) The greenhouse gas emissions inventory shall be independently verified not less than once every two years.(c) (1) If a fashion seller fails to meet the targets set in paragraph (1) of subdivision (b), the fashion seller shall have 18 months to reduce their emissions of greenhouse gases to meet those targets and return to the necessary reduction pathway to meet those targets.(2) For a fashion seller with an annual revenue of over one billion dollars ($1,000,000,000), in nontarget years, the fashion seller is deemed to be in violation of this section if the absolute emissions of greenhouse gases reported pursuant to this section increase in five consecutive years.(d) (1) Notwithstanding Part 6 (commencing with Section 38580), this section shall be enforced pursuant to Article 3 (commencing with Section 119520) of Chapter 10 of Part 15 of Division 104.(2) A fashion seller is not subject to a civil penalty for a misstatement with regards to the scope 3 emissions disclosure if the disclosure is made with a reasonable basis and disclosed in good faith.(e) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
38534. (a) For purposes of this section, unless otherwise stated, all terms used shall have the same meanings set forth in Section 38532 or Chapter 10 (commencing with Section 119500) of Part 15 of Division 104.(b) In carrying out its effective environmental due diligence under Chapter 10 (commencing with Section 119500) of Part 15 of Division 104, a fashion seller shall do all of the following:(1) (A) Establish a quantitative baseline for the fashion sellers emissions of greenhouse gases and targets for reductions in the emissions of greenhouse gases in the near-term and long-term covering the fashion sellers scopes 1, 2, and 3 emissions that align with, at a minimum, target validation criteria promulgated by the Science Based Targets initiative, a partnership of the United Nations Global Compact, the World Resources Institute, CDP, and the World Wide Fund for Nature.(B) For fashion sellers with a global revenue of over one billion dollars ($1,000,000,000), the absolute contraction approach for the reduction in emissions of greenhouse gases shall be used to calculate the scope 3 emissions.(2) Report, as a part of the Environmental Due Diligence Report required by Section 119513, both of the following:(A) Its compliance with the targets set pursuant to paragraph (1).(B) (i) Its greenhouse gas emissions inventory, including absolute figures, that conforms with the accounting and reporting requirements of the Greenhouse Gas Protocol Corporate Accounting and Reporting Standards, the Scope Two Guidance, and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard promulgated by the World Resources Institute and the World Business Council for Sustainable Development.(ii) The greenhouse gas emissions inventory shall be independently verified not less than once every two years.(c) (1) If a fashion seller fails to meet the targets set in paragraph (1) of subdivision (b), the fashion seller shall have 18 months to reduce their emissions of greenhouse gases to meet those targets and return to the necessary reduction pathway to meet those targets.(2) For a fashion seller with an annual revenue of over one billion dollars ($1,000,000,000), in nontarget years, the fashion seller is deemed to be in violation of this section if the absolute emissions of greenhouse gases reported pursuant to this section increase in five consecutive years.(d) (1) Notwithstanding Part 6 (commencing with Section 38580), this section shall be enforced pursuant to Article 3 (commencing with Section 119520) of Chapter 10 of Part 15 of Division 104.(2) A fashion seller is not subject to a civil penalty for a misstatement with regards to the scope 3 emissions disclosure if the disclosure is made with a reasonable basis and disclosed in good faith.(e) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
38534. (a) For purposes of this section, unless otherwise stated, all terms used shall have the same meanings set forth in Section 38532 or Chapter 10 (commencing with Section 119500) of Part 15 of Division 104.(b) In carrying out its effective environmental due diligence under Chapter 10 (commencing with Section 119500) of Part 15 of Division 104, a fashion seller shall do all of the following:(1) (A) Establish a quantitative baseline for the fashion sellers emissions of greenhouse gases and targets for reductions in the emissions of greenhouse gases in the near-term and long-term covering the fashion sellers scopes 1, 2, and 3 emissions that align with, at a minimum, target validation criteria promulgated by the Science Based Targets initiative, a partnership of the United Nations Global Compact, the World Resources Institute, CDP, and the World Wide Fund for Nature.(B) For fashion sellers with a global revenue of over one billion dollars ($1,000,000,000), the absolute contraction approach for the reduction in emissions of greenhouse gases shall be used to calculate the scope 3 emissions.(2) Report, as a part of the Environmental Due Diligence Report required by Section 119513, both of the following:(A) Its compliance with the targets set pursuant to paragraph (1).(B) (i) Its greenhouse gas emissions inventory, including absolute figures, that conforms with the accounting and reporting requirements of the Greenhouse Gas Protocol Corporate Accounting and Reporting Standards, the Scope Two Guidance, and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard promulgated by the World Resources Institute and the World Business Council for Sustainable Development.(ii) The greenhouse gas emissions inventory shall be independently verified not less than once every two years.(c) (1) If a fashion seller fails to meet the targets set in paragraph (1) of subdivision (b), the fashion seller shall have 18 months to reduce their emissions of greenhouse gases to meet those targets and return to the necessary reduction pathway to meet those targets.(2) For a fashion seller with an annual revenue of over one billion dollars ($1,000,000,000), in nontarget years, the fashion seller is deemed to be in violation of this section if the absolute emissions of greenhouse gases reported pursuant to this section increase in five consecutive years.(d) (1) Notwithstanding Part 6 (commencing with Section 38580), this section shall be enforced pursuant to Article 3 (commencing with Section 119520) of Chapter 10 of Part 15 of Division 104.(2) A fashion seller is not subject to a civil penalty for a misstatement with regards to the scope 3 emissions disclosure if the disclosure is made with a reasonable basis and disclosed in good faith.(e) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
38534. (a) For purposes of this section, unless otherwise stated, all terms used shall have the same meanings set forth in Section 38532 or Chapter 10 (commencing with Section 119500) of Part 15 of Division 104.
(b) In carrying out its effective environmental due diligence under Chapter 10 (commencing with Section 119500) of Part 15 of Division 104, a fashion seller shall do all of the following:
(1) (A) Establish a quantitative baseline for the fashion sellers emissions of greenhouse gases and targets for reductions in the emissions of greenhouse gases in the near-term and long-term covering the fashion sellers scopes 1, 2, and 3 emissions that align with, at a minimum, target validation criteria promulgated by the Science Based Targets initiative, a partnership of the United Nations Global Compact, the World Resources Institute, CDP, and the World Wide Fund for Nature.
(B) For fashion sellers with a global revenue of over one billion dollars ($1,000,000,000), the absolute contraction approach for the reduction in emissions of greenhouse gases shall be used to calculate the scope 3 emissions.
(2) Report, as a part of the Environmental Due Diligence Report required by Section 119513, both of the following:
(A) Its compliance with the targets set pursuant to paragraph (1).
(B) (i) Its greenhouse gas emissions inventory, including absolute figures, that conforms with the accounting and reporting requirements of the Greenhouse Gas Protocol Corporate Accounting and Reporting Standards, the Scope Two Guidance, and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard promulgated by the World Resources Institute and the World Business Council for Sustainable Development.
(ii) The greenhouse gas emissions inventory shall be independently verified not less than once every two years.
(c) (1) If a fashion seller fails to meet the targets set in paragraph (1) of subdivision (b), the fashion seller shall have 18 months to reduce their emissions of greenhouse gases to meet those targets and return to the necessary reduction pathway to meet those targets.
(2) For a fashion seller with an annual revenue of over one billion dollars ($1,000,000,000), in nontarget years, the fashion seller is deemed to be in violation of this section if the absolute emissions of greenhouse gases reported pursuant to this section increase in five consecutive years.
(d) (1) Notwithstanding Part 6 (commencing with Section 38580), this section shall be enforced pursuant to Article 3 (commencing with Section 119520) of Chapter 10 of Part 15 of Division 104.
(2) A fashion seller is not subject to a civil penalty for a misstatement with regards to the scope 3 emissions disclosure if the disclosure is made with a reasonable basis and disclosed in good faith.
(e) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 3. Chapter 10 (commencing with Section 119500) is added to Part 15 of Division 104 of the Health and Safety Code, to read: CHAPTER 10. Fashion Sellers Article 1. General Provision119500. For purposes of this chapter, the following definitions shall apply:(a) Department means the Department of Toxic Substances Control.(b) Doing business in the state means engaging in transactions on a regular and continual basis within the state for financial or pecuniary gain or profit.(c) Environmental due diligence means the comprehensive process companies shall carry out to identify, cease, prevent, mitigate, account for, and remediate actual and potential adverse impacts to the environment in their own operations and in their supply chain, in compliance with, at a minimum, the standards outlined in the most recent Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises, and the most recent Organisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector. (d) Environmental Due Diligence Report means a document prepared by a fashion seller to communicate all relevant information concerning the existence, implementation, and outcomes of due diligence in order to comply with the requirements of this chapter, and to comply with any rules or regulations established pursuant to this chapter.(e) Fashion bag means flexible packaging made of textiles, leather or other animal products, woven material, or other similar materials intended for repeated use, including, when applicable, those produced as a private label.(f) Fashion goods means wearing apparel, footwear, or fashion bags.(g) Fashion seller means a business entity that does business in the state involving the sale of fashion goods in excess of one hundred million dollars ($100,000,000) in annual gross receipts. Fashion seller does not include fashion sellers that sell used fashion goods and does not include multibrand retailers, unless the total annual gross receipts of all of the private labels under the retailer exceeds one hundred million dollars ($100,000,000). (h) Footwear means any covering worn or intended to be worn on the foot, including, when applicable, those produced as a private label. (i) Fund means the Fashion Environmental Remediation Fund established pursuant to Section 119530.(j) (1) Gross receipts means the gross amounts realized on the sale or exchange of property, the performance of services, or the use of property or capital, including rents, royalties, interest, and dividends, in a transaction that produces business income. Amounts realized shall not be reduced by the cost of goods sold or the basis of property sold.(2) Gross receipts does not include the following:(A) Repayments, redemption, or maturity of the principal of a loan, mutual fund, or similar marketable instrument.(B) The principal amount received under a purchase agreement or other transaction properly characterized as a loan.(C) Proceeds from the issuance of the fashion sellers own stock.(D) Damages and other amounts received as a result of litigation.(E) Property acquired on behalf of another.(F) Tax refunds and other tax benefits received.(G) Pension reversions.(H) Contributions to capital.(I) Income from discharge of indebtedness.(J) Amounts realized from exchanges of inventory that are not recognized under Title 26 of the United States Code, or would not be recognized if the exchange occurred in the United States.(K) Amounts received from transactions in intangible assets held in connection with a treasury function of the taxpayers unitary business and the gross receipts and overall net gains from the maturity, redemption, sale, exchange, or other disposition of those assets.(L) Amounts received from hedging transactions involving intangible assets. A hedging transaction for this purpose means a transaction related to the taxpayers trading function involving futures and options transactions for the purpose of hedging price risks of the products or commodities consumed, produced, or sold by the taxpayer.(k) Independently verified means audited by a verification body accredited by the department or state board, as appropriate. (l) OECD means the Organisation for Economic Co-operation and Development.(m) Open data principles means data that can be freely used, reused, and redistributed by any person, that is findable or easily discoverable on an internet website or within a database, that is accessible or available in a machine-readable, convenient, modifiable form, that is published as a whole, complete dataset that is interoperable or able to be mixed with different data sets, and that is reusable or provided under an open license that permits reuse and redistribution, including the intermixing with other datasets.(n) Produced as a private label means produced under a name, label, or entity separate from the fashion seller, but that is sold by the fashion seller.(o) Risk-based approach means commensurate to the likelihood and severity of the harm. A risk-based approach includes, but is not limited to, prioritizing the order of action based on the likelihood and severity of harm, measured by the harms scale or gravity, scope, and irremediable character. (p) Significant supplier means suppliers representing 75 percent of fabric by volume.(q) State board means the State Air Resources Board.(r) Supply chain tiers means a four tier system consisting of the following:(1) Tier one means suppliers that produce finished goods for fashion sellers, including suppliers subcontractors, that provide services, including, but not limited to, sewing and embroidering.(2) Tier two means suppliers to tier one, including subcontractors, that provide services, including, but not limited to, knitting, weaving, washing, dyeing, finishing, printing for finished goods, and components and materials for finished goods if they are stand-alone operations and not integrated into tier one suppliers. Components for this purpose means materials used to create a product, including, but not limited to, buttons, zippers, rubber soles, down, and fusibles.(3) Tier three means suppliers to tier two suppliers, including subcontractors, that process raw materials, such as spinning.(4) Tier four means companies, including subcontractors, that supply raw materials to tier three suppliers.(s) Wearing apparel means any costume or article of clothing worn or intended to be worn by individuals.119501. (a) The department shall have jurisdiction over a fashion sellers environmental due diligence under this chapter pertaining to chemical management and wastewater testing.(b) The state board shall have jurisdiction over a fashion sellers environmental due diligence under Section 38534 and this chapter pertaining to emissions of greenhouse gases.119502. (a) (1) The department and the state board, as appropriate, may, separately or jointly, prescribe regulations necessary or appropriate to carry out the purposes of Section 38534 and this chapter under their respective jurisdiction.(2) In developing the regulations, the department and the state board shall minimize duplication of efforts in the reporting requirement by authorizing the submission of a due diligence report that is prepared to meet other national or international reporting requirements as a means of compliance with Section 119513, if the due diligence report meets the requirements of this chapter.(b) The department and the state board, as appropriate, shall develop and disseminate education materials to fashion sellers, including providing alerts to time-sensitive issues, emerging issues, and high-risk country situations, and assist fashion sellers in improving the quality of their due diligence.119503. The department and the state board shall, separately or jointly, develop an application process for accrediting entities to act as independent verifiers for purposes of this chapter. The process shall include, at minimum, all of the following:(a) Consideration of the qualifications of the applicants verification staff, including, but not limited to, their education, experience, and professional licenses.(b) A requirement that the applicant employ five full-time staff with expertise in the requirements they seek to verify under this chapter.(c) Consideration of whether the applicant has policies and mechanisms in place to prevent conflicts-of-interest and to identify and resolve potential conflict of interest situations, if they arise. The department shall require the applicant to provide at least the following information to make this consideration:(1) Identification of the services to be provided by the applicant, the industries that the applicant serves, and the locations where those services are provided.(2) A detailed organizational chart that includes the applicant, its management structure, and any related entities.(3) The applicants internal conflict-of-interest policy that identifies activities and limits to monetary or nonmonetary gifts that applies to all employees and procedures to monitor conflicts of interest.(d) Prohibition of a verifying entity that is accredited by the department or the state board pursuant to this chapter from providing services to any entity where a conflict of interest exists. Conflicts of interest include, but are not limited to, the following:(1) The verifying entity and the fashion seller being reviewed share any management staff or board of directors.(2) The senior management staff of the fashion seller being reviewed was an employee of the verifying entity within the previous five years, or vice versa.(3) Any employee of the verifying entity or a subcontractor who is a member of the verifying entitys team for the review of the fashion seller has provided the fashion seller with services related to verification within the previous five years.(4) Any employee of the verifying entity provides any type of nonmonetary incentive to a fashion seller to secure a verification contract.(5) Any additional criteria determined by the department or the state board.(e) A requirement that a verifying entity notify the department or the state board, as appropriate, within 30 calendar days if it no longer meets the requirements to be a verifying entity set forth by this section or by regulations adopted by the department or the state board under this section. Article 2. Environmental Due Diligence119510. (a) Every fashion sellers shall carry out effective environmental due diligence, consistent with this chapter, for the portions of their business related to fashion goods, including, but not limited to, those items produced as a private label.(b) (1) Environmental due diligence required under this article shall include a fashion seller taking a risk-based approach and implementing good faith efforts to map suppliers as follows:(A) No later than January 1, 2027, tier one suppliers shall be disclosed, and contain at least 80 percent of suppliers by volume.(B) No later than January 1, 2028, tier two suppliers shall be disclosed, and contain at least 75 percent of suppliers by volume.(C) No later than January 1, 2030, tier three suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.(D) No later than January 1, 2032, tier four suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.(2) Supplier disclosure for all tiers shall include the name, address, parent company, and product type.119511. In carrying out its environmental due diligence under this article, a fashion seller shall comply with the environmental guidelines of OECDs Guidelines for Multinational Enterprises on Responsible Business Conduct and OECDs Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector that, at a minimum, require a fashion seller to do all of the following:(a) Embed responsible business conduct in the fashion sellers policies and management systems.(b) Identify areas of significant risks of societal and ecological harm from its own activities and its supply chain relationships.(c) Identify, prioritize, and assess the significant potential and actual adverse impacts of those risks.(d) Cease, prevent, or mitigate those risks, including, but not limited to, all of the following:(1) Taking actions specified in Sections 38534 and 119512.(2) Using responsible exit or disengagement strategies.(3) Consulting and engaging with impacted and potentially impacted stakeholders and rights holders and their representatives.(e) Tracking the implementation of activities to cease, prevent, and mitigate risks and the result of those activities.(f) Provision for, or cooperating in, the remediation of adverse environmental impacts resulting from the fashion sellers or its suppliers operation.119512. (a) (1) By January 1, 2028, in accordance with internationally recognized methodologies for chemical management and wastewater testing, a fashion seller shall require all of its significant tier 2 dyeing, finishing, printing, and garment washing suppliers to do all of the following: (A) Sample and annually report to the fashion seller on wastewater chemical concentrations and water usage.(B) Report on chemical inventory.(C) Provide evidence that the supplier is in compliance with local chemical management laws.(2) For a significant supplier that uses indirect wastewater management, a fashion seller shall report all of the following:(A) The chemical concentrations of the wastewater treatment facilities.(B) The percentage of significant suppliers that have a chemical remediation plan for wastewater in place.(C) Actions taken by the fashion seller to remediate wastewater.(b) On and after January 1, 2029, a fashion seller is deemed to be in violation of this section if its significant tier 2 dyeing, finishing, printing, and garment washing suppliers fail to make adequate progress in the remediation of hazardous chemical concentration in wastewater.(c) Reports required pursuant to this section shall be independently verified.(d) Information provided to the fashion seller pursuant to this section shall be reported as a part of its Environmental Due Diligence Report required by Section 119513.119513. (a) (1) Beginning July 1, 2027, and annually thereafter, a fashion seller shall develop and submit to the department and the state board an Environmental Due Diligence Report pertaining to the effective environmental due diligence performed by the fashion seller for the prior calendar year, including activities and financial expenditures to support supply chain environmental due diligence for review by the department and the state board, as appropriate. The report shall also include the fashion sellers annual volume of material produced including a breakdown by material type.(2) The information specified in the Environmental Due Diligence Report shall be independently verified before submission.(b) (1) The fashion seller shall make the Environmental Due Diligence Report available to the public on its internet website consistent with the open data principles contemporaneously with the submission of the report under subdivision (a).(2) If the fashion seller does not have an internet website, they shall provide a written disclosure within 30 days to any person that requests a copy of the Environmental Due Diligence Report.(c) The department and the state board shall review the Environmental Due Diligence Report under their respective jurisdiction for completeness. Article 3. Enforcement119520. (a) The department or the state board, as appropriate, shall identify and notify any fashion seller that fails to comply with Section 119513 and provide the noncompliant fashion seller with a 30-day grace period to file a complete Environmental Due Diligence Report as required by Section 119513.(b) If the fashion seller fails to file a complete Environmental Due Diligence Report within the time period specified in subdivision (a), the department or the state board, as appropriate, shall place the fashion seller on a publicly available list of noncompliant fashion sellers.(c) If the fashion seller fails to file a complete Environmental Due Diligence Report within three months of its due date, the department or the state board, as appropriate, may take an enforcement action pursuant to this article.119521. Except as provided in Section 119520, the department or state board, as appropriate, shall provide a notice of the noncompliance to a fashion seller that fails to comply with Section 38534 and this chapter and noncompliant fashion seller shall have three months from the date it receives the notice to meet the requirements of this chapter. 119522. (a) A fashion seller who violates this chapter shall be subject to a civil penalty of up to 2 percent of its annual revenues. Civil penalties collected pursuant to this section shall be deposited in the Fashion Environmental Remediation Fund.(b) In addition to subdivision (a), the department or the state board, as appropriate, may seek any appropriate equitable remedies for a violation of this chapter under their respective jurisdiction.119523. The department and the state board shall use a risk-based approach in enforcing this chapter and publish enforcement guidelines before the enforcement of this chapter. 119524. Any person may report a violation of this chapter to the department or the state board, as appropriate. Article 4. Fashion Environmental Remediation Fund119530. (a) The Fashion Environmental Remediation Fund is hereby established in the General Fund.(b) Moneys in the fund shall be available upon appropriation by the Legislature to the department or the state board for purposes of implementing this chapter and for purposes of implementing one or more environmental benefit projects or environmental remediation projects that directly and verifiably benefit communities directly impacted, to the extent feasible, at the location where the injury has occurred.(c) In addition to civil penalties specified in Section 119522, any other moneys appropriated by the Legislature for purposes of this chapter or for the implementation of environmental benefit projects shall be deposited in the fund. Article 5. Miscellaneous119535. The provisions of this chapter are severable. If any provision of this chapter or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 3. Chapter 10 (commencing with Section 119500) is added to Part 15 of Division 104 of the Health and Safety Code, to read:
### SEC. 3.
CHAPTER 10. Fashion Sellers Article 1. General Provision119500. For purposes of this chapter, the following definitions shall apply:(a) Department means the Department of Toxic Substances Control.(b) Doing business in the state means engaging in transactions on a regular and continual basis within the state for financial or pecuniary gain or profit.(c) Environmental due diligence means the comprehensive process companies shall carry out to identify, cease, prevent, mitigate, account for, and remediate actual and potential adverse impacts to the environment in their own operations and in their supply chain, in compliance with, at a minimum, the standards outlined in the most recent Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises, and the most recent Organisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector. (d) Environmental Due Diligence Report means a document prepared by a fashion seller to communicate all relevant information concerning the existence, implementation, and outcomes of due diligence in order to comply with the requirements of this chapter, and to comply with any rules or regulations established pursuant to this chapter.(e) Fashion bag means flexible packaging made of textiles, leather or other animal products, woven material, or other similar materials intended for repeated use, including, when applicable, those produced as a private label.(f) Fashion goods means wearing apparel, footwear, or fashion bags.(g) Fashion seller means a business entity that does business in the state involving the sale of fashion goods in excess of one hundred million dollars ($100,000,000) in annual gross receipts. Fashion seller does not include fashion sellers that sell used fashion goods and does not include multibrand retailers, unless the total annual gross receipts of all of the private labels under the retailer exceeds one hundred million dollars ($100,000,000). (h) Footwear means any covering worn or intended to be worn on the foot, including, when applicable, those produced as a private label. (i) Fund means the Fashion Environmental Remediation Fund established pursuant to Section 119530.(j) (1) Gross receipts means the gross amounts realized on the sale or exchange of property, the performance of services, or the use of property or capital, including rents, royalties, interest, and dividends, in a transaction that produces business income. Amounts realized shall not be reduced by the cost of goods sold or the basis of property sold.(2) Gross receipts does not include the following:(A) Repayments, redemption, or maturity of the principal of a loan, mutual fund, or similar marketable instrument.(B) The principal amount received under a purchase agreement or other transaction properly characterized as a loan.(C) Proceeds from the issuance of the fashion sellers own stock.(D) Damages and other amounts received as a result of litigation.(E) Property acquired on behalf of another.(F) Tax refunds and other tax benefits received.(G) Pension reversions.(H) Contributions to capital.(I) Income from discharge of indebtedness.(J) Amounts realized from exchanges of inventory that are not recognized under Title 26 of the United States Code, or would not be recognized if the exchange occurred in the United States.(K) Amounts received from transactions in intangible assets held in connection with a treasury function of the taxpayers unitary business and the gross receipts and overall net gains from the maturity, redemption, sale, exchange, or other disposition of those assets.(L) Amounts received from hedging transactions involving intangible assets. A hedging transaction for this purpose means a transaction related to the taxpayers trading function involving futures and options transactions for the purpose of hedging price risks of the products or commodities consumed, produced, or sold by the taxpayer.(k) Independently verified means audited by a verification body accredited by the department or state board, as appropriate. (l) OECD means the Organisation for Economic Co-operation and Development.(m) Open data principles means data that can be freely used, reused, and redistributed by any person, that is findable or easily discoverable on an internet website or within a database, that is accessible or available in a machine-readable, convenient, modifiable form, that is published as a whole, complete dataset that is interoperable or able to be mixed with different data sets, and that is reusable or provided under an open license that permits reuse and redistribution, including the intermixing with other datasets.(n) Produced as a private label means produced under a name, label, or entity separate from the fashion seller, but that is sold by the fashion seller.(o) Risk-based approach means commensurate to the likelihood and severity of the harm. A risk-based approach includes, but is not limited to, prioritizing the order of action based on the likelihood and severity of harm, measured by the harms scale or gravity, scope, and irremediable character. (p) Significant supplier means suppliers representing 75 percent of fabric by volume.(q) State board means the State Air Resources Board.(r) Supply chain tiers means a four tier system consisting of the following:(1) Tier one means suppliers that produce finished goods for fashion sellers, including suppliers subcontractors, that provide services, including, but not limited to, sewing and embroidering.(2) Tier two means suppliers to tier one, including subcontractors, that provide services, including, but not limited to, knitting, weaving, washing, dyeing, finishing, printing for finished goods, and components and materials for finished goods if they are stand-alone operations and not integrated into tier one suppliers. Components for this purpose means materials used to create a product, including, but not limited to, buttons, zippers, rubber soles, down, and fusibles.(3) Tier three means suppliers to tier two suppliers, including subcontractors, that process raw materials, such as spinning.(4) Tier four means companies, including subcontractors, that supply raw materials to tier three suppliers.(s) Wearing apparel means any costume or article of clothing worn or intended to be worn by individuals.119501. (a) The department shall have jurisdiction over a fashion sellers environmental due diligence under this chapter pertaining to chemical management and wastewater testing.(b) The state board shall have jurisdiction over a fashion sellers environmental due diligence under Section 38534 and this chapter pertaining to emissions of greenhouse gases.119502. (a) (1) The department and the state board, as appropriate, may, separately or jointly, prescribe regulations necessary or appropriate to carry out the purposes of Section 38534 and this chapter under their respective jurisdiction.(2) In developing the regulations, the department and the state board shall minimize duplication of efforts in the reporting requirement by authorizing the submission of a due diligence report that is prepared to meet other national or international reporting requirements as a means of compliance with Section 119513, if the due diligence report meets the requirements of this chapter.(b) The department and the state board, as appropriate, shall develop and disseminate education materials to fashion sellers, including providing alerts to time-sensitive issues, emerging issues, and high-risk country situations, and assist fashion sellers in improving the quality of their due diligence.119503. The department and the state board shall, separately or jointly, develop an application process for accrediting entities to act as independent verifiers for purposes of this chapter. The process shall include, at minimum, all of the following:(a) Consideration of the qualifications of the applicants verification staff, including, but not limited to, their education, experience, and professional licenses.(b) A requirement that the applicant employ five full-time staff with expertise in the requirements they seek to verify under this chapter.(c) Consideration of whether the applicant has policies and mechanisms in place to prevent conflicts-of-interest and to identify and resolve potential conflict of interest situations, if they arise. The department shall require the applicant to provide at least the following information to make this consideration:(1) Identification of the services to be provided by the applicant, the industries that the applicant serves, and the locations where those services are provided.(2) A detailed organizational chart that includes the applicant, its management structure, and any related entities.(3) The applicants internal conflict-of-interest policy that identifies activities and limits to monetary or nonmonetary gifts that applies to all employees and procedures to monitor conflicts of interest.(d) Prohibition of a verifying entity that is accredited by the department or the state board pursuant to this chapter from providing services to any entity where a conflict of interest exists. Conflicts of interest include, but are not limited to, the following:(1) The verifying entity and the fashion seller being reviewed share any management staff or board of directors.(2) The senior management staff of the fashion seller being reviewed was an employee of the verifying entity within the previous five years, or vice versa.(3) Any employee of the verifying entity or a subcontractor who is a member of the verifying entitys team for the review of the fashion seller has provided the fashion seller with services related to verification within the previous five years.(4) Any employee of the verifying entity provides any type of nonmonetary incentive to a fashion seller to secure a verification contract.(5) Any additional criteria determined by the department or the state board.(e) A requirement that a verifying entity notify the department or the state board, as appropriate, within 30 calendar days if it no longer meets the requirements to be a verifying entity set forth by this section or by regulations adopted by the department or the state board under this section. Article 2. Environmental Due Diligence119510. (a) Every fashion sellers shall carry out effective environmental due diligence, consistent with this chapter, for the portions of their business related to fashion goods, including, but not limited to, those items produced as a private label.(b) (1) Environmental due diligence required under this article shall include a fashion seller taking a risk-based approach and implementing good faith efforts to map suppliers as follows:(A) No later than January 1, 2027, tier one suppliers shall be disclosed, and contain at least 80 percent of suppliers by volume.(B) No later than January 1, 2028, tier two suppliers shall be disclosed, and contain at least 75 percent of suppliers by volume.(C) No later than January 1, 2030, tier three suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.(D) No later than January 1, 2032, tier four suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.(2) Supplier disclosure for all tiers shall include the name, address, parent company, and product type.119511. In carrying out its environmental due diligence under this article, a fashion seller shall comply with the environmental guidelines of OECDs Guidelines for Multinational Enterprises on Responsible Business Conduct and OECDs Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector that, at a minimum, require a fashion seller to do all of the following:(a) Embed responsible business conduct in the fashion sellers policies and management systems.(b) Identify areas of significant risks of societal and ecological harm from its own activities and its supply chain relationships.(c) Identify, prioritize, and assess the significant potential and actual adverse impacts of those risks.(d) Cease, prevent, or mitigate those risks, including, but not limited to, all of the following:(1) Taking actions specified in Sections 38534 and 119512.(2) Using responsible exit or disengagement strategies.(3) Consulting and engaging with impacted and potentially impacted stakeholders and rights holders and their representatives.(e) Tracking the implementation of activities to cease, prevent, and mitigate risks and the result of those activities.(f) Provision for, or cooperating in, the remediation of adverse environmental impacts resulting from the fashion sellers or its suppliers operation.119512. (a) (1) By January 1, 2028, in accordance with internationally recognized methodologies for chemical management and wastewater testing, a fashion seller shall require all of its significant tier 2 dyeing, finishing, printing, and garment washing suppliers to do all of the following: (A) Sample and annually report to the fashion seller on wastewater chemical concentrations and water usage.(B) Report on chemical inventory.(C) Provide evidence that the supplier is in compliance with local chemical management laws.(2) For a significant supplier that uses indirect wastewater management, a fashion seller shall report all of the following:(A) The chemical concentrations of the wastewater treatment facilities.(B) The percentage of significant suppliers that have a chemical remediation plan for wastewater in place.(C) Actions taken by the fashion seller to remediate wastewater.(b) On and after January 1, 2029, a fashion seller is deemed to be in violation of this section if its significant tier 2 dyeing, finishing, printing, and garment washing suppliers fail to make adequate progress in the remediation of hazardous chemical concentration in wastewater.(c) Reports required pursuant to this section shall be independently verified.(d) Information provided to the fashion seller pursuant to this section shall be reported as a part of its Environmental Due Diligence Report required by Section 119513.119513. (a) (1) Beginning July 1, 2027, and annually thereafter, a fashion seller shall develop and submit to the department and the state board an Environmental Due Diligence Report pertaining to the effective environmental due diligence performed by the fashion seller for the prior calendar year, including activities and financial expenditures to support supply chain environmental due diligence for review by the department and the state board, as appropriate. The report shall also include the fashion sellers annual volume of material produced including a breakdown by material type.(2) The information specified in the Environmental Due Diligence Report shall be independently verified before submission.(b) (1) The fashion seller shall make the Environmental Due Diligence Report available to the public on its internet website consistent with the open data principles contemporaneously with the submission of the report under subdivision (a).(2) If the fashion seller does not have an internet website, they shall provide a written disclosure within 30 days to any person that requests a copy of the Environmental Due Diligence Report.(c) The department and the state board shall review the Environmental Due Diligence Report under their respective jurisdiction for completeness. Article 3. Enforcement119520. (a) The department or the state board, as appropriate, shall identify and notify any fashion seller that fails to comply with Section 119513 and provide the noncompliant fashion seller with a 30-day grace period to file a complete Environmental Due Diligence Report as required by Section 119513.(b) If the fashion seller fails to file a complete Environmental Due Diligence Report within the time period specified in subdivision (a), the department or the state board, as appropriate, shall place the fashion seller on a publicly available list of noncompliant fashion sellers.(c) If the fashion seller fails to file a complete Environmental Due Diligence Report within three months of its due date, the department or the state board, as appropriate, may take an enforcement action pursuant to this article.119521. Except as provided in Section 119520, the department or state board, as appropriate, shall provide a notice of the noncompliance to a fashion seller that fails to comply with Section 38534 and this chapter and noncompliant fashion seller shall have three months from the date it receives the notice to meet the requirements of this chapter. 119522. (a) A fashion seller who violates this chapter shall be subject to a civil penalty of up to 2 percent of its annual revenues. Civil penalties collected pursuant to this section shall be deposited in the Fashion Environmental Remediation Fund.(b) In addition to subdivision (a), the department or the state board, as appropriate, may seek any appropriate equitable remedies for a violation of this chapter under their respective jurisdiction.119523. The department and the state board shall use a risk-based approach in enforcing this chapter and publish enforcement guidelines before the enforcement of this chapter. 119524. Any person may report a violation of this chapter to the department or the state board, as appropriate. Article 4. Fashion Environmental Remediation Fund119530. (a) The Fashion Environmental Remediation Fund is hereby established in the General Fund.(b) Moneys in the fund shall be available upon appropriation by the Legislature to the department or the state board for purposes of implementing this chapter and for purposes of implementing one or more environmental benefit projects or environmental remediation projects that directly and verifiably benefit communities directly impacted, to the extent feasible, at the location where the injury has occurred.(c) In addition to civil penalties specified in Section 119522, any other moneys appropriated by the Legislature for purposes of this chapter or for the implementation of environmental benefit projects shall be deposited in the fund. Article 5. Miscellaneous119535. The provisions of this chapter are severable. If any provision of this chapter or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
CHAPTER 10. Fashion Sellers Article 1. General Provision119500. For purposes of this chapter, the following definitions shall apply:(a) Department means the Department of Toxic Substances Control.(b) Doing business in the state means engaging in transactions on a regular and continual basis within the state for financial or pecuniary gain or profit.(c) Environmental due diligence means the comprehensive process companies shall carry out to identify, cease, prevent, mitigate, account for, and remediate actual and potential adverse impacts to the environment in their own operations and in their supply chain, in compliance with, at a minimum, the standards outlined in the most recent Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises, and the most recent Organisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector. (d) Environmental Due Diligence Report means a document prepared by a fashion seller to communicate all relevant information concerning the existence, implementation, and outcomes of due diligence in order to comply with the requirements of this chapter, and to comply with any rules or regulations established pursuant to this chapter.(e) Fashion bag means flexible packaging made of textiles, leather or other animal products, woven material, or other similar materials intended for repeated use, including, when applicable, those produced as a private label.(f) Fashion goods means wearing apparel, footwear, or fashion bags.(g) Fashion seller means a business entity that does business in the state involving the sale of fashion goods in excess of one hundred million dollars ($100,000,000) in annual gross receipts. Fashion seller does not include fashion sellers that sell used fashion goods and does not include multibrand retailers, unless the total annual gross receipts of all of the private labels under the retailer exceeds one hundred million dollars ($100,000,000). (h) Footwear means any covering worn or intended to be worn on the foot, including, when applicable, those produced as a private label. (i) Fund means the Fashion Environmental Remediation Fund established pursuant to Section 119530.(j) (1) Gross receipts means the gross amounts realized on the sale or exchange of property, the performance of services, or the use of property or capital, including rents, royalties, interest, and dividends, in a transaction that produces business income. Amounts realized shall not be reduced by the cost of goods sold or the basis of property sold.(2) Gross receipts does not include the following:(A) Repayments, redemption, or maturity of the principal of a loan, mutual fund, or similar marketable instrument.(B) The principal amount received under a purchase agreement or other transaction properly characterized as a loan.(C) Proceeds from the issuance of the fashion sellers own stock.(D) Damages and other amounts received as a result of litigation.(E) Property acquired on behalf of another.(F) Tax refunds and other tax benefits received.(G) Pension reversions.(H) Contributions to capital.(I) Income from discharge of indebtedness.(J) Amounts realized from exchanges of inventory that are not recognized under Title 26 of the United States Code, or would not be recognized if the exchange occurred in the United States.(K) Amounts received from transactions in intangible assets held in connection with a treasury function of the taxpayers unitary business and the gross receipts and overall net gains from the maturity, redemption, sale, exchange, or other disposition of those assets.(L) Amounts received from hedging transactions involving intangible assets. A hedging transaction for this purpose means a transaction related to the taxpayers trading function involving futures and options transactions for the purpose of hedging price risks of the products or commodities consumed, produced, or sold by the taxpayer.(k) Independently verified means audited by a verification body accredited by the department or state board, as appropriate. (l) OECD means the Organisation for Economic Co-operation and Development.(m) Open data principles means data that can be freely used, reused, and redistributed by any person, that is findable or easily discoverable on an internet website or within a database, that is accessible or available in a machine-readable, convenient, modifiable form, that is published as a whole, complete dataset that is interoperable or able to be mixed with different data sets, and that is reusable or provided under an open license that permits reuse and redistribution, including the intermixing with other datasets.(n) Produced as a private label means produced under a name, label, or entity separate from the fashion seller, but that is sold by the fashion seller.(o) Risk-based approach means commensurate to the likelihood and severity of the harm. A risk-based approach includes, but is not limited to, prioritizing the order of action based on the likelihood and severity of harm, measured by the harms scale or gravity, scope, and irremediable character. (p) Significant supplier means suppliers representing 75 percent of fabric by volume.(q) State board means the State Air Resources Board.(r) Supply chain tiers means a four tier system consisting of the following:(1) Tier one means suppliers that produce finished goods for fashion sellers, including suppliers subcontractors, that provide services, including, but not limited to, sewing and embroidering.(2) Tier two means suppliers to tier one, including subcontractors, that provide services, including, but not limited to, knitting, weaving, washing, dyeing, finishing, printing for finished goods, and components and materials for finished goods if they are stand-alone operations and not integrated into tier one suppliers. Components for this purpose means materials used to create a product, including, but not limited to, buttons, zippers, rubber soles, down, and fusibles.(3) Tier three means suppliers to tier two suppliers, including subcontractors, that process raw materials, such as spinning.(4) Tier four means companies, including subcontractors, that supply raw materials to tier three suppliers.(s) Wearing apparel means any costume or article of clothing worn or intended to be worn by individuals.119501. (a) The department shall have jurisdiction over a fashion sellers environmental due diligence under this chapter pertaining to chemical management and wastewater testing.(b) The state board shall have jurisdiction over a fashion sellers environmental due diligence under Section 38534 and this chapter pertaining to emissions of greenhouse gases.119502. (a) (1) The department and the state board, as appropriate, may, separately or jointly, prescribe regulations necessary or appropriate to carry out the purposes of Section 38534 and this chapter under their respective jurisdiction.(2) In developing the regulations, the department and the state board shall minimize duplication of efforts in the reporting requirement by authorizing the submission of a due diligence report that is prepared to meet other national or international reporting requirements as a means of compliance with Section 119513, if the due diligence report meets the requirements of this chapter.(b) The department and the state board, as appropriate, shall develop and disseminate education materials to fashion sellers, including providing alerts to time-sensitive issues, emerging issues, and high-risk country situations, and assist fashion sellers in improving the quality of their due diligence.119503. The department and the state board shall, separately or jointly, develop an application process for accrediting entities to act as independent verifiers for purposes of this chapter. The process shall include, at minimum, all of the following:(a) Consideration of the qualifications of the applicants verification staff, including, but not limited to, their education, experience, and professional licenses.(b) A requirement that the applicant employ five full-time staff with expertise in the requirements they seek to verify under this chapter.(c) Consideration of whether the applicant has policies and mechanisms in place to prevent conflicts-of-interest and to identify and resolve potential conflict of interest situations, if they arise. The department shall require the applicant to provide at least the following information to make this consideration:(1) Identification of the services to be provided by the applicant, the industries that the applicant serves, and the locations where those services are provided.(2) A detailed organizational chart that includes the applicant, its management structure, and any related entities.(3) The applicants internal conflict-of-interest policy that identifies activities and limits to monetary or nonmonetary gifts that applies to all employees and procedures to monitor conflicts of interest.(d) Prohibition of a verifying entity that is accredited by the department or the state board pursuant to this chapter from providing services to any entity where a conflict of interest exists. Conflicts of interest include, but are not limited to, the following:(1) The verifying entity and the fashion seller being reviewed share any management staff or board of directors.(2) The senior management staff of the fashion seller being reviewed was an employee of the verifying entity within the previous five years, or vice versa.(3) Any employee of the verifying entity or a subcontractor who is a member of the verifying entitys team for the review of the fashion seller has provided the fashion seller with services related to verification within the previous five years.(4) Any employee of the verifying entity provides any type of nonmonetary incentive to a fashion seller to secure a verification contract.(5) Any additional criteria determined by the department or the state board.(e) A requirement that a verifying entity notify the department or the state board, as appropriate, within 30 calendar days if it no longer meets the requirements to be a verifying entity set forth by this section or by regulations adopted by the department or the state board under this section. Article 2. Environmental Due Diligence119510. (a) Every fashion sellers shall carry out effective environmental due diligence, consistent with this chapter, for the portions of their business related to fashion goods, including, but not limited to, those items produced as a private label.(b) (1) Environmental due diligence required under this article shall include a fashion seller taking a risk-based approach and implementing good faith efforts to map suppliers as follows:(A) No later than January 1, 2027, tier one suppliers shall be disclosed, and contain at least 80 percent of suppliers by volume.(B) No later than January 1, 2028, tier two suppliers shall be disclosed, and contain at least 75 percent of suppliers by volume.(C) No later than January 1, 2030, tier three suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.(D) No later than January 1, 2032, tier four suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.(2) Supplier disclosure for all tiers shall include the name, address, parent company, and product type.119511. In carrying out its environmental due diligence under this article, a fashion seller shall comply with the environmental guidelines of OECDs Guidelines for Multinational Enterprises on Responsible Business Conduct and OECDs Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector that, at a minimum, require a fashion seller to do all of the following:(a) Embed responsible business conduct in the fashion sellers policies and management systems.(b) Identify areas of significant risks of societal and ecological harm from its own activities and its supply chain relationships.(c) Identify, prioritize, and assess the significant potential and actual adverse impacts of those risks.(d) Cease, prevent, or mitigate those risks, including, but not limited to, all of the following:(1) Taking actions specified in Sections 38534 and 119512.(2) Using responsible exit or disengagement strategies.(3) Consulting and engaging with impacted and potentially impacted stakeholders and rights holders and their representatives.(e) Tracking the implementation of activities to cease, prevent, and mitigate risks and the result of those activities.(f) Provision for, or cooperating in, the remediation of adverse environmental impacts resulting from the fashion sellers or its suppliers operation.119512. (a) (1) By January 1, 2028, in accordance with internationally recognized methodologies for chemical management and wastewater testing, a fashion seller shall require all of its significant tier 2 dyeing, finishing, printing, and garment washing suppliers to do all of the following: (A) Sample and annually report to the fashion seller on wastewater chemical concentrations and water usage.(B) Report on chemical inventory.(C) Provide evidence that the supplier is in compliance with local chemical management laws.(2) For a significant supplier that uses indirect wastewater management, a fashion seller shall report all of the following:(A) The chemical concentrations of the wastewater treatment facilities.(B) The percentage of significant suppliers that have a chemical remediation plan for wastewater in place.(C) Actions taken by the fashion seller to remediate wastewater.(b) On and after January 1, 2029, a fashion seller is deemed to be in violation of this section if its significant tier 2 dyeing, finishing, printing, and garment washing suppliers fail to make adequate progress in the remediation of hazardous chemical concentration in wastewater.(c) Reports required pursuant to this section shall be independently verified.(d) Information provided to the fashion seller pursuant to this section shall be reported as a part of its Environmental Due Diligence Report required by Section 119513.119513. (a) (1) Beginning July 1, 2027, and annually thereafter, a fashion seller shall develop and submit to the department and the state board an Environmental Due Diligence Report pertaining to the effective environmental due diligence performed by the fashion seller for the prior calendar year, including activities and financial expenditures to support supply chain environmental due diligence for review by the department and the state board, as appropriate. The report shall also include the fashion sellers annual volume of material produced including a breakdown by material type.(2) The information specified in the Environmental Due Diligence Report shall be independently verified before submission.(b) (1) The fashion seller shall make the Environmental Due Diligence Report available to the public on its internet website consistent with the open data principles contemporaneously with the submission of the report under subdivision (a).(2) If the fashion seller does not have an internet website, they shall provide a written disclosure within 30 days to any person that requests a copy of the Environmental Due Diligence Report.(c) The department and the state board shall review the Environmental Due Diligence Report under their respective jurisdiction for completeness. Article 3. Enforcement119520. (a) The department or the state board, as appropriate, shall identify and notify any fashion seller that fails to comply with Section 119513 and provide the noncompliant fashion seller with a 30-day grace period to file a complete Environmental Due Diligence Report as required by Section 119513.(b) If the fashion seller fails to file a complete Environmental Due Diligence Report within the time period specified in subdivision (a), the department or the state board, as appropriate, shall place the fashion seller on a publicly available list of noncompliant fashion sellers.(c) If the fashion seller fails to file a complete Environmental Due Diligence Report within three months of its due date, the department or the state board, as appropriate, may take an enforcement action pursuant to this article.119521. Except as provided in Section 119520, the department or state board, as appropriate, shall provide a notice of the noncompliance to a fashion seller that fails to comply with Section 38534 and this chapter and noncompliant fashion seller shall have three months from the date it receives the notice to meet the requirements of this chapter. 119522. (a) A fashion seller who violates this chapter shall be subject to a civil penalty of up to 2 percent of its annual revenues. Civil penalties collected pursuant to this section shall be deposited in the Fashion Environmental Remediation Fund.(b) In addition to subdivision (a), the department or the state board, as appropriate, may seek any appropriate equitable remedies for a violation of this chapter under their respective jurisdiction.119523. The department and the state board shall use a risk-based approach in enforcing this chapter and publish enforcement guidelines before the enforcement of this chapter. 119524. Any person may report a violation of this chapter to the department or the state board, as appropriate. Article 4. Fashion Environmental Remediation Fund119530. (a) The Fashion Environmental Remediation Fund is hereby established in the General Fund.(b) Moneys in the fund shall be available upon appropriation by the Legislature to the department or the state board for purposes of implementing this chapter and for purposes of implementing one or more environmental benefit projects or environmental remediation projects that directly and verifiably benefit communities directly impacted, to the extent feasible, at the location where the injury has occurred.(c) In addition to civil penalties specified in Section 119522, any other moneys appropriated by the Legislature for purposes of this chapter or for the implementation of environmental benefit projects shall be deposited in the fund. Article 5. Miscellaneous119535. The provisions of this chapter are severable. If any provision of this chapter or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
CHAPTER 10. Fashion Sellers
CHAPTER 10. Fashion Sellers
Article 1. General Provision119500. For purposes of this chapter, the following definitions shall apply:(a) Department means the Department of Toxic Substances Control.(b) Doing business in the state means engaging in transactions on a regular and continual basis within the state for financial or pecuniary gain or profit.(c) Environmental due diligence means the comprehensive process companies shall carry out to identify, cease, prevent, mitigate, account for, and remediate actual and potential adverse impacts to the environment in their own operations and in their supply chain, in compliance with, at a minimum, the standards outlined in the most recent Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises, and the most recent Organisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector. (d) Environmental Due Diligence Report means a document prepared by a fashion seller to communicate all relevant information concerning the existence, implementation, and outcomes of due diligence in order to comply with the requirements of this chapter, and to comply with any rules or regulations established pursuant to this chapter.(e) Fashion bag means flexible packaging made of textiles, leather or other animal products, woven material, or other similar materials intended for repeated use, including, when applicable, those produced as a private label.(f) Fashion goods means wearing apparel, footwear, or fashion bags.(g) Fashion seller means a business entity that does business in the state involving the sale of fashion goods in excess of one hundred million dollars ($100,000,000) in annual gross receipts. Fashion seller does not include fashion sellers that sell used fashion goods and does not include multibrand retailers, unless the total annual gross receipts of all of the private labels under the retailer exceeds one hundred million dollars ($100,000,000). (h) Footwear means any covering worn or intended to be worn on the foot, including, when applicable, those produced as a private label. (i) Fund means the Fashion Environmental Remediation Fund established pursuant to Section 119530.(j) (1) Gross receipts means the gross amounts realized on the sale or exchange of property, the performance of services, or the use of property or capital, including rents, royalties, interest, and dividends, in a transaction that produces business income. Amounts realized shall not be reduced by the cost of goods sold or the basis of property sold.(2) Gross receipts does not include the following:(A) Repayments, redemption, or maturity of the principal of a loan, mutual fund, or similar marketable instrument.(B) The principal amount received under a purchase agreement or other transaction properly characterized as a loan.(C) Proceeds from the issuance of the fashion sellers own stock.(D) Damages and other amounts received as a result of litigation.(E) Property acquired on behalf of another.(F) Tax refunds and other tax benefits received.(G) Pension reversions.(H) Contributions to capital.(I) Income from discharge of indebtedness.(J) Amounts realized from exchanges of inventory that are not recognized under Title 26 of the United States Code, or would not be recognized if the exchange occurred in the United States.(K) Amounts received from transactions in intangible assets held in connection with a treasury function of the taxpayers unitary business and the gross receipts and overall net gains from the maturity, redemption, sale, exchange, or other disposition of those assets.(L) Amounts received from hedging transactions involving intangible assets. A hedging transaction for this purpose means a transaction related to the taxpayers trading function involving futures and options transactions for the purpose of hedging price risks of the products or commodities consumed, produced, or sold by the taxpayer.(k) Independently verified means audited by a verification body accredited by the department or state board, as appropriate. (l) OECD means the Organisation for Economic Co-operation and Development.(m) Open data principles means data that can be freely used, reused, and redistributed by any person, that is findable or easily discoverable on an internet website or within a database, that is accessible or available in a machine-readable, convenient, modifiable form, that is published as a whole, complete dataset that is interoperable or able to be mixed with different data sets, and that is reusable or provided under an open license that permits reuse and redistribution, including the intermixing with other datasets.(n) Produced as a private label means produced under a name, label, or entity separate from the fashion seller, but that is sold by the fashion seller.(o) Risk-based approach means commensurate to the likelihood and severity of the harm. A risk-based approach includes, but is not limited to, prioritizing the order of action based on the likelihood and severity of harm, measured by the harms scale or gravity, scope, and irremediable character. (p) Significant supplier means suppliers representing 75 percent of fabric by volume.(q) State board means the State Air Resources Board.(r) Supply chain tiers means a four tier system consisting of the following:(1) Tier one means suppliers that produce finished goods for fashion sellers, including suppliers subcontractors, that provide services, including, but not limited to, sewing and embroidering.(2) Tier two means suppliers to tier one, including subcontractors, that provide services, including, but not limited to, knitting, weaving, washing, dyeing, finishing, printing for finished goods, and components and materials for finished goods if they are stand-alone operations and not integrated into tier one suppliers. Components for this purpose means materials used to create a product, including, but not limited to, buttons, zippers, rubber soles, down, and fusibles.(3) Tier three means suppliers to tier two suppliers, including subcontractors, that process raw materials, such as spinning.(4) Tier four means companies, including subcontractors, that supply raw materials to tier three suppliers.(s) Wearing apparel means any costume or article of clothing worn or intended to be worn by individuals.119501. (a) The department shall have jurisdiction over a fashion sellers environmental due diligence under this chapter pertaining to chemical management and wastewater testing.(b) The state board shall have jurisdiction over a fashion sellers environmental due diligence under Section 38534 and this chapter pertaining to emissions of greenhouse gases.119502. (a) (1) The department and the state board, as appropriate, may, separately or jointly, prescribe regulations necessary or appropriate to carry out the purposes of Section 38534 and this chapter under their respective jurisdiction.(2) In developing the regulations, the department and the state board shall minimize duplication of efforts in the reporting requirement by authorizing the submission of a due diligence report that is prepared to meet other national or international reporting requirements as a means of compliance with Section 119513, if the due diligence report meets the requirements of this chapter.(b) The department and the state board, as appropriate, shall develop and disseminate education materials to fashion sellers, including providing alerts to time-sensitive issues, emerging issues, and high-risk country situations, and assist fashion sellers in improving the quality of their due diligence.119503. The department and the state board shall, separately or jointly, develop an application process for accrediting entities to act as independent verifiers for purposes of this chapter. The process shall include, at minimum, all of the following:(a) Consideration of the qualifications of the applicants verification staff, including, but not limited to, their education, experience, and professional licenses.(b) A requirement that the applicant employ five full-time staff with expertise in the requirements they seek to verify under this chapter.(c) Consideration of whether the applicant has policies and mechanisms in place to prevent conflicts-of-interest and to identify and resolve potential conflict of interest situations, if they arise. The department shall require the applicant to provide at least the following information to make this consideration:(1) Identification of the services to be provided by the applicant, the industries that the applicant serves, and the locations where those services are provided.(2) A detailed organizational chart that includes the applicant, its management structure, and any related entities.(3) The applicants internal conflict-of-interest policy that identifies activities and limits to monetary or nonmonetary gifts that applies to all employees and procedures to monitor conflicts of interest.(d) Prohibition of a verifying entity that is accredited by the department or the state board pursuant to this chapter from providing services to any entity where a conflict of interest exists. Conflicts of interest include, but are not limited to, the following:(1) The verifying entity and the fashion seller being reviewed share any management staff or board of directors.(2) The senior management staff of the fashion seller being reviewed was an employee of the verifying entity within the previous five years, or vice versa.(3) Any employee of the verifying entity or a subcontractor who is a member of the verifying entitys team for the review of the fashion seller has provided the fashion seller with services related to verification within the previous five years.(4) Any employee of the verifying entity provides any type of nonmonetary incentive to a fashion seller to secure a verification contract.(5) Any additional criteria determined by the department or the state board.(e) A requirement that a verifying entity notify the department or the state board, as appropriate, within 30 calendar days if it no longer meets the requirements to be a verifying entity set forth by this section or by regulations adopted by the department or the state board under this section.
Article 1. General Provision
Article 1. General Provision
119500. For purposes of this chapter, the following definitions shall apply:(a) Department means the Department of Toxic Substances Control.(b) Doing business in the state means engaging in transactions on a regular and continual basis within the state for financial or pecuniary gain or profit.(c) Environmental due diligence means the comprehensive process companies shall carry out to identify, cease, prevent, mitigate, account for, and remediate actual and potential adverse impacts to the environment in their own operations and in their supply chain, in compliance with, at a minimum, the standards outlined in the most recent Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises, and the most recent Organisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector. (d) Environmental Due Diligence Report means a document prepared by a fashion seller to communicate all relevant information concerning the existence, implementation, and outcomes of due diligence in order to comply with the requirements of this chapter, and to comply with any rules or regulations established pursuant to this chapter.(e) Fashion bag means flexible packaging made of textiles, leather or other animal products, woven material, or other similar materials intended for repeated use, including, when applicable, those produced as a private label.(f) Fashion goods means wearing apparel, footwear, or fashion bags.(g) Fashion seller means a business entity that does business in the state involving the sale of fashion goods in excess of one hundred million dollars ($100,000,000) in annual gross receipts. Fashion seller does not include fashion sellers that sell used fashion goods and does not include multibrand retailers, unless the total annual gross receipts of all of the private labels under the retailer exceeds one hundred million dollars ($100,000,000). (h) Footwear means any covering worn or intended to be worn on the foot, including, when applicable, those produced as a private label. (i) Fund means the Fashion Environmental Remediation Fund established pursuant to Section 119530.(j) (1) Gross receipts means the gross amounts realized on the sale or exchange of property, the performance of services, or the use of property or capital, including rents, royalties, interest, and dividends, in a transaction that produces business income. Amounts realized shall not be reduced by the cost of goods sold or the basis of property sold.(2) Gross receipts does not include the following:(A) Repayments, redemption, or maturity of the principal of a loan, mutual fund, or similar marketable instrument.(B) The principal amount received under a purchase agreement or other transaction properly characterized as a loan.(C) Proceeds from the issuance of the fashion sellers own stock.(D) Damages and other amounts received as a result of litigation.(E) Property acquired on behalf of another.(F) Tax refunds and other tax benefits received.(G) Pension reversions.(H) Contributions to capital.(I) Income from discharge of indebtedness.(J) Amounts realized from exchanges of inventory that are not recognized under Title 26 of the United States Code, or would not be recognized if the exchange occurred in the United States.(K) Amounts received from transactions in intangible assets held in connection with a treasury function of the taxpayers unitary business and the gross receipts and overall net gains from the maturity, redemption, sale, exchange, or other disposition of those assets.(L) Amounts received from hedging transactions involving intangible assets. A hedging transaction for this purpose means a transaction related to the taxpayers trading function involving futures and options transactions for the purpose of hedging price risks of the products or commodities consumed, produced, or sold by the taxpayer.(k) Independently verified means audited by a verification body accredited by the department or state board, as appropriate. (l) OECD means the Organisation for Economic Co-operation and Development.(m) Open data principles means data that can be freely used, reused, and redistributed by any person, that is findable or easily discoverable on an internet website or within a database, that is accessible or available in a machine-readable, convenient, modifiable form, that is published as a whole, complete dataset that is interoperable or able to be mixed with different data sets, and that is reusable or provided under an open license that permits reuse and redistribution, including the intermixing with other datasets.(n) Produced as a private label means produced under a name, label, or entity separate from the fashion seller, but that is sold by the fashion seller.(o) Risk-based approach means commensurate to the likelihood and severity of the harm. A risk-based approach includes, but is not limited to, prioritizing the order of action based on the likelihood and severity of harm, measured by the harms scale or gravity, scope, and irremediable character. (p) Significant supplier means suppliers representing 75 percent of fabric by volume.(q) State board means the State Air Resources Board.(r) Supply chain tiers means a four tier system consisting of the following:(1) Tier one means suppliers that produce finished goods for fashion sellers, including suppliers subcontractors, that provide services, including, but not limited to, sewing and embroidering.(2) Tier two means suppliers to tier one, including subcontractors, that provide services, including, but not limited to, knitting, weaving, washing, dyeing, finishing, printing for finished goods, and components and materials for finished goods if they are stand-alone operations and not integrated into tier one suppliers. Components for this purpose means materials used to create a product, including, but not limited to, buttons, zippers, rubber soles, down, and fusibles.(3) Tier three means suppliers to tier two suppliers, including subcontractors, that process raw materials, such as spinning.(4) Tier four means companies, including subcontractors, that supply raw materials to tier three suppliers.(s) Wearing apparel means any costume or article of clothing worn or intended to be worn by individuals.
119500. For purposes of this chapter, the following definitions shall apply:
(a) Department means the Department of Toxic Substances Control.
(b) Doing business in the state means engaging in transactions on a regular and continual basis within the state for financial or pecuniary gain or profit.
(c) Environmental due diligence means the comprehensive process companies shall carry out to identify, cease, prevent, mitigate, account for, and remediate actual and potential adverse impacts to the environment in their own operations and in their supply chain, in compliance with, at a minimum, the standards outlined in the most recent Organisation for Economic Co-operation and Development Guidelines for Multinational Enterprises, and the most recent Organisation for Economic Co-operation and Development Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector.
(d) Environmental Due Diligence Report means a document prepared by a fashion seller to communicate all relevant information concerning the existence, implementation, and outcomes of due diligence in order to comply with the requirements of this chapter, and to comply with any rules or regulations established pursuant to this chapter.
(e) Fashion bag means flexible packaging made of textiles, leather or other animal products, woven material, or other similar materials intended for repeated use, including, when applicable, those produced as a private label.
(f) Fashion goods means wearing apparel, footwear, or fashion bags.
(g) Fashion seller means a business entity that does business in the state involving the sale of fashion goods in excess of one hundred million dollars ($100,000,000) in annual gross receipts. Fashion seller does not include fashion sellers that sell used fashion goods and does not include multibrand retailers, unless the total annual gross receipts of all of the private labels under the retailer exceeds one hundred million dollars ($100,000,000).
(h) Footwear means any covering worn or intended to be worn on the foot, including, when applicable, those produced as a private label.
(i) Fund means the Fashion Environmental Remediation Fund established pursuant to Section 119530.
(j) (1) Gross receipts means the gross amounts realized on the sale or exchange of property, the performance of services, or the use of property or capital, including rents, royalties, interest, and dividends, in a transaction that produces business income. Amounts realized shall not be reduced by the cost of goods sold or the basis of property sold.
(2) Gross receipts does not include the following:
(A) Repayments, redemption, or maturity of the principal of a loan, mutual fund, or similar marketable instrument.
(B) The principal amount received under a purchase agreement or other transaction properly characterized as a loan.
(C) Proceeds from the issuance of the fashion sellers own stock.
(D) Damages and other amounts received as a result of litigation.
(E) Property acquired on behalf of another.
(F) Tax refunds and other tax benefits received.
(G) Pension reversions.
(H) Contributions to capital.
(I) Income from discharge of indebtedness.
(J) Amounts realized from exchanges of inventory that are not recognized under Title 26 of the United States Code, or would not be recognized if the exchange occurred in the United States.
(K) Amounts received from transactions in intangible assets held in connection with a treasury function of the taxpayers unitary business and the gross receipts and overall net gains from the maturity, redemption, sale, exchange, or other disposition of those assets.
(L) Amounts received from hedging transactions involving intangible assets. A hedging transaction for this purpose means a transaction related to the taxpayers trading function involving futures and options transactions for the purpose of hedging price risks of the products or commodities consumed, produced, or sold by the taxpayer.
(k) Independently verified means audited by a verification body accredited by the department or state board, as appropriate.
(l) OECD means the Organisation for Economic Co-operation and Development.
(m) Open data principles means data that can be freely used, reused, and redistributed by any person, that is findable or easily discoverable on an internet website or within a database, that is accessible or available in a machine-readable, convenient, modifiable form, that is published as a whole, complete dataset that is interoperable or able to be mixed with different data sets, and that is reusable or provided under an open license that permits reuse and redistribution, including the intermixing with other datasets.
(n) Produced as a private label means produced under a name, label, or entity separate from the fashion seller, but that is sold by the fashion seller.
(o) Risk-based approach means commensurate to the likelihood and severity of the harm. A risk-based approach includes, but is not limited to, prioritizing the order of action based on the likelihood and severity of harm, measured by the harms scale or gravity, scope, and irremediable character.
(p) Significant supplier means suppliers representing 75 percent of fabric by volume.
(q) State board means the State Air Resources Board.
(r) Supply chain tiers means a four tier system consisting of the following:
(1) Tier one means suppliers that produce finished goods for fashion sellers, including suppliers subcontractors, that provide services, including, but not limited to, sewing and embroidering.
(2) Tier two means suppliers to tier one, including subcontractors, that provide services, including, but not limited to, knitting, weaving, washing, dyeing, finishing, printing for finished goods, and components and materials for finished goods if they are stand-alone operations and not integrated into tier one suppliers. Components for this purpose means materials used to create a product, including, but not limited to, buttons, zippers, rubber soles, down, and fusibles.
(3) Tier three means suppliers to tier two suppliers, including subcontractors, that process raw materials, such as spinning.
(4) Tier four means companies, including subcontractors, that supply raw materials to tier three suppliers.
(s) Wearing apparel means any costume or article of clothing worn or intended to be worn by individuals.
119501. (a) The department shall have jurisdiction over a fashion sellers environmental due diligence under this chapter pertaining to chemical management and wastewater testing.(b) The state board shall have jurisdiction over a fashion sellers environmental due diligence under Section 38534 and this chapter pertaining to emissions of greenhouse gases.
119501. (a) The department shall have jurisdiction over a fashion sellers environmental due diligence under this chapter pertaining to chemical management and wastewater testing.
(b) The state board shall have jurisdiction over a fashion sellers environmental due diligence under Section 38534 and this chapter pertaining to emissions of greenhouse gases.
119502. (a) (1) The department and the state board, as appropriate, may, separately or jointly, prescribe regulations necessary or appropriate to carry out the purposes of Section 38534 and this chapter under their respective jurisdiction.(2) In developing the regulations, the department and the state board shall minimize duplication of efforts in the reporting requirement by authorizing the submission of a due diligence report that is prepared to meet other national or international reporting requirements as a means of compliance with Section 119513, if the due diligence report meets the requirements of this chapter.(b) The department and the state board, as appropriate, shall develop and disseminate education materials to fashion sellers, including providing alerts to time-sensitive issues, emerging issues, and high-risk country situations, and assist fashion sellers in improving the quality of their due diligence.
119502. (a) (1) The department and the state board, as appropriate, may, separately or jointly, prescribe regulations necessary or appropriate to carry out the purposes of Section 38534 and this chapter under their respective jurisdiction.
(2) In developing the regulations, the department and the state board shall minimize duplication of efforts in the reporting requirement by authorizing the submission of a due diligence report that is prepared to meet other national or international reporting requirements as a means of compliance with Section 119513, if the due diligence report meets the requirements of this chapter.
(b) The department and the state board, as appropriate, shall develop and disseminate education materials to fashion sellers, including providing alerts to time-sensitive issues, emerging issues, and high-risk country situations, and assist fashion sellers in improving the quality of their due diligence.
119503. The department and the state board shall, separately or jointly, develop an application process for accrediting entities to act as independent verifiers for purposes of this chapter. The process shall include, at minimum, all of the following:(a) Consideration of the qualifications of the applicants verification staff, including, but not limited to, their education, experience, and professional licenses.(b) A requirement that the applicant employ five full-time staff with expertise in the requirements they seek to verify under this chapter.(c) Consideration of whether the applicant has policies and mechanisms in place to prevent conflicts-of-interest and to identify and resolve potential conflict of interest situations, if they arise. The department shall require the applicant to provide at least the following information to make this consideration:(1) Identification of the services to be provided by the applicant, the industries that the applicant serves, and the locations where those services are provided.(2) A detailed organizational chart that includes the applicant, its management structure, and any related entities.(3) The applicants internal conflict-of-interest policy that identifies activities and limits to monetary or nonmonetary gifts that applies to all employees and procedures to monitor conflicts of interest.(d) Prohibition of a verifying entity that is accredited by the department or the state board pursuant to this chapter from providing services to any entity where a conflict of interest exists. Conflicts of interest include, but are not limited to, the following:(1) The verifying entity and the fashion seller being reviewed share any management staff or board of directors.(2) The senior management staff of the fashion seller being reviewed was an employee of the verifying entity within the previous five years, or vice versa.(3) Any employee of the verifying entity or a subcontractor who is a member of the verifying entitys team for the review of the fashion seller has provided the fashion seller with services related to verification within the previous five years.(4) Any employee of the verifying entity provides any type of nonmonetary incentive to a fashion seller to secure a verification contract.(5) Any additional criteria determined by the department or the state board.(e) A requirement that a verifying entity notify the department or the state board, as appropriate, within 30 calendar days if it no longer meets the requirements to be a verifying entity set forth by this section or by regulations adopted by the department or the state board under this section.
119503. The department and the state board shall, separately or jointly, develop an application process for accrediting entities to act as independent verifiers for purposes of this chapter. The process shall include, at minimum, all of the following:
(a) Consideration of the qualifications of the applicants verification staff, including, but not limited to, their education, experience, and professional licenses.
(b) A requirement that the applicant employ five full-time staff with expertise in the requirements they seek to verify under this chapter.
(c) Consideration of whether the applicant has policies and mechanisms in place to prevent conflicts-of-interest and to identify and resolve potential conflict of interest situations, if they arise. The department shall require the applicant to provide at least the following information to make this consideration:
(1) Identification of the services to be provided by the applicant, the industries that the applicant serves, and the locations where those services are provided.
(2) A detailed organizational chart that includes the applicant, its management structure, and any related entities.
(3) The applicants internal conflict-of-interest policy that identifies activities and limits to monetary or nonmonetary gifts that applies to all employees and procedures to monitor conflicts of interest.
(d) Prohibition of a verifying entity that is accredited by the department or the state board pursuant to this chapter from providing services to any entity where a conflict of interest exists. Conflicts of interest include, but are not limited to, the following:
(1) The verifying entity and the fashion seller being reviewed share any management staff or board of directors.
(2) The senior management staff of the fashion seller being reviewed was an employee of the verifying entity within the previous five years, or vice versa.
(3) Any employee of the verifying entity or a subcontractor who is a member of the verifying entitys team for the review of the fashion seller has provided the fashion seller with services related to verification within the previous five years.
(4) Any employee of the verifying entity provides any type of nonmonetary incentive to a fashion seller to secure a verification contract.
(5) Any additional criteria determined by the department or the state board.
(e) A requirement that a verifying entity notify the department or the state board, as appropriate, within 30 calendar days if it no longer meets the requirements to be a verifying entity set forth by this section or by regulations adopted by the department or the state board under this section.
Article 2. Environmental Due Diligence119510. (a) Every fashion sellers shall carry out effective environmental due diligence, consistent with this chapter, for the portions of their business related to fashion goods, including, but not limited to, those items produced as a private label.(b) (1) Environmental due diligence required under this article shall include a fashion seller taking a risk-based approach and implementing good faith efforts to map suppliers as follows:(A) No later than January 1, 2027, tier one suppliers shall be disclosed, and contain at least 80 percent of suppliers by volume.(B) No later than January 1, 2028, tier two suppliers shall be disclosed, and contain at least 75 percent of suppliers by volume.(C) No later than January 1, 2030, tier three suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.(D) No later than January 1, 2032, tier four suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.(2) Supplier disclosure for all tiers shall include the name, address, parent company, and product type.119511. In carrying out its environmental due diligence under this article, a fashion seller shall comply with the environmental guidelines of OECDs Guidelines for Multinational Enterprises on Responsible Business Conduct and OECDs Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector that, at a minimum, require a fashion seller to do all of the following:(a) Embed responsible business conduct in the fashion sellers policies and management systems.(b) Identify areas of significant risks of societal and ecological harm from its own activities and its supply chain relationships.(c) Identify, prioritize, and assess the significant potential and actual adverse impacts of those risks.(d) Cease, prevent, or mitigate those risks, including, but not limited to, all of the following:(1) Taking actions specified in Sections 38534 and 119512.(2) Using responsible exit or disengagement strategies.(3) Consulting and engaging with impacted and potentially impacted stakeholders and rights holders and their representatives.(e) Tracking the implementation of activities to cease, prevent, and mitigate risks and the result of those activities.(f) Provision for, or cooperating in, the remediation of adverse environmental impacts resulting from the fashion sellers or its suppliers operation.119512. (a) (1) By January 1, 2028, in accordance with internationally recognized methodologies for chemical management and wastewater testing, a fashion seller shall require all of its significant tier 2 dyeing, finishing, printing, and garment washing suppliers to do all of the following: (A) Sample and annually report to the fashion seller on wastewater chemical concentrations and water usage.(B) Report on chemical inventory.(C) Provide evidence that the supplier is in compliance with local chemical management laws.(2) For a significant supplier that uses indirect wastewater management, a fashion seller shall report all of the following:(A) The chemical concentrations of the wastewater treatment facilities.(B) The percentage of significant suppliers that have a chemical remediation plan for wastewater in place.(C) Actions taken by the fashion seller to remediate wastewater.(b) On and after January 1, 2029, a fashion seller is deemed to be in violation of this section if its significant tier 2 dyeing, finishing, printing, and garment washing suppliers fail to make adequate progress in the remediation of hazardous chemical concentration in wastewater.(c) Reports required pursuant to this section shall be independently verified.(d) Information provided to the fashion seller pursuant to this section shall be reported as a part of its Environmental Due Diligence Report required by Section 119513.119513. (a) (1) Beginning July 1, 2027, and annually thereafter, a fashion seller shall develop and submit to the department and the state board an Environmental Due Diligence Report pertaining to the effective environmental due diligence performed by the fashion seller for the prior calendar year, including activities and financial expenditures to support supply chain environmental due diligence for review by the department and the state board, as appropriate. The report shall also include the fashion sellers annual volume of material produced including a breakdown by material type.(2) The information specified in the Environmental Due Diligence Report shall be independently verified before submission.(b) (1) The fashion seller shall make the Environmental Due Diligence Report available to the public on its internet website consistent with the open data principles contemporaneously with the submission of the report under subdivision (a).(2) If the fashion seller does not have an internet website, they shall provide a written disclosure within 30 days to any person that requests a copy of the Environmental Due Diligence Report.(c) The department and the state board shall review the Environmental Due Diligence Report under their respective jurisdiction for completeness.
Article 2. Environmental Due Diligence
Article 2. Environmental Due Diligence
119510. (a) Every fashion sellers shall carry out effective environmental due diligence, consistent with this chapter, for the portions of their business related to fashion goods, including, but not limited to, those items produced as a private label.(b) (1) Environmental due diligence required under this article shall include a fashion seller taking a risk-based approach and implementing good faith efforts to map suppliers as follows:(A) No later than January 1, 2027, tier one suppliers shall be disclosed, and contain at least 80 percent of suppliers by volume.(B) No later than January 1, 2028, tier two suppliers shall be disclosed, and contain at least 75 percent of suppliers by volume.(C) No later than January 1, 2030, tier three suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.(D) No later than January 1, 2032, tier four suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.(2) Supplier disclosure for all tiers shall include the name, address, parent company, and product type.
119510. (a) Every fashion sellers shall carry out effective environmental due diligence, consistent with this chapter, for the portions of their business related to fashion goods, including, but not limited to, those items produced as a private label.
(b) (1) Environmental due diligence required under this article shall include a fashion seller taking a risk-based approach and implementing good faith efforts to map suppliers as follows:
(A) No later than January 1, 2027, tier one suppliers shall be disclosed, and contain at least 80 percent of suppliers by volume.
(B) No later than January 1, 2028, tier two suppliers shall be disclosed, and contain at least 75 percent of suppliers by volume.
(C) No later than January 1, 2030, tier three suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.
(D) No later than January 1, 2032, tier four suppliers shall be disclosed, and contain at least 50 percent of suppliers by volume or dollar value.
(2) Supplier disclosure for all tiers shall include the name, address, parent company, and product type.
119511. In carrying out its environmental due diligence under this article, a fashion seller shall comply with the environmental guidelines of OECDs Guidelines for Multinational Enterprises on Responsible Business Conduct and OECDs Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector that, at a minimum, require a fashion seller to do all of the following:(a) Embed responsible business conduct in the fashion sellers policies and management systems.(b) Identify areas of significant risks of societal and ecological harm from its own activities and its supply chain relationships.(c) Identify, prioritize, and assess the significant potential and actual adverse impacts of those risks.(d) Cease, prevent, or mitigate those risks, including, but not limited to, all of the following:(1) Taking actions specified in Sections 38534 and 119512.(2) Using responsible exit or disengagement strategies.(3) Consulting and engaging with impacted and potentially impacted stakeholders and rights holders and their representatives.(e) Tracking the implementation of activities to cease, prevent, and mitigate risks and the result of those activities.(f) Provision for, or cooperating in, the remediation of adverse environmental impacts resulting from the fashion sellers or its suppliers operation.
119511. In carrying out its environmental due diligence under this article, a fashion seller shall comply with the environmental guidelines of OECDs Guidelines for Multinational Enterprises on Responsible Business Conduct and OECDs Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector that, at a minimum, require a fashion seller to do all of the following:
(a) Embed responsible business conduct in the fashion sellers policies and management systems.
(b) Identify areas of significant risks of societal and ecological harm from its own activities and its supply chain relationships.
(c) Identify, prioritize, and assess the significant potential and actual adverse impacts of those risks.
(d) Cease, prevent, or mitigate those risks, including, but not limited to, all of the following:
(1) Taking actions specified in Sections 38534 and 119512.
(2) Using responsible exit or disengagement strategies.
(3) Consulting and engaging with impacted and potentially impacted stakeholders and rights holders and their representatives.
(e) Tracking the implementation of activities to cease, prevent, and mitigate risks and the result of those activities.
(f) Provision for, or cooperating in, the remediation of adverse environmental impacts resulting from the fashion sellers or its suppliers operation.
119512. (a) (1) By January 1, 2028, in accordance with internationally recognized methodologies for chemical management and wastewater testing, a fashion seller shall require all of its significant tier 2 dyeing, finishing, printing, and garment washing suppliers to do all of the following: (A) Sample and annually report to the fashion seller on wastewater chemical concentrations and water usage.(B) Report on chemical inventory.(C) Provide evidence that the supplier is in compliance with local chemical management laws.(2) For a significant supplier that uses indirect wastewater management, a fashion seller shall report all of the following:(A) The chemical concentrations of the wastewater treatment facilities.(B) The percentage of significant suppliers that have a chemical remediation plan for wastewater in place.(C) Actions taken by the fashion seller to remediate wastewater.(b) On and after January 1, 2029, a fashion seller is deemed to be in violation of this section if its significant tier 2 dyeing, finishing, printing, and garment washing suppliers fail to make adequate progress in the remediation of hazardous chemical concentration in wastewater.(c) Reports required pursuant to this section shall be independently verified.(d) Information provided to the fashion seller pursuant to this section shall be reported as a part of its Environmental Due Diligence Report required by Section 119513.
119512. (a) (1) By January 1, 2028, in accordance with internationally recognized methodologies for chemical management and wastewater testing, a fashion seller shall require all of its significant tier 2 dyeing, finishing, printing, and garment washing suppliers to do all of the following:
(A) Sample and annually report to the fashion seller on wastewater chemical concentrations and water usage.
(B) Report on chemical inventory.
(C) Provide evidence that the supplier is in compliance with local chemical management laws.
(2) For a significant supplier that uses indirect wastewater management, a fashion seller shall report all of the following:
(A) The chemical concentrations of the wastewater treatment facilities.
(B) The percentage of significant suppliers that have a chemical remediation plan for wastewater in place.
(C) Actions taken by the fashion seller to remediate wastewater.
(b) On and after January 1, 2029, a fashion seller is deemed to be in violation of this section if its significant tier 2 dyeing, finishing, printing, and garment washing suppliers fail to make adequate progress in the remediation of hazardous chemical concentration in wastewater.
(c) Reports required pursuant to this section shall be independently verified.
(d) Information provided to the fashion seller pursuant to this section shall be reported as a part of its Environmental Due Diligence Report required by Section 119513.
119513. (a) (1) Beginning July 1, 2027, and annually thereafter, a fashion seller shall develop and submit to the department and the state board an Environmental Due Diligence Report pertaining to the effective environmental due diligence performed by the fashion seller for the prior calendar year, including activities and financial expenditures to support supply chain environmental due diligence for review by the department and the state board, as appropriate. The report shall also include the fashion sellers annual volume of material produced including a breakdown by material type.(2) The information specified in the Environmental Due Diligence Report shall be independently verified before submission.(b) (1) The fashion seller shall make the Environmental Due Diligence Report available to the public on its internet website consistent with the open data principles contemporaneously with the submission of the report under subdivision (a).(2) If the fashion seller does not have an internet website, they shall provide a written disclosure within 30 days to any person that requests a copy of the Environmental Due Diligence Report.(c) The department and the state board shall review the Environmental Due Diligence Report under their respective jurisdiction for completeness.
119513. (a) (1) Beginning July 1, 2027, and annually thereafter, a fashion seller shall develop and submit to the department and the state board an Environmental Due Diligence Report pertaining to the effective environmental due diligence performed by the fashion seller for the prior calendar year, including activities and financial expenditures to support supply chain environmental due diligence for review by the department and the state board, as appropriate. The report shall also include the fashion sellers annual volume of material produced including a breakdown by material type.
(2) The information specified in the Environmental Due Diligence Report shall be independently verified before submission.
(b) (1) The fashion seller shall make the Environmental Due Diligence Report available to the public on its internet website consistent with the open data principles contemporaneously with the submission of the report under subdivision (a).
(2) If the fashion seller does not have an internet website, they shall provide a written disclosure within 30 days to any person that requests a copy of the Environmental Due Diligence Report.
(c) The department and the state board shall review the Environmental Due Diligence Report under their respective jurisdiction for completeness.
Article 3. Enforcement119520. (a) The department or the state board, as appropriate, shall identify and notify any fashion seller that fails to comply with Section 119513 and provide the noncompliant fashion seller with a 30-day grace period to file a complete Environmental Due Diligence Report as required by Section 119513.(b) If the fashion seller fails to file a complete Environmental Due Diligence Report within the time period specified in subdivision (a), the department or the state board, as appropriate, shall place the fashion seller on a publicly available list of noncompliant fashion sellers.(c) If the fashion seller fails to file a complete Environmental Due Diligence Report within three months of its due date, the department or the state board, as appropriate, may take an enforcement action pursuant to this article.119521. Except as provided in Section 119520, the department or state board, as appropriate, shall provide a notice of the noncompliance to a fashion seller that fails to comply with Section 38534 and this chapter and noncompliant fashion seller shall have three months from the date it receives the notice to meet the requirements of this chapter. 119522. (a) A fashion seller who violates this chapter shall be subject to a civil penalty of up to 2 percent of its annual revenues. Civil penalties collected pursuant to this section shall be deposited in the Fashion Environmental Remediation Fund.(b) In addition to subdivision (a), the department or the state board, as appropriate, may seek any appropriate equitable remedies for a violation of this chapter under their respective jurisdiction.119523. The department and the state board shall use a risk-based approach in enforcing this chapter and publish enforcement guidelines before the enforcement of this chapter. 119524. Any person may report a violation of this chapter to the department or the state board, as appropriate.
Article 3. Enforcement
Article 3. Enforcement
119520. (a) The department or the state board, as appropriate, shall identify and notify any fashion seller that fails to comply with Section 119513 and provide the noncompliant fashion seller with a 30-day grace period to file a complete Environmental Due Diligence Report as required by Section 119513.(b) If the fashion seller fails to file a complete Environmental Due Diligence Report within the time period specified in subdivision (a), the department or the state board, as appropriate, shall place the fashion seller on a publicly available list of noncompliant fashion sellers.(c) If the fashion seller fails to file a complete Environmental Due Diligence Report within three months of its due date, the department or the state board, as appropriate, may take an enforcement action pursuant to this article.
119520. (a) The department or the state board, as appropriate, shall identify and notify any fashion seller that fails to comply with Section 119513 and provide the noncompliant fashion seller with a 30-day grace period to file a complete Environmental Due Diligence Report as required by Section 119513.
(b) If the fashion seller fails to file a complete Environmental Due Diligence Report within the time period specified in subdivision (a), the department or the state board, as appropriate, shall place the fashion seller on a publicly available list of noncompliant fashion sellers.
(c) If the fashion seller fails to file a complete Environmental Due Diligence Report within three months of its due date, the department or the state board, as appropriate, may take an enforcement action pursuant to this article.
119521. Except as provided in Section 119520, the department or state board, as appropriate, shall provide a notice of the noncompliance to a fashion seller that fails to comply with Section 38534 and this chapter and noncompliant fashion seller shall have three months from the date it receives the notice to meet the requirements of this chapter.
119521. Except as provided in Section 119520, the department or state board, as appropriate, shall provide a notice of the noncompliance to a fashion seller that fails to comply with Section 38534 and this chapter and noncompliant fashion seller shall have three months from the date it receives the notice to meet the requirements of this chapter.
119522. (a) A fashion seller who violates this chapter shall be subject to a civil penalty of up to 2 percent of its annual revenues. Civil penalties collected pursuant to this section shall be deposited in the Fashion Environmental Remediation Fund.(b) In addition to subdivision (a), the department or the state board, as appropriate, may seek any appropriate equitable remedies for a violation of this chapter under their respective jurisdiction.
119522. (a) A fashion seller who violates this chapter shall be subject to a civil penalty of up to 2 percent of its annual revenues. Civil penalties collected pursuant to this section shall be deposited in the Fashion Environmental Remediation Fund.
(b) In addition to subdivision (a), the department or the state board, as appropriate, may seek any appropriate equitable remedies for a violation of this chapter under their respective jurisdiction.
119523. The department and the state board shall use a risk-based approach in enforcing this chapter and publish enforcement guidelines before the enforcement of this chapter.
119523. The department and the state board shall use a risk-based approach in enforcing this chapter and publish enforcement guidelines before the enforcement of this chapter.
119524. Any person may report a violation of this chapter to the department or the state board, as appropriate.
119524. Any person may report a violation of this chapter to the department or the state board, as appropriate.
Article 4. Fashion Environmental Remediation Fund119530. (a) The Fashion Environmental Remediation Fund is hereby established in the General Fund.(b) Moneys in the fund shall be available upon appropriation by the Legislature to the department or the state board for purposes of implementing this chapter and for purposes of implementing one or more environmental benefit projects or environmental remediation projects that directly and verifiably benefit communities directly impacted, to the extent feasible, at the location where the injury has occurred.(c) In addition to civil penalties specified in Section 119522, any other moneys appropriated by the Legislature for purposes of this chapter or for the implementation of environmental benefit projects shall be deposited in the fund.
Article 4. Fashion Environmental Remediation Fund
Article 4. Fashion Environmental Remediation Fund
119530. (a) The Fashion Environmental Remediation Fund is hereby established in the General Fund.(b) Moneys in the fund shall be available upon appropriation by the Legislature to the department or the state board for purposes of implementing this chapter and for purposes of implementing one or more environmental benefit projects or environmental remediation projects that directly and verifiably benefit communities directly impacted, to the extent feasible, at the location where the injury has occurred.(c) In addition to civil penalties specified in Section 119522, any other moneys appropriated by the Legislature for purposes of this chapter or for the implementation of environmental benefit projects shall be deposited in the fund.
119530. (a) The Fashion Environmental Remediation Fund is hereby established in the General Fund.
(b) Moneys in the fund shall be available upon appropriation by the Legislature to the department or the state board for purposes of implementing this chapter and for purposes of implementing one or more environmental benefit projects or environmental remediation projects that directly and verifiably benefit communities directly impacted, to the extent feasible, at the location where the injury has occurred.
(c) In addition to civil penalties specified in Section 119522, any other moneys appropriated by the Legislature for purposes of this chapter or for the implementation of environmental benefit projects shall be deposited in the fund.
Article 5. Miscellaneous119535. The provisions of this chapter are severable. If any provision of this chapter or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
Article 5. Miscellaneous
Article 5. Miscellaneous
119535. The provisions of this chapter are severable. If any provision of this chapter or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
119535. The provisions of this chapter are severable. If any provision of this chapter or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.