Existing law requires a manufacturer of carpets sold in this state to submit, either individually or through a carpet stewardship organization, a carpet stewardship plan that meets specified requirements to the Department of Resources Recycling and Recovery. Existing law imposes a carpet stewardship assessment per unit of carpet sold in the state that is remitted to the carpet stewardship organization and may be expended to carry out the organizations carpet stewardship plan. Existing law provides that the purpose of carpet stewardship laws is to increase the amount of postconsumer carpet that is diverted from landfills and recycled into secondary products or otherwise managed in a manner that is consistent with the states hierarchy for waste management practices. Existing law requires a carpet stewardship organization, in order to achieve compliance with the carpet stewardship laws, to demonstrate to the department that it has achieved continuous meaningful improvement in the rates of recycling and diversion of postconsumer carpet subject to its stewardship plan and in meeting the other specified goals included in the organizations plan.

This bill would provide that it is the goal of the state to reach a 24% recycling rate for postconsumer carpet by January 1, 2020, and to meet or exceed that rate continually thereafter. The bill would require a carpet stewardship plan to achieve a 24% recycling rate for postconsumer carpet by January 1, 2020, and to include quantifiable 5-year goals and annual goals, as specified. The bill would require a carpet stewardship plan to achieve any other recycling rate, and include goals, that the department required after plan review. The bill would require a review no sooner than January 1, 2020, and no less frequently than every 3 years thereafter and would authorize adjustments to the recycling rate and program goals by the department upon each review. The bill would require a carpet stewardship organization to provide to the department all data necessary for the department to evaluate the effectiveness of the program as it is described in the carpet stewardship plan and in annual reports submitted by the carpet stewardship organization. If a carpet stewardship plan that was previously approved by the department terminates or is revoked, the bill would authorize the department to allow a manufacturer that is no longer subject to the plan to continue to sell carpet in California for a period of one year after the plan terminates or is revoked, without being subject to penalties, if the manufacturer meets either of 2 requirements. The bill would revise the criteria that a carpet stewardship organization is required to meet in order to achieve compliance with the carpet stewardship laws. The bill would prohibit a carpet stewardship organization from expending funds from the carpet stewardship assessment for specified costs and penalties, including for engineered solid waste conversion, as defined, the use of cement kilns to burn carpet, or transformation, as defined.

The bill would create an advisory committee that would be required to provide comments and recommendations on carpet stewardship plans, amendments to plans, and annual reports. The bill would require the carpet stewardship organization or manufacturer to incorporate those recommendations to the extent feasible. The bill would require the Director of Resources Recycling and Recovery, the Speaker of the Assembly, and the Senate Committee on Rules to appoint members to the advisory committee, as specified.

Existing law requires the Department of General Services, to the extent feasible and within existing resources, to take appropriate steps, including, but not limited to, revising relevant procurement rules, to ensure that postconsumer carpet that is removed from state buildings is managed in a manner consistent with the purpose of the carpet stewardship laws.

This bill would require the Department of General Services to additionally ensure, under those same conditions, that carpet purchased by a state agency contains a minimum amount of postconsumer content that would be determined by the Department of General Services and published in the State Contracting Manual by July 1, 2018.

Existing law defines carpet for purposes of these laws to mean a manufactured article that is used in commercial or residential buildings affixed or placed on the floor or building walking surface as a decorative or functional building interior feature and that is primarily constructed of a top visible surface of synthetic face fibers or yarns or tufts attached to a backing system derived from synthetic or natural materials.

This bill would expand the carpet stewardship program by revising the definition of carpet to include manufactured items that meet those same descriptions, but that are primarily constructed of a top visible surface of natural face fibers, yarns, or tufts.

Existing law requires a manufacturer of carpets sold in this state to submit, either individually or through a carpet stewardship organization, a carpet stewardship plan that meets specified requirements to the Department of Resources Recycling and Recovery. Existing law imposes a carpet stewardship assessment per unit of carpet sold in the state that is remitted to the carpet stewardship organization and may be expended to carry out the organizations carpet stewardship plan. Existing law provides that the purpose of carpet stewardship laws is to increase the amount of postconsumer carpet that is diverted from landfills and recycled into secondary products or otherwise managed in a manner that is consistent with the states hierarchy for waste management practices. Existing law requires a carpet stewardship organization, in order to achieve compliance with the carpet stewardship laws, to demonstrate to the department that it has achieved continuous meaningful improvement in the rates of recycling and diversion of postconsumer carpet subject to its stewardship plan and in meeting the other specified goals included in the organizations plan.

This bill would provide that it is the goal of the state to reach a 24% recycling rate for postconsumer carpet by January 1, 2020, and to meet or exceed that rate continually thereafter. The bill would require a carpet stewardship plan to achieve a 24% recycling rate for postconsumer carpet by January 1, 2020, and to include quantifiable 5-year goals and annual goals, as specified. The bill would require a carpet stewardship plan to achieve any other recycling rate, and include goals, that the department required after plan review. The bill would require a review no sooner than January 1, 2020, and no less frequently than every 3 years thereafter and would authorize adjustments to the recycling rate and program goals by the department upon each review. The bill would require a carpet stewardship organization to provide to the department all data necessary for the department to evaluate the effectiveness of the program as it is described in the carpet stewardship plan and in annual reports submitted by the carpet stewardship organization. If a carpet stewardship plan that was previously approved by the department terminates or is revoked, the bill would authorize the department to allow a manufacturer that is no longer subject to the plan to continue to sell carpet in California for a period of one year after the plan terminates or is revoked, without being subject to penalties, if the manufacturer meets either of 2 requirements. The bill would revise the criteria that a carpet stewardship organization is required to meet in order to achieve compliance with the carpet stewardship laws. The bill would prohibit a carpet stewardship organization from expending funds from the carpet stewardship assessment for specified costs and penalties, including for engineered solid waste conversion, as defined, the use of cement kilns to burn carpet, or transformation, as defined.

The bill would create an advisory committee that would be required to provide comments and recommendations on carpet stewardship plans, amendments to plans, and annual reports. The bill would require the carpet stewardship organization or manufacturer to incorporate those recommendations to the extent feasible. The bill would require the Director of Resources Recycling and Recovery, the Speaker of the Assembly, and the Senate Committee on Rules to appoint members to the advisory committee, as specified.

Existing law requires the Department of General Services, to the extent feasible and within existing resources, to take appropriate steps, including, but not limited to, revising relevant procurement rules, to ensure that postconsumer carpet that is removed from state buildings is managed in a manner consistent with the purpose of the carpet stewardship laws.

This bill would require the Department of General Services to additionally ensure, under those same conditions, that carpet purchased by a state agency contains a minimum amount of postconsumer content that would be determined by the Department of General Services and published in the State Contracting Manual by July 1, 2018.

Existing law defines carpet for purposes of these laws to mean a manufactured article that is used in commercial or residential buildings affixed or placed on the floor or building walking surface as a decorative or functional building interior feature and that is primarily constructed of a top visible surface of synthetic face fibers or yarns or tufts attached to a backing system derived from synthetic or natural materials.

This bill would expand the carpet stewardship program by revising the definition of carpet to include manufactured items that meet those same descriptions, but that are primarily constructed of a top visible surface of natural face fibers, yarns, or tufts.

Existing law requires a manufacturer of carpets sold in this state to submit, either individually or through a carpet stewardship organization, a carpet stewardship plan that meets specified requirements to the Department of Resources Recycling and Recovery. Existing law imposes a carpet stewardship assessment per unit of carpet sold in the state that is remitted to the carpet stewardship organization and may be expended to carry out the organizations carpet stewardship plan. Existing law provides that the purpose of carpet stewardship laws is to increase the amount of postconsumer carpet that is diverted from landfills and recycled into secondary products or otherwise managed in a manner that is consistent with the states hierarchy for waste management practices. Existing law requires a carpet stewardship organization, in order to achieve compliance with the carpet stewardship laws, to demonstrate to the department that it has achieved continuous meaningful improvement in the rates of recycling and diversion of postconsumer carpet subject to its stewardship plan and in meeting the other specified goals included in the organizations plan.

This bill would provide that it is the goal of the state to reach a 24% recycling rate for postconsumer carpet by January 1, 2020, and to meet or exceed that rate continually thereafter. The bill would require the department, on or before January 1, 2023, to establish a minimum postconsumer carpet recycling rate requirement. The bill would create an advisory committee that would be required to make recommendations to manufacturers and carpet stewardship organizations on carpet stewardship plans. The bill would require the Director of Resources Recycling and Recovery, the Speaker of the Assembly, and the Senate Rules Committee to appoint members to the advisory committee, as specified. The bill would require a carpet stewardship plan to achieve a 24% recycling rate for postconsumer carpet by January 1, 2020, and to include quantifiable 5-year goals and annual goals, as specified. The bill would require a carpet stewardship plan to achieve any other recycling rate, and include goals, that the department required after plan review. The bill would require a review no sooner than January 1, 2020, and no less frequently than every 3 years thereafter and would authorize adjustments to the recycling rate and program goals by the department upon each review. The bill would require a carpet stewardship organization to provide to the department all data necessary for the department to evaluate the effectiveness of the program as it is described in the carpet stewardship plan and in annual reports submitted by the carpet stewardship organization. If a carpet stewardship plan that was previously approved by the department terminates or is revoked, the bill would authorize the department to allow a manufacturer that is no longer subject to the plan to continue to sell carpet in California for a period of one year after the plan terminates or is revoked, without being subject to penalties, if the manufacturer meets either of 2 requirements. The bill would revise the criteria that a carpet stewardship organization is required to meet in order to achieve compliance with the carpet stewardship laws. The bill would prohibit a carpet stewardship organization from expending funds from the carpet stewardship assessment for specified costs and penalties, including for engineered solid waste conversion, as defined, the use of cement kilns to burn carpet, or transformation, as defined.

Existing law defines carpet for purposes of these laws to mean a manufactured article that is used in commercial or residential buildings affixed or placed on the floor or building walking surface as a decorative or functional building interior feature and that is primarily constructed of a top visible surface of synthetic face fibers or yarns or tufts attached to a backing system derived from synthetic or natural materials.

This bill would expand the carpet stewardship program by revising the definition of carpet to include manufactured items that meet those same descriptions, but that are primarily constructed of a top visible surface of natural face fibers, yarns, or tufts.

Existing law requires a manufacturer of carpets sold in this state to submit, either individually or through a carpet stewardship organization, a carpet stewardship plan that meets specified requirements to the Department of Resources Recycling and Recovery. Existing law requires the department to review and approve or deny approval of a plan, as specified. Existing law imposes a carpet stewardship assessment per unit of carpet sold in the state that is remitted to the carpet stewardship organizations organization and may be expended to carry out the organizations carpet stewardship plan. Existing law provides that the purpose of carpet stewardship laws is to increase the amount of postconsumer carpet that is diverted from landfills and recycled into secondary products or otherwise managed in a manner that is consistent with the states hierarchy for waste management practices.

This bill would revise the requirements for a carpet stewardship plan and would require a carpet stewardship organization to include in its plan, and achieve by January 1, 2020, provide that it is the goal of the state to reach a 24% recycling rate goal, and other recycling rate goals set by the department in regulation on and after January 1, 2021. for postconsumer carpet by January 1, 2020, and to meet or exceed that rate continually thereafter. The bill would require the department, on or before January 1, 2023, to establish a minimum postconsumer carpet recycling rate requirement. The bill would create an advisory committee that would be required to make recommendations to manufacturers and carpet stewardship organizations on carpet stewardship plans. The bill would require the Director of Resources Recycling and Recovery, the Speaker of the Assembly, and the Senate Rules Committee to appoint members to the advisory committee, as specified. The bill would require a carpet stewardship plan to include a process by which the manufacturer or carpet stewardship organization receives and subsequently responds, in writing, to plan recommendations from the advisory committee. The bill would require the manufacturer or carpet stewardship organization to submit to the director, in writing, its reasons for rejecting any specific recommendations made by the advisory committee. The bill would prohibit a carpet stewardship organization from expending funds from the carpet stewardship assessment for specified costs and penalties, including costs associated with the incineration or disposal of postconsumer carpet. The bill would prohibit the department from approving a plan that provides subsidies, or spends any assessment funds, for activities related to the incineration or disposal of postconsumer carpet. for engineered solid waste conversion, as defined, the use of cement kilns to burn carpet, or transformation, as defined.

(1)Existing law requires a manufacturer of carpets sold in this state to submit, either individually or through a carpet stewardship organization, a carpet stewardship plan that meets specified requirements to the Department of Resources Recycling and Recovery. Existing law requires the department to review and approve or deny approval of a plan, as specified. Existing law imposes a carpet stewardship assessment per unit of carpet sold in the state that is remitted to carpet stewardship organizations and may be expended to carry out the organizations carpet stewardship plan.

This bill would revise the requirements for a carpet stewardship plan and would require a carpet stewardship organization to include in its plan, and achieve by January 1, 2020, a 24% recycling rate goal, and other recycling rate goals set by the department in regulation on and after January 1, 2021. The bill would create an advisory committee that would be required to make recommendations to manufacturers and carpet stewardship organizations on carpet stewardship plans. The bill would require the Director of Resources Recycling and Recovery, the Speaker of the Assembly, and the Senate Rules Committee to appoint members to the advisory committee, as specified. The bill would require a carpet stewardship plan to include a process by which the manufacturer or carpet stewardship organization receives and subsequently responds, in writing, to plan recommendations from the advisory committee. The bill would require the manufacturer or carpet stewardship organization to submit to the director, in writing, its reasons for rejecting any specific recommendations made by the advisory committee. The bill would prohibit a carpet stewardship organization from expending funds from the carpet stewardship assessment for specified costs and penalties, including costs associated with the incineration or disposal of postconsumer carpet. The bill would prohibit the department from approving a plan that provides subsidies, or spends any assessment funds, for activities related to the incineration or disposal of postconsumer carpet.

Existing law requires a manufacturer of carpets sold in this state to submit, either individually or through a carpet stewardship organization, a carpet stewardship plan that meets specified requirements to the Department of Resources Recycling and Recovery.

This bill would create an advisory committee that would be required to make recommendations to manufacturers and carpet stewardship organizations on carpet stewardship plans. The bill would require the Director of Resources Recycling and Recovery, the Speaker of the Assembly, and the Senate Rules Committee to appoint members to the advisory committee, as specified. The bill would require a carpet stewardship plan to include a process by which the manufacturer or carpet stewardship organization receives and subsequently responds, in writing, to plan recommendations from the advisory committee. The bill would require the manufacturer or carpet stewardship organization to submit to the director, in writing, its reasons for rejecting any specific recommendations made by the advisory committee. The bill would prohibit requiring a manufacturer or carpet stewardship organization to pay any costs associated with the creation or operations of the advisory committee.

Existing law requires a manufacturer of carpets sold in this state to submit, either individually or through a carpet stewardship organization, a carpet stewardship plan that meets specified requirements to the Department of Resources Recycling and Recovery.

This bill would create an advisory committee in the department that would be required to make recommendations to manufacturers and carpet stewardship organizations on carpet stewardship plans. The bill would require the Director of Resources Recycling and Recovery, the Speaker of the Assembly, and the Senate Rules Committee to appoint members to the advisory committee, as specified. The bill would require a carpet stewardship plan to include a process by which the manufacturer or carpet stewardship organization receives and subsequently responds, in writing, to plan recommendations from the advisory committee. The bill would require the manufacturer or carpet stewardship organization to submit to the director, in writing, its reasons for rejecting any specific recommendations made by the advisory committee. The bill would prohibit requiring a manufacturer or carpet stewardship organization to pay any costs associated with the creation or operations of the advisory committee.

Existing law requires a manufacturer of carpets sold in this state to submit, either individually or through a carpet stewardship organization, a carpet stewardship plan that meets specified requirements to the Department of Resources Recycling and Recovery.

This bill would create an advisory committee in the department to make recommendations to manufacturers and carpet stewardship organizations on carpet stewardship plans. The bill would require a carpet stewardship plan to include a process by which the manufacturer or carpet stewardship organization receives and subsequently responds, in writing, to plan recommendations from the advisory committee. The bill would require the manufacturer or carpet stewardship organization to submit to the director, in writing, its reasons for rejecting any specific recommendations made by the advisory committee. The bill would prohibit requiring a manufacturer or carpet stewardship organization to pay any costs associated with the creation or operations of the advisory committee.

Date of Hearing: September 13, 2017

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Cristina Garcia, Chair

ABPCA Bill Id:AB 1158 (

Author:Chu) – As Amended Ver:September 8, 2017

SUBJECT: Carpet recycling

SUMMARY: Creates an advisory committee to make recommendations on carpet stewardship plans. Establishes a minimum carpet recycling rate of 24% by 2020 and requires CalRecycle to establish a minimum percentage beginning January 1, 2023.

EXISTING LAW establishes the Product Stewardship for Carpets Program, which:

1. Requires manufacturers of carpets sold in this state, individually or through a carpet stewardship organization, to submit a carpet stewardship plan to CalRecycle that includes specified elements.
   
2. Requires CalRecycle, within 60 days after receiving a plan, to review and determine whether the plan complies with the law's requirements and notify the submitter of its decision.  Specifies that any plan not approved by March 31, 2012, is out of compliance until determined to be complete by CalRecycle.
   
3. Requires CalRecycle to post a notice on its website listing manufacturers that are in compliance with the bill’s requirements.  Requires a wholesaler or retailer that distributes or sells carpets to monitor the website to determine if the sale of a manufacturer’s carpet is in compliance.
   
4. Requires the carpet stewardship organization to demonstrate to CalRecycle that it has achieved continuous meaningful improvement in the rates of recycling and diversion and other specified goals in order to be in compliance.
   
5. Provides for the imposition of administrative civil penalties upon a person who violates the bill and would provide that the manufacturer or carpet stewardship organization whose plan is not approved by CalRecycle by March 31, 2012, is subject to those penalties until the plan is approved.
   

THIS BILL:

1. Establishes a carpet recycling rate of 24% by January 1, 2020.
   
2. Requires, on or before January 1, 2023, CalRecycle to establish a minimum carpet recycling rate.
   
3. Prohibits a carpet stewardship organization from expending funds from an assessment for any of the following purposes:
   
   1. Penalties imposed by CalRecycle;
      
   2. Costs associated with litigation against the state; or,
      
   3. Engineered municipal solid waste conversion, use in cement kilns, and transformation, as defined.
      
4. Creates an advisory committee to make recommendations on carpet stewardship plans.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, this bill has negligible state costs.

COMMENTS: California's carpet stewardship program was created by AB 2396 (Perez), Chapter 681, Statutes of 2010. As an extended producer responsibility (EPR) program, manufacturers (either individually or through their stewardship organization) are required to design and implement their own stewardship program. This means there is a stewardship organization that prepares and implements a plan to reach certain goals, finances and distributes funds to support the stewardship program, and reports to CalRecycle on their progress. CalRecycle's role in the carpet stewardship program is to review and approve plans, check progress, and support industry by providing oversight and enforcement to ensure a level playing field among carpet manufacturers. Other service providers participate in the management system as negotiated with the stewardship organization.

The stewardship plan is a critical part of the program; it defines a compliant program and communicates a course of action to stakeholders and the public. Stewardship organizations (or individual manufacturers that are not represented by a stewardship organization) are responsible for submitting the plans to CalRecycle for approval. Approved plans are posted on CalRecycle's website.

The Carpet America Recovery Effort (CARE), based in Georgia, is the carpet industry's stewardship organization. In keeping with AB 2396, CARE is directed to collect an assessment that is sufficient to meet, but not exceed, the anticipated cost of implementing the stewardship plan. In the approved California Carpet Stewardship Plan, the initial ($0.05) per square yard assessment was approved to remain through 2016. On December 28, 2014, CARE submitted and CalRecycle approved an addendum to its approved plan. This addendum provided justification for additional program incentives and enhancements to help CARE achieve compliance. CARE also requested an increase in the assessment from $0.05/square yard of carpet sold in California to $0.10/square yard effective April 1, 2015. On November 30, 2015, CARE submitted an additional addendum to increase the assessment from $0.10/square yard of carpet sold in California to $0.20/square yard effective April 1, 2016. In October 2016, CARE submitted a revised plan to CalRecycle that included an increase in the assessment to $0.25/square yard. CalRecycle disapproved that plan on December 23, 2016. The disapproval states that CARE is to continue operating under the previous plan until a new plan is approved by CalRecycle. On January 16, 2017, CalRecycle conditionally approved Addendum #3 of the plan, with specified modifications. The conditional approval includes increasing the assessment to $0.25/square yard.

CalRecycle found that the plan, "taken as a whole, does not ensure continuous meaningful improvement in carpet recycling and diversion in 2017 and beyond." According to CalRecycle, the plan focuses on existing subsidies that have not demonstrated increased recycling rates; moreover, CARE intends to "scale back" subsidy guarantees going forward. The plan does not address the possibility of providing subsidies to points in the supply chain that may result in significant increases in recycling, such as installer subsidies to increase diversion and recycling, funding for discounted drop-off fees, or subsidies for secondary manufacturers to use post-consumer nylon.

AB 2396 established administrative civil penalties of $1,000 per day ($10,000 for intentional, knowing, or negligent violations). In its disapproval of CARE's October 2016 plan, the director directed staff to delay enforcement action against carpet manufacturers, wholesalers, and retailers for 120 days, "provided the regulatory entity is participating in good faith in continuing to carry out the requirements of the law and CARE's existing plan."

CARE submitted a revised plan to CalRecycle on February 20^th, which was considered at CalRecycle's public meeting on April 18^th. The plan specifies that with the $0.25/square yard assessment, it expects to collect $23.7 million in 2017. The plan identifies $1.7 million in reuse subsidy payments; $7.1 million in recycling processor payments; $11.1 million in manufacturer payments; just under $1 million in specified grants; and, $6.2 million in "program expenses," which includes $764,142 for CARE salaries and staffing. On April 21^st, CalRecycle disapproved CARE's plan based upon a finding that the plan does not comply with statutory requirements. Without an approved plan in place, all manufacturers that sell carpet in California are subject to penalties until they are covered by an approved plan. Additionally, wholesalers and retailers are subject to penalties for selling carpet from non-compliant manufacturers. In order to preserve the recycling infrastructure and avoid market disruptions, CalRecycle authorized manufacturers, wholesalers, and retailers to continue to operate without penalties for 60 days. The director of CalRecycle directed staff to develop a draft plan to help CARE comply with state requirements; the draft plan was discussed at CalRecycle's public meeting on May 16, 2017.

On March 10, 2017, CalRecycle began an enforcement proceeding against CARE for failing to meet the requirement that the carpet stewardship organization is required to achieve "continuous and meaningful improvement in the rates of recycling and diversion of postconsumer carpet subject to its stewardship plan and in meeting the other goals included in the organization's plan." In spite of the significant amount of money collected by CARE from California consumers, CalRecycle found that CARE did not meet these requirements in 2013, 2014, and 2015. After each finding, CalRecycle provided CARE with recommendations on adjustments to the plan that would result in meaningful improvement; however, CARE has not incorporated CalRecycle's suggestions in any subsequent plans. CalRecycle is seeking a total of $3.285 million in penalties: $182,500 for 2013; $1.46 million for 2014; and, $1.6425 million for 2015.

On June 20, 2017, CalRecycle considered and adopted the final Enforcement Plan. Manufacturers may choose to stay with CARE or choose to submit their own stewardship plan. By October 19, 2017, each carpet manufacturer, individually or through a stewardship organization, is required to submit a plan to CalRecycle in order to avoid penalties under the Enforcement Plan. Within 60 days of submittal, CalRecycle must approve or disapprove the plan(s).

REGISTERED SUPPORT / OPPOSITION:

Support

7^th Generation Advisors
California Association of Environmental Health Administrators
California Product Stewardship Council
California State Association of Counties
Californians Against Waste
Calpirg
City of Clovis
City of Cupertino
City of Napa
City of Rancho Cucamonga
City of Thousand Oaks
Clean Water Action
Coalition for Clean Air
Colorado Medical Waste, Inc.
County of Alameda
County of Santa Clara
County of Sonoma
East Yard Communities
Environment California
Environmental Working Group
Heal the Bay
Interface
International Union of Painters and Allied Trades, District Council 16
League of California Cities
Los Angeles County Solid Waste Management Committee/Integrated Waste Management Task Force
Marin Sanitary Service
Mojave Desert and Mountain Recycling
Napa Recycling
National Stewardship Action Council
Natural Resources Defense Council
Plastic Pollution Coalition
ReFiber
Solid Waste Association of North America
South San Francisco Scavenger Company, Inc.
State Building and Construction Trades Council
Stopwaste.org
Tandus Centiva
Upstream
Voices for Progress Education Fund
Wishtoyo Chumash Foundation
Zanker Recycling
Zero Waste USA

Opposition

California Carpet Stewardship Program

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. /

CONCURRENCE IN SENATE AMENDMENTS

CSA2 Bill Id:AB 1158

Author:(Chu)

As Amended Ver:September 8, 2017

Majority vote

(vote not relevant)

Natural Resources

Original Committee Reference: NAT. RES.

SUMMARY: Creates an advisory committee to make recommendations on carpet stewardship plans. Establishes a minimum carpet recycling rate of 24% by 2020 and requires CalRecycle to establish a minimum percentage beginning January 1, 2023.

The Senate amendments:

1. Establish a carpet recycling rate goal of 24% by January 1, 2020.
2. Require, on or before January 1, 2023, CalRecycle to establish a minimum carpet recycling rate.
3. Prohibit a carpet stewardship organization from expending funds from an assessment for any of the following purposes:
   1. Penalties imposed by CalRecycle;
   2. Costs associated with litigation against the state; or,
   3. Engineered municipal solid waste conversion, use in cement kilns, and transformation, as defined.

EXISTING LAW establishes the Product Stewardship for Carpets Program, which:

1. Requires manufacturers of carpets sold in this state, individually or through a carpet stewardship organization, to submit a carpet stewardship plan to CalRecycle that includes specified elements.
2. Requires CalRecycle, within 60 days after receiving a plan, to review and determine whether the plan complies with the law's requirements and notify the submitter of its decision. Specifies that any plan not approved by March 31, 2012, is out of compliance until determined to be complete by CalRecycle.
3. Requires CalRecycle to post a notice on its website listing manufacturers that are in compliance with the bill's requirements. Requires a wholesaler or retailer that distributes or sells carpets to monitor the website to determine if the sale of a manufacturer's carpet is in compliance.
4. Requires the carpet stewardship organization to demonstrate to CalRecycle that it has achieved continuous meaningful improvement in the rates of recycling and diversion and other specified goals in order to be in compliance.
5. Provides for the imposition of administrative civil penalties upon a person who violates the bill and would provide that the manufacturer or carpet stewardship organization whose plan is not approved by CalRecycle by March 31, 2012, is subject to those penalties until the plan is approved.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, this bill has negligible state costs.

COMMENTS: California's carpet stewardship program was created by AB 2396 (Perez), Chapter 681, Statutes of 2010. As an extended producer responsibility (EPR) program, manufacturers (either individually or through their stewardship organization) are required to design and implement their own stewardship program. This means there is a stewardship organization that prepares and implements a plan to reach certain goals, finances and distributes funds to support the stewardship program, and reports to CalRecycle on their progress. CalRecycle's role in the carpet stewardship program is to review and approve plans, check progress, and support industry by providing oversight and enforcement to ensure a level playing field among carpet manufacturers. Other service providers participate in the management system as negotiated with the stewardship organization.

The stewardship plan is a critical part of the program; it defines a compliant program and communicates a course of action to stakeholders and the public. Stewardship organizations (or individual manufacturers that are not represented by a stewardship organization) are responsible for submitting the plans to CalRecycle for approval. Approved plans are posted on CalRecycle's website.

The Carpet America Recovery Effort (CARE), based in Georgia, is the carpet industry's stewardship organization. In keeping with AB 2396, CARE is directed to collect an assessment that is sufficient to meet, but not exceed, the anticipated cost of implementing the stewardship plan. In the approved California Carpet Stewardship Plan, the initial ($0.05) per square yard assessment was approved to remain through 2016. On December 28, 2014, CARE submitted and CalRecycle approved an addendum to its approved plan. This addendum provided justification for additional program incentives and enhancements to help CARE achieve compliance. CARE also requested an increase in the assessment from $0.05/square yard of carpet sold in California to $0.10/square yard effective April 1, 2015. On November 30, 2015, CARE submitted an additional addendum to increase the assessment from $0.10/square yard of carpet sold in California to $0.20/square yard effective April 1, 2016. In October 2016, CARE submitted a revised plan to CalRecycle that included an increase in the assessment to $0.25/square yard. CalRecycle disapproved that plan on December 23, 2016. The disapproval states that CARE is to continue operating under the previous plan until a new plan is approved by CalRecycle. On January 16, 2017, CalRecycle conditionally approved Addendum #3 of the plan, with specified modifications. The conditional approval includes increasing the assessment to $0.25/square yard.

CalRecycle found that the plan, "taken as a whole, does not ensure continuous meaningful improvement in carpet recycling and diversion in 2017 and beyond." According to CalRecycle, the plan focuses on existing subsidies that have not demonstrated increased recycling rates; moreover, CARE intends to "scale back" subsidy guarantees going forward. The plan does not address the possibility of providing subsidies to points in the supply chain that may result in significant increases in recycling, such as installer subsidies to increase diversion and recycling, funding for discounted drop-off fees, or subsidies for secondary manufacturers to use post-consumer nylon.

AB 2396 established administrative civil penalties of $1,000 per day ($10,000 for intentional, knowing, or negligent violations). In its disapproval of CARE's October 2016 plan, the director directed staff to delay enforcement action against carpet manufacturers, wholesalers, and retailers for 120 days, "provided the regulatory entity is participating in good faith in continuing to carry out the requirements of the law and CARE's existing plan."

CARE submitted a revised plan to CalRecycle on February 20^th, which was considered at CalRecycle's public meeting on April 18^th. The plan specifies that with the $0.25/square yard assessment, it expects to collect $23.7 million in 2017. The plan identifies $1.7 million in reuse subsidy payments; $7.1 million in recycling processor payments; $11.1 million in manufacturer payments; just under $1 million in specified grants; and, $6.2 million in "program expenses," which includes $764,142 for CARE salaries and staffing. On April 21^st, CalRecycle disapproved CARE's plan based upon a finding that the plan does not comply with statutory requirements. Without an approved plan in place, all manufacturers that sell carpet in California are subject to penalties until they are covered by an approved plan. Additionally, wholesalers and retailers are subject to penalties for selling carpet from non-compliant manufacturers. In order to preserve the recycling infrastructure and avoid market disruptions, CalRecycle authorized manufacturers, wholesalers, and retailers to continue to operate without penalties for 60 days. The director of CalRecycle directed staff to develop a draft plan to help CARE comply with state requirements; the draft plan was discussed at CalRecycle's public meeting on May 16, 2017.

On March 10, 2017, CalRecycle began an enforcement proceeding against CARE for failing to meet the requirement that the carpet stewardship organization is required to achieve "continuous and meaningful improvement in the rates of recycling and diversion of postconsumer carpet subject to its stewardship plan and in meeting the other goals included in the organization's plan." In spite of the significant amount of money collected by CARE from California consumers, CalRecycle found that CARE did not meet these requirements in 2013, 2014, and 2015. After each finding, CalRecycle provided CARE with recommendations on adjustments to the plan that would result in meaningful improvement; however, CARE has not incorporated CalRecycle's suggestions in any subsequent plans. CalRecycle is seeking a total of $3.285 million in penalties: $182,500 for 2013; $1.46 million for 2014; and, $1.6425 million for 2015.

On June 20, 2017, CalRecycle considered and adopted the final Enforcement Plan. Manufacturers may choose to stay with CARE or choose to submit their own stewardship plan. By October 19, 2017, each carpet manufacturer, individually or through a stewardship organization, is required to submit a plan to CalRecycle in order to avoid penalties under the Enforcement Plan. Within 60 days of submittal, CalRecycle must approve or disapprove the plan(s).

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. / (916) 319-2092 FN: 0002354

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1158

Author:(Chu)

As Amended Ver:September 8, 2017

Majority vote

Original Committee Reference: NAT. RES.

SUMMARY: Creates an advisory committee to make recommendations on carpet stewardship plans. Establishes a minimum carpet recycling rate of 24% by 2020 and requires CalRecycle to establish a minimum percentage beginning January 1, 2023.

The Senate amendments:

1. Establish a carpet recycling rate goal of 24% by January 1, 2020.
2. Require, on or before January 1, 2023, CalRecycle to establish a minimum carpet recycling rate.
3. Prohibit a carpet stewardship organization from expending funds from an assessment for any of the following purposes:
   1. Penalties imposed by CalRecycle;
   2. Costs associated with litigation against the state; or,
   3. Engineered municipal solid waste conversion, use in cement kilns, and transformation, as defined.

EXISTING LAW establishes the Product Stewardship for Carpets Program, which:

1. Requires manufacturers of carpets sold in this state, individually or through a carpet stewardship organization, to submit a carpet stewardship plan to CalRecycle that includes specified elements.
2. Requires CalRecycle, within 60 days after receiving a plan, to review and determine whether the plan complies with the law's requirements and notify the submitter of its decision. Specifies that any plan not approved by March 31, 2012, is out of compliance until determined to be complete by CalRecycle.
3. Requires CalRecycle to post a notice on its website listing manufacturers that are in compliance with the bill's requirements. Requires a wholesaler or retailer that distributes or sells carpets to monitor the website to determine if the sale of a manufacturer's carpet is in compliance.
4. Requires the carpet stewardship organization to demonstrate to CalRecycle that it has achieved continuous meaningful improvement in the rates of recycling and diversion and other specified goals in order to be in compliance.
5. Provides for the imposition of administrative civil penalties upon a person who violates the bill and would provide that the manufacturer or carpet stewardship organization whose plan is not approved by CalRecycle by March 31, 2012, is subject to those penalties until the plan is approved.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, this bill has negligible state costs.

COMMENTS: California's carpet stewardship program was created by AB 2396 (Perez), Chapter 681, Statutes of 2010. As an extended producer responsibility (EPR) program, manufacturers (either individually or through their stewardship organization) are required to design and implement their own stewardship program. This means there is a stewardship organization that prepares and implements a plan to reach certain goals, finances and distributes funds to support the stewardship program, and reports to CalRecycle on their progress. CalRecycle's role in the carpet stewardship program is to review and approve plans, check progress, and support industry by providing oversight and enforcement to ensure a level playing field among carpet manufacturers. Other service providers participate in the management system as negotiated with the stewardship organization.

The stewardship plan is a critical part of the program; it defines a compliant program and communicates a course of action to stakeholders and the public. Stewardship organizations (or individual manufacturers that are not represented by a stewardship organization) are responsible for submitting the plans to CalRecycle for approval. Approved plans are posted on CalRecycle's website.

The Carpet America Recovery Effort (CARE), based in Georgia, is the carpet industry's stewardship organization. In keeping with AB 2396, CARE is directed to collect an assessment that is sufficient to meet, but not exceed, the anticipated cost of implementing the stewardship plan. In the approved California Carpet Stewardship Plan, the initial ($0.05) per square yard assessment was approved to remain through 2016. On December 28, 2014, CARE submitted and CalRecycle approved an addendum to its approved plan. This addendum provided justification for additional program incentives and enhancements to help CARE achieve compliance. CARE also requested an increase in the assessment from $0.05/square yard of carpet sold in California to $0.10/square yard effective April 1, 2015. On November 30, 2015, CARE submitted an additional addendum to increase the assessment from $0.10/square yard of carpet sold in California to $0.20/square yard effective April 1, 2016. In October 2016, CARE submitted a revised plan to CalRecycle that included an increase in the assessment to $0.25/square yard. CalRecycle disapproved that plan on December 23, 2016. The disapproval states that CARE is to continue operating under the previous plan until a new plan is approved by CalRecycle. On January 16, 2017, CalRecycle conditionally approved Addendum #3 of the plan, with specified modifications. The conditional approval includes increasing the assessment to $0.25/square yard.

CalRecycle found that the plan, "taken as a whole, does not ensure continuous meaningful improvement in carpet recycling and diversion in 2017 and beyond." According to CalRecycle, the plan focuses on existing subsidies that have not demonstrated increased recycling rates; moreover, CARE intends to "scale back" subsidy guarantees going forward. The plan does not address the possibility of providing subsidies to points in the supply chain that may result in significant increases in recycling, such as installer subsidies to increase diversion and recycling, funding for discounted drop-off fees, or subsidies for secondary manufacturers to use post-consumer nylon.

AB 2396 established administrative civil penalties of $1,000 per day ($10,000 for intentional, knowing, or negligent violations). In its disapproval of CARE's October 2016 plan, the director directed staff to delay enforcement action against carpet manufacturers, wholesalers, and retailers for 120 days, "provided the regulatory entity is participating in good faith in continuing to carry out the requirements of the law and CARE's existing plan."

CARE submitted a revised plan to CalRecycle on February 20th, which was considered at CalRecycle's public meeting on April 18th. The plan specifies that with the $0.25/square yard assessment, it expects to collect $23.7 million in 2017. The plan identifies $1.7 million in reuse subsidy payments; $7.1 million in recycling processor payments; $11.1 million in manufacturer payments; just under $1 million in specified grants; and, $6.2 million in "program expenses," which includes $764,142 for CARE salaries and staffing. On April 21st, CalRecycle disapproved CARE's plan based upon a finding that the plan does not comply with statutory requirements. Without an approved plan in place, all manufacturers that sell carpet in California are subject to penalties until they are covered by an approved plan. Additionally, wholesalers and retailers are subject to penalties for selling carpet from non-compliant manufacturers. In order to preserve the recycling infrastructure and avoid market disruptions, CalRecycle authorized manufacturers, wholesalers, and retailers to continue to operate without penalties for 60 days. The director of CalRecycle directed staff to develop a draft plan to help CARE comply with state requirements; the draft plan was discussed at CalRecycle's public meeting on May 16, 2017.

On March 10, 2017, CalRecycle began an enforcement proceeding against CARE for failing to meet the requirement that the carpet stewardship organization is required to achieve "continuous and meaningful improvement in the rates of recycling and diversion of postconsumer carpet subject to its stewardship plan and in meeting the other goals included in the organization's plan." In spite of the significant amount of money collected by CARE from California consumers, CalRecycle found that CARE did not meet these requirements in 2013, 2014, and 2015. After each finding, CalRecycle provided CARE with recommendations on adjustments to the plan that would result in meaningful improvement; however, CARE has not incorporated CalRecycle's suggestions in any subsequent plans. CalRecycle is seeking a total of $3.285 million in penalties: $182,500 for 2013; $1.46 million for 2014; and, $1.6425 million for 2015.

On June 20, 2017, CalRecycle considered and adopted the final Enforcement Plan. Manufacturers may choose to stay with CARE or choose to submit their own stewardship plan. By October 19, 2017, each carpet manufacturer, individually or through a stewardship organization, is required to submit a plan to CalRecycle in order to avoid penalties under the Enforcement Plan. Within 60 days of submittal, CalRecycle must approve or disapprove the plan(s).

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. / (916) 319-2092 FN: 0002275

 THIRD READING  

Bill No: AB 1158

Author:

:

Vote:

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 6-0, 7/5/17

AYES: Wieckowski, Stone, Hill, Lara, Skinner, Stern

NO VOTE RECORDED: Gaines

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 73-2, 5/30/17 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill provides changes to the Product Stewardship for Carpets Program related to minimum carpet recycling rate requirements, prohibitions on specified expenditures of funds, and establishment of an advisory committee.

Senate Floor Amendments of 9/8/17 require carpet recycling stewardship organizations to improve and increase carpet recycling in the state.

ANALYSIS: Existing law establishes the Product Stewardship for Carpets Program (Public Resources Code (PRC) §42970 et seq.), which:

1. Requires manufacturers of carpets sold in this state, individually or through a carpet stewardship organization, to submit a carpet stewardship plan to CalRecycle that includes specified elements.
2. Provides for a carpet stewardship assessment per unit of carpet sold in the state in an amount that cumulatively will adequately fund the plan and be consistent with the purposes of the chapter. Requires the amount of the assessment be sufficient to meet, but not exceed, the anticipated cost of carrying out the plan.
3. Defines “CARE” as the Carpet America Recovery Effort, a third party nonprofit carpet stewardship organization incorporated as a 501(c)(3) nonprofit corporation and established to increase the reclamation and stewardship of postconsumer carpet.

This bill:

1. Requires a carpet stewardship plan to achieve a 24% recycling rate for postconsumer carpet by January 1, 2020, and to include quantifiable goals, as specified.
2. Requires a carpet stewardship organization to provide CalRecycle with specified data in order to evaluate the effectiveness of the program.
3. Authorizes CalRecycle to allow a manufacturer that is no longer subject to the plan to continue to sell carpet in California for a specified time if a carpet stewardship plan that was previously approved by CalRecycle either terminates or is revoked.
4. Prohibits a carpet stewardship organization from expending funds from an assessment for any of the following purposes: a) penalties imposed pursuant to PRC Section 42978; b) costs associated with litigation against the state; or, c) “Engineered municipal solid waste conversion” as defined in PRC Section 40131.2, use at cement kilns, and transformation as defined in PRC Section 40201.
5. Establishes an advisory committee.
6. Requires the Department of General Services to ensure that carpet purchased by a state agency contains a minimum amount of postconsumer content.

Background

1. Carpet recycling stewardship program. California’s carpet stewardship program was established by AB 2398 (Pérez, Chapter 681, Statutes of 2010). California is the first state to create a private-sector designed and managed statewide carpet extended producer responsibility program. Carpet manufacturers, individually, or through a stewardship organization, are required to design a plan and implement the program to achieve continuous meaningful improvement in landfill diversion and recycling of postconsumer carpet. In addition, the stewardship organization finances and distributes funds to support the stewardship program, and reports to CalRecycle on its progress.

CalRecycle’s role in the carpet stewardship program is to review and approve plans, check progress, and provide oversight and enforcement. Other service providers participate in the management system as negotiated with the stewardship organization.

CARE is a third-party nonprofit carpet stewardship organization based in Georgia. AB 2398 established CARE as the sole carpet stewardship organization until April 1, 2015. After that date, other stewardship organizations are allowed to submit their own plan to CalRecycle for approval. Currently, CARE is the only carpet stewardship organization in California.

1. Recent history of the carpet stewardship program. (For a more expansive history dating back to events since 2014 regarding the carpet stewardship plan and enforcement, please see analysis by the Senate Environmental Quality Committee.)
   1. On February 20, 2017, CARE submitted its Revised California Carpet Stewardship Plan 2017-2021 to CalRecycle. The plan specified that with the $0.25/square yard assessment, CARE expected to collect $23.7 million in 2017. The plan identified $1.7 million in reuse subsidy payments; $7.1 million in recycling processor payments; $11.1 million in manufacturer payments; just under $1 million in specified grants; and, $6.2 million in “program expenses,” which included $764,142 for CARE salaries and staffing.
   2. On March 10, 2017, separate from its consideration of the proposed 2017 stewardship plan, CalRecycle began an enforcement proceeding against CARE and filed an accusation document. Among the accusations was failing to meet the requirement that the carpet stewardship organization is required to achieve "continuous and meaningful improvement in the rates of recycling and diversion of postconsumer carpet subject to its stewardship plan and in meeting the other goals included in the organization's plan."

The recycling rate for carpet dropped from 2013 to 2015 – the recycling rate was 12.2% in 2013, 12.1% in 2014, and 10% in 2015. CalRecycle is seeking a total of $3.285 million in penalties: $182,500 for 2013; $1.46 million for 2014; and, $1.6425 million for 2015.

The accusation document imposed fines against CARE for a total of $3.285 million: $182,500 for 2013; $1.46 million for 2014; and, $1.6425 million for 2015.

• 1. On April 18, 2017, CalRecycle disapproved CARE’s revised 2017-2021 plan based on a finding that the plan did not adequately address the deficiencies cited in the December 20, 2016 Request for Approval.
  2. On May 3, 2017, CalRecycle initiated weekly discussions with CARE regarding required plan components as well as public outreach efforts and work with manufacturers to achieve compliance.
  3. On May 16, 2017, CalRecycle released a draft enforcement plan against carpet manufacturers. The draft plan did not enforce against wholesalers or retailers. CalRecycle proposed requiring each manufacturer by August 15, 2017, to indicate whether they want CARE to continue acting on their behalf, whether they want to join a different stewardship group or whether they will file their own plan. Also, it proposed an October 19, 2017 deadline to submit new plans. Failures to respond to CalRecycle or submit new plans may result in fines for individual manufacturers.
  4. On June 20, 2017, CalRecycle considered and adopted the final Enforcement Plan. CalRecycle is in the process of mailing out the first notification to carpet manufacturers, which asks manufacturers to respond by August 15, 2017, regarding how the manufacturer will comply going forward. Manufacturers may choose to stay with CARE or choose to submit their own stewardship plan.
  5. By October 19, 2017, each carpet manufacturer, individually or through a stewardship organization, is required to submit a plan to CalRecycle in order to avoid penalties under the Enforcement Plan. Within 60 days of submittal, CalRecycle must approve or disapprove the plan(s).

Comments

1. Purpose of bill. According to the author, “The carpet industry's inability to meet the legislative performance standards and the goals of its own stewardship plan has and will result in burdens on local governments, crowded landfills, carpet being shipped out of state instead of building California's recycling infrastructure, and incineration of useful material that could otherwise be recycled. As the program run by CARE is being paid for by California consumers, we need to ensure that it goes toward enhancing waste reduction at the source, increasing the carpet recycling rate to align with statewide goals, and provide convenience for California fee payers to recycle carpet. AB 1158 aims to complement and improve the current program to ensure that the goals of the 2010 enabling legislation.”
2. Support and opposition. The support and opposition listed below are based on the July 10, 2017 version of AB 1158. As of September 8, 2017, no position letters were received for the September 8, 2017 version of this bill.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 8/29/17)

7^th Generation Advisors

California Chapters of the Solid Waste Association of North America

California Conference of Directors of Environmental Health

California League of Conservation Voters

California Product Stewardship Council

California Recycling Market Development Zone

California Refuse Recycling Council

California Resource Recovery Association

Californians Against Waste

Changing Markets

City of Berkeley Mayor Jesse Arreguin

City of Cupertino

City of Napa

City of Sunnyvale

City of Thousand Oaks

Clean Water Action

Coalition for Clean Air

Colorado Medical Waste, Inc.

Councilmember Sophie Hahn, City of Berkeley, District 5

Councilmember Susan Wengraf, City of Berkeley, District 6

Dave Cortese, President of County of Santa Clara Supervisor, Third District

East Yard Communities for Environmental Justice

Environment California

Environmental Working Group

Fiberon

Full Circle Environmental

Global Alliance for Incinerator Alternatives

Heal the Bay

Institute for Local Self-Reliance

League of California Cities

Los Angeles County Solid Waste Management Committee/Integrated Waste Management Task Force

More Ocean Less Plastic

Napa Recycling and Waste Services

Natural Resources Defense Council

Plastic Pollution Coalition

Santa Clara County

Stop Waste

The Story of Stuff Project

Valley Improvement Projects for Social & Environmental Justice

Voices for Progress Education Fund

Western Placer Waste Management Authority

Wishtoyo Chumash Foundation

Zanker Recycling

Zero Waste USA

OPPOSITION: (Verified 8/29/17)

Carpet & Rug Institute

Carpet America Recovery Effort

District Council 16 Painters and Allied Trades

Mohawk Industries

Shaw Industries Group Inc.

ASSEMBLY FLOOR: 73-2, 5/30/17

AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Burke, Caballero, Calderon, Cervantes, Chávez, Chiu, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NOES: Travis Allen, Harper

NO VOTE RECORDED: Brough, Chau, Chen, Choi, Eggman

Prepared by:

9/11/17 20:03:57

**** END ****

 THIRD READING  

Bill No: AB 1158

Author:

:

Vote:

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 6-0, 7/5/17

AYES: Wieckowski, Stone, Hill, Lara, Skinner, Stern

NO VOTE RECORDED: Gaines

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 73-2, 5/30/17 - See last page for vote

SUBJECT:

SOURCE: National Stewardship Action Council

DIGEST:

This bill provides changes to the Product Stewardship for Carpets Program related to carpet recycling rates, prohibitions on specified expenditures of funds, and establishment of an advisory committee.

ANALYSIS: Existing law establishes the Product Stewardship for Carpets Program (Public Resources Code (PRC) §42970 et seq.), which:

1. Requires manufacturers of carpets sold in this state, individually or through a carpet stewardship organization, to submit a carpet stewardship plan to CalRecycle that includes specified elements.
2. Provides for a carpet stewardship assessment per unit of carpet sold in the state in an amount that cumulatively will adequately fund the plan and be consistent with the purposes of the chapter. Requires the amount of the assessment be sufficient to meet, but not exceed, the anticipated cost of carrying out the plan.
3. Defines “CARE” as the Carpet America Recovery Effort, a third party nonprofit carpet stewardship organization incorporated as a 501(c)(3) nonprofit corporation and established to increase the reclamation and stewardship of postconsumer carpet.

This bill:

1. Establishes a carpet recycling rate goal of 24% by January 1, 2020.
2. Requires, on or before January 1, 2023, CalRecycle to establish a minimum carpet recycling rate requirement.
3. Prohibits a carpet stewardship organization from expending funds from an assessment for any of the following purposes: a) penalties imposed pursuant to Section 42978; b) costs associated with litigation against the state; or, c) “engineered municipal solid waste conversion” as defined in PRC Section 40131.2, use at cement kilns, and transformation as defined in PRC Section 40201.
4. Establishes an advisory committee.

Background

1. Carpet recycling stewardship program. California’s carpet stewardship program was established by AB 2398 (Pérez, Chapter 681, Statutes of 2010). California is the first state to create a private-sector designed and managed statewide carpet extended producer responsibility program. Carpet manufacturers, individually, or through a stewardship organization, are required to design a plan and implement the program to achieve continuous meaningful improvement in landfill diversion and recycling of postconsumer carpet. In addition, the stewardship organization finances and distributes funds to support the stewardship program, and reports to CalRecycle on its progress.

CalRecycle’s role in the carpet stewardship program is to review and approve plans, check progress, and provide oversight and enforcement. Other service providers participate in the management system as negotiated with the stewardship organization.

CARE is a third-party nonprofit carpet stewardship organization based in Georgia. AB 2398 established CARE as the sole carpet stewardship organization until April 1, 2015. After that date, other stewardship organizations are allowed to submit their own plan to CalRecycle for approval. Currently, CARE is the only carpet stewardship organization in California.

1. Recent history of the carpet stewardship program. (For a more expansive history dating back to events since 2014 regarding the carpet stewardship plan and enforcement, please see analysis by the Senate Environmental Quality Committee.)
   1. On February 20, 2017, CARE submitted its Revised California Carpet Stewardship Plan 2017-2021 to CalRecycle. The plan specified that with the $0.25/square yard assessment, CARE expected to collect $23.7 million in 2017. The plan identified $1.7 million in reuse subsidy payments; $7.1 million in recycling processor payments; $11.1 million in manufacturer payments; just under $1 million in specified grants; and, $6.2 million in “program expenses,” which included $764,142 for CARE salaries and staffing.
   2. On March 10, 2017, separate from its consideration of the proposed 2017 stewardship plan, CalRecycle began an enforcement proceeding against CARE and filed an accusation document. Among the accusations was failing to meet the requirement that the carpet stewardship organization is required to achieve "continuous and meaningful improvement in the rates of recycling and diversion of postconsumer carpet subject to its stewardship plan and in meeting the other goals included in the organization's plan."

The recycling rate for carpet dropped from 2013 to 2015 – the recycling rate was 12.2% in 2013, 12.1% in 2014, and 10% in 2015. CalRecycle is seeking a total of $3.285 million in penalties: $182,500 for 2013; $1.46 million for 2014; and, $1.6425 million for 2015.

The accusation document imposed fines against CARE for a total of $3.285 million: $182,500 for 2013; $1.46 million for 2014; and, $1.6425 million for 2015.

• 1. On April 18, 2017, CalRecycle disapproved CARE’s revised 2017-2021 plan based on a finding that the plan did not adequately address the deficiencies cited in the December 20, 2016 Request for Approval.
  2. On May 3, 2017, CalRecycle initiated weekly discussions with CARE regarding required plan components as well as public outreach efforts and work with manufacturers to achieve compliance.
  3. On May 16, 2017, CalRecycle released a draft enforcement plan against carpet manufacturers. The draft plan did not enforce against wholesalers or retailers. CalRecycle proposed requiring each manufacturer by August 15, 2017, to indicate whether they want CARE to continue acting on their behalf, whether they want to join a different stewardship group or whether they will file their own plan. Also, it proposed an October 19, 2017 deadline to submit new plans. Failures to respond to CalRecycle or submit new plans may result in fines for individual manufacturers.
  4. On June 20, 2017, CalRecycle considered and adopted the final Enforcement Plan. CalRecycle is in the process of mailing out the first notification to carpet manufacturers, which asks manufacturers to respond by August 15, 2017, regarding how the manufacturer will comply going forward. Manufacturers may choose to stay with CARE or choose to submit their own stewardship plan.
  5. By October 19, 2017, each carpet manufacturer, individually or through a stewardship organization, is required to submit a plan to CalRecycle in order to avoid penalties under the Enforcement Plan. Within 60 days of submittal, CalRecycle must approve or disapprove the plan(s).

Comments

1. Purpose of bill. According to the author, “The carpet industry's inability to meet the legislative performance standards and the goals of its own stewardship plan has and will result in burdens on local governments, crowded landfills, carpet being shipped out of state instead of building California's recycling infrastructure, and incineration of useful material that could otherwise be recycled. As the program run by CARE is being paid for by California consumers, we need to ensure that it goes toward enhancing waste reduction at the source, increasing the carpet recycling rate to align with statewide goals, and provide convenience for California fee payers to recycle carpet. AB 1158 aims to complement and improve the current program to ensure that the goals of the 2010 enabling legislation.”
2. Limits on use of assessment funds. Moneys may be expended to support the purpose of the program. The purpose of the program is to increase the amount of postconsumer carpet that is diverted from landfills and recycled into secondary products or otherwise managed in a manner that is consistent with the state’s hierarchy of waste management practices.
   1. Penalties and legal fees to dispute enforcement action. Concern has been raised that CARE will use assessment fee revenue to pay for enforcement penalties against CARE as well as potential litigation costs should CARE sue the state.

Current law provides for a carpet stewardship assessment per unit of carpet sold in the state in an amount that cumulatively will adequately fund the plan and be consistent with the purposes of the chapter; and requires the amount of the assessment be sufficient to meet, but not exceed, the anticipated cost of carrying out the plan (PRC §42972). Pursuant to PRC §42970, “The purpose of this chapter is to increase the amount of postconsumer carpet that is diverted from landfills and recycled into secondary products or otherwise managed in a manner that is consistent with the state’s hierarchy for waste management practices pursuant to Section 40051.”

Using assessment fees to pay for legal fees and/or penalties for failing to meet the requirements of this chapter is the antithesis of “increas[ing] the amount of postconsumer carpet that is diverted from landfills and recycled into secondary products or otherwise managed in a manner that is consistent with the state’s hierarchy for waste management practices…”

Because current law does not explicitly state that assessment fee funds cannot be used for penalties or costs associated with litigation against the state, this bill clarifies that these fees are not to be used to pay penalties or costs associated with litigation against the state.

• 1. Incineration. Incinerators are known to release numerous toxic chemicals into the atmosphere and to produce ashes and other solid waste residues that contaminate the air, water and soil as well as vegetation in the vicinity of the facility. Adverse health effects associated with incineration are of great concern as large population groups and workers may be exposed to derived toxic substances. Many of these chemicals are known to be persistent, bioaccumulative, carcinogenic or endocrine disruptors. Populations living near incinerators are potentially exposed to chemicals by way of inhalation of contaminated air, consumption of contaminated foods, water or dermal contact with contaminated soil. Additionally, there are occupational hazards for incinerator workers.

Because of the environmental and public health impacts of incineration, this bill specifies that the assessment fee funds are prohibited from being used for “engineered municipal solid waste conversion” as defined in PRC Section 40131.2, use at cement kilns, and transformation as defined in PRC Section 40201.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 9/5/17)

National Stewardship Action Council (source)

7^th Generation Advisors

California Chapters of the Solid Waste Association of North America

California Conference of Directors of Environmental Health

California League of Conservation Voters

California Product Stewardship Council

California Recycling Market Development Zone

California Refuse Recycling Council

California Resource Recovery Association

Californians Against Waste

Changing Markets

City of Berkeley Mayor Jesse Arreguin

City of Cupertino

City of Napa

City of Sunnyvale

City of Torrance

City of Thousand Oaks

Clean Water Action

Coalition for Clean Air

Colorado Medical Waste, Inc.

Councilmember Sophie Hahn, City of Berkeley, District 5

Councilmember Susan Wengraf, City of Berkeley, District 6

East Yard Communities for Environmental Justice

Environment California

Environmental Working Group

Fiberon

Full Circle Environmental

Global Alliance for Incinerator Alternatives

Heal the Bay

Institute for Local Self-Reliance

League of California Cities

Los Angeles County Solid Waste Management Committee/Integrated Waste Management Task Force

More Ocean Less Plastic

Napa Recycling and Waste Services

Natural Resources Defense Council

Plastic Pollution Coalition

President of County of Santa Clara Supervisor Dave Cortese, Third District

Santa Clara County

Stop Waste

The Story of Stuff Project

Valley Improvement Projects for Social & Environmental Justice

Voices for Progress Education Fund

Western Placer Waste Management Authority

Wishtoyo Chumash Foundation

Zanker Recycling

Zero Waste USA

OPPOSITION: (Verified 8/29/17)

Carpet & Rug Institute Carpet America Recovery Effort

District Council 16 Painters and Allied Trades

Mohawk Industries

Shaw Industries Group, Inc.

ASSEMBLY FLOOR: 73-2, 5/30/17

AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Burke, Caballero, Calderon, Cervantes, Chávez, Chiu, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NOES: Travis Allen, Harper

NO VOTE RECORDED: Brough, Chau, Chen, Choi, Eggman

Prepared by:

9/5/17 16:39:45

**** END ****

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2017 - 2018 Regular

Bill No: AB 1158

SUBJECT: Carpet recycling.

ANALYSIS:

Existing law:

1. Under the California Integrated Waste Management Act of 1989, requires each city or county source reduction and recycling element to include an implementation schedule that shows a city or county must divert 25% of solid waste from landfill disposal or transformation by January 1, 1995, through source reduction, recycling, and composting activities, and must divert 50% of solid waste on and after January 1, 2000. (Public Resources Code (PRC) §41780). It is a policy goal of the state that not less than 75% of solid waste be source reduced, recycled, or composted by 2020, and annually thereafter. (PRC §41780.01).
   
2. Establishes the Product Stewardship for Carpets Program (PRC §42970 et seq.), which:
   
   1. Requires manufacturers of carpets sold in this state, individually or through a carpet stewardship organization, to submit a carpet stewardship plan to CalRecycle that includes specified elements.
      
   2. Requires CalRecycle, within 60 days after receiving a plan, to review and determine whether the plan complies with the law’s requirements and notify the submitter of its decision. 
      
   3. Requires the carpet stewardship organization to demonstrate to CalRecycle that it has achieved continuous meaningful improvement in the rates of recycling and diversion and other specified goals in order to be in compliance.
      
   4. Provides for a carpet stewardship assessment per unit of carpet sold in the state in an amount that cumulatively will adequately fund the plan and be consistent with the purposes of the chapter. Requires the amount of the assessment be sufficient to meet, but not exceed, the anticipated cost of carrying out the plan.
      
   5. Provides for the imposition of administrative civil penalties upon a person who violates the bill and would provide that the manufacturer or carpet stewardship organization whose plan is not approved by CalRecycle by March 31, 2012, is subject to those penalties until the plan is approved.
      
   6. Defines “CARE” as the Carpet America Recovery Effort, a third party nonprofit carpet stewardship organization incorporated as a 501(c)(3) nonprofit corporation and established to increase the reclamation and stewardship of postconsumer carpet.
      

This bill:

1. Deletes the definition of “CARE.”
   
2. Deletes the provision requiring CARE to be the sole carpet stewardship organization.
   
3. Defines “take back location” as a facility that accepts postconsumer carpet for recycling.
   
4. Revises the provisions pertaining to the carpet stewardship plan submitted to the CalRecycle, such as:
   
   1. Include goals, such as utilize (instead of “based on”) available technology and information rather than include goals based on technology and information to the extent feasible; and, increase diversion of postconsumer carpets from landfills and incineration.
      
   2. Describe measures that will ensure (instead of “enable”) the management of postconsumer carpet in a manner consistent with the state’s solid waste management hierarchy.
      
   3. Include a process by which a manufacturer or carpet stewardship organization receives and responds, in writing, to plan recommendations from the advisory committee.
      
   4. Include a goal of meeting 24% carpet recycling rate by January 1, 2020, and any other carpet recycling goals set by CalRecycle.
      
   5. Include a projection of recovery and recycling rates and a description of efforts to meet the recycling goals.
      
   6. Provide that at least one take-back location be established in each county.
      
5. Requires the carpet stewardship assessment be used only to carry out the plan.
   
6. Specifies that an assessment differential that accounts for the varied costs of recycling carpet may not be considered as creating an “unfair advantage in the marketplace.”
   
7. Prohibits a carpet stewardship organization from expending funds from the assessment for the following purposes:
   
   1. Activities related to the disposal or incineration of carpet;
      
   2. Penalties; or,
      
   3. Costs associated with litigation against the state.
      
8. Creates an advisory committee to make recommendations to manufacturers and carpet stewardship organizations on carpet stewardship plans, as specified.
   
9. On and after January 1, 2021, authorizes CalRecycle to adopt regulations to set carpet recycling rate goals for carpet stewardship organizations.
   
10. Prohibits a manufacturer from offering for sale or for promotional purposes in the state a carpet that is not subject to an approved plan that is submitted by an organization that includes that manufacturer.
    
11. Prohibits a wholesaler or retailer that distributes or sells carpet from a manufacturer that is out of compliance with the carpet stewardship program.
    
12. Requires a carpet stewardship organization to achieve a 24% carpet recycling rate by January 1, 2020, and any other carpet recycling rate goals set by CalRecycle.
    
13. Replaces references to CARE with general references to a carpet stewardship organization.
    

Background

1. Extended producer responsibility (EPR). According to CalRecycle, EPR is a strategy to place a shared responsibility for end-of-life product management on the producers, and all entities involved in the product chain, instead of on the general public and local governments, with oversight and enforcement provided by a governmental agency. This approach provides flexibility for manufacturers, based on their expertise in designing products and the systems that bring these products to market, to design systems to capture those products at the end-of-life to meet statutory goals.
2. Recycling carpet. According to CalRecycle, discarded carpet is one of the 10 most prevalent waste materials in California landfills, comprising about 3.2% of waste by volume disposed of in California in 2008. Most carpet is made from nylon and other polymers derived from virgin fossil fuel. Carpet is difficult to recover plastics from due to the multiple materials bound together and is designed for durability and longevity. Numerous products can be manufactured from recycled carpet, including carpet backing and backing components, carpet fiber, carpet underlayment, plastics and engineered materials, and erosion control products.
3. Carpet recycling stewardship program. California’s carpet stewardship program was established by AB 2398 (Pérez, Chapter 681, Statutes of 2010). California is the first state to create a private-sector designed and managed statewide carpet extended producer responsibility program. Carpet manufacturers, individually, or through a stewardship organization, are required to design a plan and implement the program to achieve continuous meaningful improvement in landfill diversion and recycling of postconsumer carpet. In addition, the stewardship organization finances and distributes funds to support the stewardship program, and reports to CalRecycle on its progress.
   
   CalRecycle's role in the carpet stewardship program is to review and approve plans, check progress, and provide oversight and enforcement. Other service providers participate in the management system as negotiated with the stewardship organization.
4. The Carpet America Recovery Effort (CARE). CARE is a third-party nonprofit carpet stewardship organization based in Georgia. AB 2398 established CARE as the sole carpet stewardship organization until April 1, 2015. After that date, other stewardship organizations are allowed to submit their own plan to CalRecycle for approval. Currently, CARE is the only carpet stewardship organization in California.
   
5. Timeline of more recent events. The following is a list of events over the past few years regarding the carpet stewardship plan and enforcement:
   
   1. On December 28, 2014, CARE submitted an addendum to its plan for approval. This addendum provided justification for additional program incentives and enhancements to help CARE achieve compliance. CARE also requested an increase in the assessment from $0.05/square yard of carpet sold in California to $0.10/square yard effective April 1, 2015.
      
   2. On January 5, 2015, CalRecycle responded to CARE in a letter accepting the addendum with conditions and noted that “CalRecycle acceptance of these changes to the Plan does not change the current non-compliant status of the Program.”
      
   3. In September 2015, CalRecycle found CARE to be noncompliant based on the 2014 Annual Report and listed several findings including that recycled output and other program goals were not showing meaningful and continuous improvement.
      
   4. On November 30, 2015, CARE submitted an additional addendum to increase the assessment from $0.10/square yard of carpet sold in California to $0.20/square yard effective April 1, 2016.
      
   5. On January 26, 2016, CalRecycle approved the addendum. In the revised request for approval, CalRecycle noted that this item did not change the noncompliance status of CARE’s 2014 Annual Report.
      
   6. In October 2016, CARE submitted a revised plan to CalRecycle that included an increase in the assessment to $0.25/square yard.
      
   7. On December 20, 2016, CalRecycle issued a Request for Approval making several Findings regarding deficiencies in the proposed 2017 plan, including:
      
      1. The plan did not provide enough information about the effectiveness of financial incentives and other program elements to evaluate whether the recycled output goals (24% by 2020 and 26% by 2021) would actually constitute continuous meaningful improvement, nor how the plan would achieve these goals.
         
      2. The plan did not discuss how stakeholder input, especially the recommendations of the newly formed California Council on Carpet Recycling, is evaluated.
         
      3. The plan did not sufficiently address reasonable consumer access to recycling services in critical population centers in California.
         
      4. CARE’s proposal to reduce subsidy guarantees to six months did not mitigate the uncertainty and high risk in investment for processors and others to establish and grow critical California infrastructure for long-term carpet recycling.
         
      5. In the plan, CARE had inappropriately redefined its primary method for measuring progress towards achieving its diversion and recyclability goals.
         
      6. The plan failed to identify or evaluate the education and outreach activities most likely to result in increased recycling and diversion.
         
      7. The plan did not sufficiently address increasing the recycled content in carpet itself (as opposed to secondary products), which could significantly boost end markets.
         
   8. On December 22, 2016, CalRecycle disapproved CARE’s 2017-2021 California Carpet Stewardship Plan that was submitted in October 2016. In its disapproval of the plan, the CalRecycle director told staff to delay enforcement action against carpet manufacturers, wholesalers, and retailers for 120 days, “provided the regulatory entity is participating in good faith in continuing to carry out the requirements of the law and CARE’s existing plan.”
      
      CalRecycle directed CARE to submit a revised 2017 Plan, within 60 days, and that would address the deficiencies identified in the December 20, 2016 Request for Approval.
      
   9. On December 31, 2016, CARE’s 2016 California Carpet Stewardship Plan expired on December 31, 2016.
      
   10. On January 16, 2017, CalRecycle conditionally approved Addendum #3 of the plan, with specified modifications. The conditional approval included increasing the assessment to $0.25/square yard.
       
   11. On February 20, 2017, CARE submitted its Revised California Carpet Stewardship Plan 2017-2021 to CalRecycle. The plan specified that with the $0.25/square yard assessment, CARE expected to collect $23.7 million in 2017. The plan identified $1.7 million in reuse subsidy payments; $7.1 million in recycling processor payments; $11.1 million in manufacturer payments; just under $1 million in specified grants; and, $6.2 million in “program expenses,” which included $764,142 for CARE salaries and staffing.
       
   12. On March 10, 2017, separate from its consideration of the proposed 2017 stewardship plan, CalRecycle began an enforcement proceeding against CARE and filed an accusation document. Among the accusations was failing to meet the requirement that the carpet stewardship organization is required to achieve "continuous and meaningful improvement in the rates of recycling and diversion of postconsumer carpet subject to its stewardship plan and in meeting the other goals included in the organization's plan."
       
       The recycling rate for carpet dropped from 2013 to 2015 – the recycling rate was 12.2% in 2013, 12.1% in 2014, and 10% in 2015. CalRecycle is seeking a total of $3.285 million in penalties: $182,500 for 2013; $1.46 million for 2014; and, $1.6425 million for 2015.
       
       The accusation document imposed fines against CARE for a total of $3.285 million: $182,500 for 2013; $1.46 million for 2014; and, $1.6425 million for 2015.
       
   13. On April 18, 2017, CalRecycle disapproved CARE’s revised 2017-2021 plan based on a finding that the plan did not adequately address the deficiencies cited in the December 20, 2016 Request for Approval.
   14. On May 3, 2017, CalRecycle initiated weekly discussions with CARE regarding required plan components as well as public outreach efforts and work with manufacturers to achieve compliance.
       
   15. On May 16, 2017, CalRecycle released a draft enforcement plan against carpet manufacturers. The draft plan did not enforce against wholesalers or retailers. CalRecycle proposed requiring each manufacturer by August 15, 2017, to indicate whether they want CARE to continue acting on their behalf, whether they want to join a different stewardship group or whether they will file their own plan. Also, it proposed an October 19, 2017 deadline to submit new plans. Failures to respond to CalRecycle or submit new plans may result in fines for individual manufacturers.
       
   16. On June 20, 2017, CalRecycle considered and adopted the final Enforcement Plan. CalRecycle is in the process of mailing out the first notification to carpet manufacturers, which asks manufacturers to respond by August 15, 2017, regarding how the manufacturer will comply going forward. Manufacturers may choose to stay with CARE or choose to submit their own stewardship plan.
       
   17. By October 19, 2017, each carpet manufacturer, individually or through a stewardship organization, is required to submit a plan to CalRecycle in order to avoid penalties under the Enforcement Plan. Within 60 days of submittal, CalRecycle must approve or disapprove the plan(s).

Comments

1. Purpose of Bill. According to the author, “The carpet industry's inability to meet the legislative performance standards and the goals of its own stewardship plan has and will result in burdens on local governments, crowded landfills, carpet being shipped out of state instead of building California's recycling infrastructure, and incineration of useful material that could otherwise be recycled. As the program run by CARE is being paid for by California consumers, we need to ensure that it goes toward enhancing waste reduction at the source, increasing the carpet recycling rate to align with statewide goals, and provide convenience for California fee payers to recycle carpet. AB 1158 aims to complement and improve the current program to ensure that the goals of the 2010 enabling legislation.”
2. Timing. CARE is expected to submit a revised plan on October 19, 2017. CalRecycle will have 60 days to consider approval of the plan. This bill revises requirements for a carpet stewardship plan. If this bill is chaptered, a question arises as to how the new law would affect the proposed plan, which is to be submitted by October 19, 2017, and possibly approved before the bill goes into effect in January, 2018 – Would the plan need to be revised to reflect the requirements in this bill? If so, how would this impact the process currently underway to revise the plan? In order to avoid potential interference with the current administrative efforts on revising the plan, provisions in this bill related to revising the requirements of a carpet stewardship plan should be deleted.
   
3. Rates and dates. §42975 of this bill mandates a carpet stewardship organization to achieve a 24% carpet recycling rate by January 1, 2020, and any other carpet recycling rate goals set by CalRecycle. Concern has been raised about requiring a specified recycling rate by a certain date and how this would impact the development of the plan that is currently being drafted for approval/disapproval by CalRecycle.
   
   However, CARE’s plan submitted in February included a performance goal. Considering CARE put forth a 24% recycling rate goal for 2020, perhaps CARE views this goal as reasonably attainable. In order to address the concern raised regarding mandating a recycling rate, but also maintain some type of target, this bill should include a goal of 24% recycling rate by January 1, 2020.
   
   Also, it seems reasonable to require a minimum recycling rate at some point in time after the five years that the proposed plan covers. By the end of the plan’s five years, a stewardship organization and CalRecycle should be able to more accurately calculate a reasonable minimum recycling rate. This bill should include a provision requiring CalRecycle to establish a minimum carpet recycling rate by January 1, 2023.
   
4. Limits on use of assessment funds. Moneys may be expended to support the purpose of the program. The purpose of the program is to increase the amount of postconsumer carpet that is diverted from landfills and recycled into secondary products or otherwise managed in a manner that is consistent with the state’s hierarchy of waste management practices.
   
   1. Penalties and legal fees to dispute enforcement action. Concern has been raised that CARE will use assessment fee revenue to pay for enforcement penalties against CARE as well as potential litigation costs should CARE sue the state.
      
      Current law provides for a carpet stewardship assessment per unit of carpet sold in the state in an amount that cumulatively will adequately fund the plan and be consistent with the purposes of the chapter; and requires the amount of the assessment be sufficient to meet, but not exceed, the anticipated cost of carrying out the plan (PRC §42972). Pursuant to PRC §42970, “The purpose of this chapter is to increase the amount of postconsumer carpet that is diverted from landfills and recycled into secondary products or otherwise managed in a manner that is consistent with the state’s hierarchy for waste management practices pursuant to Section 40051.”
      
      Using assessment fees to pay for legal fees and/or penalties for failing to meet the requirements of this chapter is the antithesis of “increas[ing] the amount of postconsumer carpet that is diverted from landfills and recycled into secondary products or otherwise managed in a manner that is consistent with the state’s hierarchy for waste management practices…”
      
      Because current law does not explicitly state that assessment fee funds cannot be used for penalties or costs associated with litigation against the state, clarification is needed to ensure that these fees are not used to pay penalties or costs associated with litigation against the state.
      
   2. Incineration. Incinerators are known to release numerous toxic chemicals into the atmosphere and to produce ashes and other solid waste residues that contaminate the air, water and soil as well as vegetation in the vicinity of the facility. Adverse health effects associated with incineration are of great concern as large population groups and workers may be exposed to derived toxic substances. Many of these chemicals are known to be persistent, bioaccumulative, carcinogenic or endocrine disruptors. Populations living near incinerators are potentially exposed to chemicals by way of inhalation of contaminated air, consumption of contaminated foods, water or dermal contact with contaminated soil. Additionally, there are occupational hazards for incinerator workers.
      
      Because of the environmental and public health impacts of incineration, the assessment fee funds should be prohibited from being used for “engineered municipal solid waste conversion” as defined in PRC §40131.2, use at cement kilns, and transformation as defined in PRC §40201.
      
5. Advisory committee. Current law does not include an advisory committee for the carpet stewardship program. An advisory committee made up of stakeholders is a prudent way to provide expertise and guidance in addressing issues in the carpet recycling program. In addition, it would be prudent to add an advisory committee member to represent carpet manufacturers considering they are a key participant in the program and may be able to provide their own expertise and insight into the advisory committee discussions.
   
   Section 3 of the bill, which adds PRC §42972.1 establishing the advisory committee should remain in the bill, as well as add a member to represent carpet manufacturers.
   
   In addition, compensation/reimbursement of necessary expenses for advisory committee members may be necessary to help them fulfill their duties if they are not compensated. The bill should specify, “Members of the advisory committee shall serve without compensation but shall be reimbursed for travel and necessary expenses.”
   
6. Technical amendment needed. In a letter dated June 3, 2011, Speaker Pérez sent a letter to CalRecycle clarifying the intent of AB 2398 as it relates to the definition of “carpet,” stating, “It was certainly not my intent to exclude wool and other natural fiber carpets from the definition, and I believe the existing definition in its entirety should be interpreted to include wool and natural fiber carpets as well as synthetic face fibers.”
   
   An amendment is needed to §42971(c)(1), which defines “carpet,” by adding “and natural” after “surface of synthetic”.
   
7. Conclusion. The carpet recycling stewardship program needs improvement. CalRecycle and CARE are in the midst of enforcement actions as well as drafting a revised plan that CalRecycle may be able to approve later this year. Questions arise as to how the provisions of this bill would impact these proceedings; and whether they may create potential conflicts should the bill be enacted and a plan be approved. Considering the multiple concerns raised above, the Committee may wish to consider replacing the contents of this bill with the following:
   
   1. Establish a carpet recycling rate goal of 24% by January 1, 2020.
      
   2. On or before January 1, 2023, require CalRecycle to establish a minimum carpet recycling rate requirement.
      
   3. Prohibit a carpet stewardship organization from expending funds from an assessment for any of the following purposes:
      
      1. Penalties imposed pursuant to §42978.
         
      2. Costs associated with litigation against the state.
         
      3. “Engineered municipal solid waste conversion” as defined in PRC §40131.2, use at cement kilns, and transformation as defined in PRC §40201.
         
   4. Maintain Section 3 of the bill, which adds §42972.1 establishing an advisory committee, and add the following to that section:
      
      1. One member to the advisory committee to represent the carpet manufacturers, who is appointed by the Director of CalRecycle.
         
      2. Members of the advisory committee shall serve without compensation but shall be reimbursed for travel and necessary expenses.
         
   5. Amend §42971(c)(1), which defines “carpet,” by adding “and natural” after “surface of synthetic”.
      

SOURCE:

National Stewardship Action Council

SUPPORT:

California Association of Recycling Market Development Zones

California Chapters of the Solid Waste Association of North America’s

Legislative Task Force

California Product Stewardship Council

California Refuse Recycling Council

California Resource Recovery Association

California State Association of Counties

Californians Against Waste

Castro Valley Sanitary District

Central Contra Costa Solid Waste Authority

Changing Markets

City and County of San Francisco

City of Chula Vista

City of Clovis

City of Napa

City of Thousand Oaks

City of Torrance

Clean Water Action

Colorado Medical Waste

DSM-Niaga

East Yard Communities for Environmental Justice

Fiber Commercial Technologies

Full Circle Environmental, Inc.

Global Alliance for Incinerator Alternatives (GAIA)

Institute for Local Self-Reliance

League of California Cities

Los Angeles County Solid Waste Management Committee/Integrated Waste

Management Task Force

Marin Sanitary Service

Mojave Desert and Mountain Recycling Authority

Napa County

Napa Recycling & Waste Services

Nate Miley, Supervisor, Alameda County, District 4

National Stewardship Action Council

Peninsula Sanitary Service, Inc.

Plastic Pollution Coalition

Recology

Recyclist

Salinas Valley Recycles

San Francisco Department of the Environment

Santa Clara County

Seventh Generation Advisors

Sonoma County Waste Management Agency

South San Francisco Scavenger Co.

StopWaste

The Story of Stuff Project

Upper Valley Waste Management Agency

UPSTREAM Policy Institute

Valley Improvement Projects

Varner Bros, Inc.

Western Placer Waste Management Authority

XT Green

Zanker Recycling

Zero Waste USA

1 individual

OPPOSITION:

Carpet & Rug Institute

Carpet America Recovery Effort (CARE)

District Council 16 Painters and Allied Trades

Mohawk Industries

Shaw Industries Group Inc.

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ASSEMBLY THIRD READING

ATR Bill Id:AB 1158

Author:(Chu)

As Amended Ver:

Majority vote

SUMMARY: Creates an advisory committee in the Department of Resources Recycling and Recovery (CalRecycle) to make recommendations on carpet stewardship plans. Requires that the carpet stewardship plan submitted by carpet manufacturers to CalRecycle include a process for receiving and responding to recommendations from the carpet stewardship advisory committee. Specifically, this bill:

1. Creates an advisory committee in CalRecycle to make recommendations on carpet stewardship plans.
2. Requires that the carpet stewardship plans submitted to CalRecycle include a process by which the manufacturer or carpet stewardship organization receives and subsequently responds, in writing, to recommendations of the advisory committee.

EXISTING LAW establishes the Product Stewardship for Carpets Program, which:

1. Requires manufacturers of carpets sold in this state, individually or through a carpet stewardship organization, to submit a carpet stewardship plan to CalRecycle that includes specified elements.
2. Requires CalRecycle, within 60 days after receiving a plan, to review and determine whether the plan complies with the law's requirements and notify the submitter of its decision. Specifies that any plan not approved by March 31, 2012, is out of compliance until determined to be complete by CalRecycle.
3. Requires CalRecycle to post a notice on its website listing manufacturers that are in compliance with the bill's requirements. Requires a wholesaler or retailer that distributes or sells carpets to monitor the website to determine if the sale of a manufacturer's carpet is in compliance.
4. Requires the carpet stewardship organization to demonstrate to CalRecycle that it has achieved continuous meaningful improvement in the rates of recycling and diversion and other specified goals in order to be in compliance.
5. Provides for the imposition of administrative civil penalties upon a person who violates the bill and would provide that the manufacturer or carpet stewardship organization whose plan is not approved by CalRecycle by March 31, 2012, is subject to those penalties until the plan is approved.

FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill has negligible state costs.

COMMENTS: California's carpet stewardship program was created by AB 2398 (Perez), Chapter 681, Statutes of 2010. As an extended producer responsibility (EPR) program, manufacturers (either individually or through their stewardship organization) are required to design and implement their own stewardship program. This means there is a stewardship organization that prepares and implements a plan to reach certain goals, finances and distributes funds to support the stewardship program, and reports to CalRecycle on their progress. CalRecycle's role in the carpet stewardship program is to review and approve plans, check progress, and support industry by providing oversight and enforcement to ensure a level playing field among carpet manufacturers. Other service providers participate in the management system as negotiated with the stewardship organization.

The stewardship plan is a critical part of the program; it defines a compliant program and communicates a course of action to stakeholders and the public. Stewardship organizations (or individual manufacturers that are not represented by a stewardship organization) are responsible for submitting the plans to CalRecycle for approval. Approved plans are posted on CalRecycle's Web site.

The Carpet America Recovery Effort (CARE), based in Georgia, is the carpet industry's stewardship organization. In keeping with AB 2398, CARE is directed to collect an assessment that is sufficient to meet, but not exceed, the anticipated cost of implementing the stewardship plan. In the approved California Carpet Stewardship Plan, the initial ($0.05) per square yard assessment was approved to remain through 2016. On December 28, 2014, CARE submitted and CalRecycle approved an addendum to its approved plan. This addendum provided justification for additional program incentives and enhancements to help CARE achieve compliance. CARE also requested an increase in the assessment from $0.05/square yard of carpet sold in California to $0.10/square yard effective April 1, 2015. On November 30, 2015, CARE submitted an additional addendum to increase the assessment from $0.10/square yard of carpet sold in California to $0.20/square yard effective April 1, 2016. In October 2016, CARE submitted a revised plan to CalRecycle that included an increase in the assessment to $0.25/square yard. CalRecycle disapproved that plan on December 23, 2016. The disapproval states that CARE is to continue operating under the previous plan until a new plan is approved by CalRecycle. On January 16, 2017, CalRecycle conditionally approved Addendum #3 of the plan, with specified modifications. The conditional approval includes increasing the assessment to $0.25/square yard.

CalRecycle found that the plan, "taken as a whole, does not ensure continuous meaningful improvement in carpet recycling and diversion in 2017 and beyond." According to CalRecycle, the plan focuses on existing subsidies that have not demonstrated increased recycling rates; moreover, CARE intends to "scale back" subsidy guarantees going forward. The plan does not address the possibility of providing subsidies to points in the supply chain that may result in significant increases in recycling, such as installer subsidies to increase diversion and recycling, funding for discounted drop-off fees, or subsidies for secondary manufacturers to use post-consumer nylon.

AB 2398 established administrative civil penalties of $1,000 per day ($10,000 for intentional, knowing, or negligent violations). In its disapproval of CARE's October 2016 plan, the director directed staff to delay enforcement action against carpet manufacturers, wholesalers, and retailers for 120 days, "provided the regulatory entity is participating in good faith in continuing to carry out the requirements of the law and CARE's existing plan."

CARE submitted a revised plan to CalRecycle on February 20th, which was considered at CalRecycle's public meeting on April 18th. The plan specifies that with the $0.25/square yard assessment, it expects to collect $23.7 million in 2017. The plan identifies $1.7 million in reuse subsidy payments; $7.1 million in recycling processor payments; $11.1 million in manufacturer payments; just under $1 million in specified grants; and, $6.2 million in "program expenses," which includes $764,142 for CARE salaries and staffing. On April 21st, CalRecycle disapproved CARE's plan based upon a finding that the plan does not comply with statutory requirements. Without an approved plan in place, all manufacturers that sell carpet in California are subject to penalties until they are covered by an approved plan. Additionally, wholesalers and retailers are subject to penalties for selling carpet from non-compliant manufacturers. In order to preserve the recycling infrastructure and avoid market disruptions, CalRecycle authorized manufacturers, wholesalers, and retailers to continue to operate without penalties for 60 days. The director of CalRecycle directed staff to develop a draft plan to help CARE comply with state requirements; the draft plan was discussed at CalRecycle's public meeting on May 16, 2017.

On March 10, 2017, CalRecycle began an enforcement proceeding against CARE for failing to meet the requirement that the carpet stewardship organization is required to achieve "continuous and meaningful improvement in the rates of recycling and diversion of postconsumer carpet subject to its stewardship plan and in meeting the other goals included in the organization's plan." In spite of the significant amount of money collected by CARE from California consumers, CalRecycle found that CARE did not meet these requirements in 2013, 2014, and 2015. After each finding, CalRecycle provided CARE with recommendations on adjustments to the plan that would result in meaningful improvement; however, CARE has not incorporated CalRecycle's suggestions in any subsequent plans. CalRecycle is seeking a total of $3.285 million in penalties: $182,500 for 2013; $1.46 million for 2014; and, $1.6425 million for 2015.

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. / (916) 319-2092 FN: 0000501

Date of Hearing: May 24, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 1158

Author:(Chu) – As Amended Ver:May 8, 2017

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill creates an advisory committee in CalRecycle to make recommendations on carpet stewardship plans, and requires the carpet stewardship plan submitted by carpet manufacturers to CalRecycle to include a process for receiving and responding to recommendations from the carpet stewardship advisory committee.

FISCAL EFFECT:

Negligible state costs.

COMMENTS:

1. Purpose. According to the author, “The carpet industry's inability to meet the legislative performance standards and the goals of its own stewardship plan has and will result in burdens on local governments, crowded landfills, carpet being shipped to Georgia for recycling instead of building California's recycling infrastructure, and incineration of useful material that could otherwise be recycled. As the program run by CARE is being paid for by California consumers, we need to ensure that it will be convenient for California fee payers to recycle carpet. It is beneficial for all for the goals of AB 2396 to be met.
   
   "AB 1158 will form an advisory committee within CalRecycle. This bill will require the carpet stewardship plan to establish a process to receive, consider, and provide reasons for ejecting recommendations from the advisory committee.”
2. Background. California's carpet stewardship program was created by AB 2396 (Perez), Chapter 681, Statutes of 2010. As an extended producer responsibility (EPR) program, manufacturers (either individually or through their stewardship organization) are required to design and implement their own stewardship program. This means there is a stewardship organization that prepares and implements a plan to reach certain goals, finances and distributes funds to support the stewardship program, and reports to CalRecycle on their progress. CalRecycle's role in the carpet stewardship program is to review and approve plans, check progress, and support industry by providing oversight and enforcement to ensure a level playing field among carpet manufacturers. Other service providers participate in the management system as negotiated with the stewardship organization.

The stewardship plan is a critical part of the program; it defines a compliant program and communicates a course of action to stakeholders and the public. Stewardship organizations (or individual manufacturers that are not represented by a stewardship organization) are responsible for submitting the plans to CalRecycle for approval. Approved plans are posted on CalRecycle's website.

1. CARE. The Carpet America Recovery Effort (CARE), based in Georgia, is the carpet industry's stewardship organization. In keeping with AB 2396, CARE is directed to collect an assessment that is sufficient to meet, but not exceed, the anticipated cost of implementing the stewardship plan. In the approved California Carpet Stewardship Plan, the initial assessment ($0.05/ per square yard) was approved to remain through 2016. On December 28, 2014, CARE submitted and CalRecycle approved an addendum to its approved plan. This addendum provided justification for additional program incentives and enhancements to help CARE achieve compliance. CARE also requested an increase in the assessment from $0.05/square yard of carpet sold in California to $0.10/square yard effective April 1, 2015.

On November 30, 2015, CARE submitted an additional addendum to increase the assessment from $0.10/square yard of carpet sold in California to $0.20/square yard effective April 1, 2016. In October 2016, CARE submitted a revised plan to CalRecycle that included an increase in the assessment to $0.25/square yard. CalRecycle disapproved that plan on December 23, 2016. The disapproval states that CARE is to continue operating under the previous plan until a new plan is approved by CalRecycle. On January 16, 2017, CalRecycle conditionally approved Addendum #3 of the plan, with specified modifications. The conditional approval includes increasing the assessment to $0.25/square yard.

CalRecycle found that the plan, "taken as a whole, does not ensure continuous meaningful improvement in carpet recycling and diversion in 2017 and beyond." According to CalRecycle, the plan focuses on existing subsidies that have not demonstrated increased recycling rates; moreover, CARE intends to "scale back" subsidy guarantees going forward. The plan does not address the possibility of providing subsidies to points in the supply chain that may result in significant increases in recycling, such as installer subsidies to increase diversion and recycling, funding for discounted drop-off fees, or subsidies for secondary manufacturers to use post-consumer nylon.

CARE's website identifies locations that accept waste carpet for recycling throughout California. However, despite a goal of having at least one dropoff location in every county, there are only 23 dropoff sites located in 22 counties. There is no information provided for consumers who need to have waste carpet picked up.

As this bill moves through the process, further amendments may be necessary to modify the carpet stewardship program.

Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081

Date of Hearing: April 3, 2017

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Cristina Garcia, Chair

ABPCA Bill Id:AB 1158 (

Author:Chu) – As Introduced Ver:February 17, 2017

SUBJECT: Carpet recycling

SUMMARY: Creates an advisory committee in the Department of Resources Recycling and Recovery (CalRecycle) to make recommendations on carpet stewardship plans. Requires that the carpet stewardship plan submitted by carpet manufacturers to CalRecycle include a process for receiving and responding to recommendations from the carpet stewardship advisory committee.

EXISTING LAW:

1. Under the California Integrated Waste Management Act of 1989, requires each city or county to divert 50% of solid waste from landfill disposal or transformation on and after January 1, 2000. Establishes a statewide policy goal that not less than 75% of solid waste be source reduced, recycled, or composted on and after January 1, 2020.
   
2. Establishes the California Oil Recycling Enhancement Act, which requires manufacturers of used oil to pay a fee of 4 cents per quart (16 cents per gallon) to CalRecycle, which then pays a recycling incentive of 4 cents per quart to industrial generators, curbside collection program operators, and certified used oil collection centers for used oil collected from the public and transported for recycling.
   
3. Establishes the Electronic Waste Recycling Act of 2003, which requires a retailer selling a covered electronic device (CED) in California to collect a recycling fee (between $3 and $5) from the consumer. Fees are deposited into the Electronic Waste Recovery and Recycling Account, which is continuously appropriated to CalRecycle and the Department of Toxic Substances Control (DTSC) to make electronic waste recovery payments to cover the net cost of an authorized collector in operating a "free and convenient" system for collecting, consolidating, and transporting CEDs, and to make electronic waste recycling payments to cover an electronic waste recycler's average net cost of receiving, processing, and recycling CEDs. Defines "CED" as a product that contains a video display device 4 inches and larger.
   
4. Establishes the Cell Phone Recycling Act, which requires every retailer of cell phones to have in place a system for the acceptance and collection of used cell phones for reuse, recycling, or proper disposal.
   
5. Establishes the Rechargeable Battery Recycling Act, which requires every retailer of rechargeable batteries to have in place a system for the acceptance and collection of used rechargeable batteries for reuse, recycling, or proper disposal.
   
6. Establishes the Dry Cell Battery Management Act, which establishes requirements for the production and labeling of consumer products with dry cell batteries and sets limits on the amount of mercury in those batteries.
   
7. Establishes the Mercury Thermostat Collection Act, which requires manufacturers to establish and maintain a program for mercury-added thermostats. Requires the program to include collection, handling, and arranging for appropriate management of mercury-added thermostats.
   
8. Requires pharmaceutical manufacturers that sell or distribute a medication in California that is usually self-injected at home with a hypodermic needle to submit to CalRecycle a plan that describes any actions taken by the manufacturer for the safe collection and proper disposal of the waste devices.
   
9. Establishes the Architectural Paint Recovery Program, which requires architectural paint manufacturers to develop and implement a program to manage waste latex paint.
   
10. Establishes the Used Mattress Recovery and Recycling Act, which requires mattress manufacturers and retailers to develop a mattress stewardship program to increase the recovery and recycling of used mattresses.
    
11. Establishes the Product Stewardship for Carpets Program, which:
    
    1. Requires manufacturers of carpets sold in this state, individually or through a carpet stewardship organization, to submit a carpet stewardship plan to CalRecycle that includes specified elements.
       
    2. Requires CalRecycle, within 60 days after receiving a plan, to review and determine whether the plan complies with the law's requirements and notify the submitter of its decision.  Specifies that any plan not approved by March 31, 2012, is out of compliance until determined to be complete by CalRecycle.
       
    3. Requires CalRecycle to post a notice on its website listing manufacturers that are in compliance with the bill’s requirements.  Requires a wholesaler or retailer that distributes or sells carpets to monitor the website to determine if the sale of a manufacturer’s carpet is in compliance.
       
    4. Requires the carpet stewardship organization to demonstrate to CalRecycle that it has achieved continuous meaningful improvement in the rates of recycling and diversion and other specified goals in order to be in compliance.
       
    5. Provides for the imposition of administrative civil penalties upon a person who violates the bill and would provide that the manufacturer or carpet stewardship organization whose plan is not approved by CalRecycle by March 31, 2012, is subject to those penalties until the plan is approved.
       

THIS BILL:

1. Creates an advisory committee in CalRecycle to make recommendations on carpet stewardship plans.
   
2. Requires that the carpet stewardship plans submitted to CalRecycle include a process by which the manufacturer or carpet stewardship organization receives and subsequently responds, in writing, to recommendations of the advisory committee.

FISCAL EFFECT: Unknown

COMMENTS: Unknown

1. Author's statement:

The carpet industry's inability to meet the legislative performance standards and the goals of its own stewardship plan has and will result in burdens on local governments, crowded landfills, carpet being shipped to Georgia for recycling instead of building California's recycling infrastructure, and incineration of useful material that could otherwise be recycled. As the program run by CARE is being paid for by California consumers, we need to ensure that it will be convenient for California fee payers to recycle carpet. It is beneficial for all for the goals of AB 2396 to be met.

AB 1158 will form an advisory committee within CalRecycle. This bill will require the carpet stewardship plan to establish a process to receive, consider, and provide reasons for ejecting recommendations from the advisory committee.

1. Carpet stewardship. California's carpet stewardship program was created by AB 2396 (Perez), Chapter 681, Statutes of 2010. As an extended producer responsibility (EPR) program, manufacturers (either individually or through their stewardship organization) are required to design and implement their own stewardship program. This means there is a stewardship organization that prepares and implements a plan to reach certain goals, finances and distributes funds to support the stewardship program, and reports to CalRecycle on their progress. CalRecycle's role in the carpet stewardship program is to review and approve plans, check progress, and support industry by providing oversight and enforcement to ensure a level playing field among carpet manufacturers. Other service providers participate in the management system as negotiated with the stewardship organization.

The stewardship plan is a critical part of the program; it defines a compliant program and communicates a course of action to stakeholders and the public. Stewardship organizations (or individual manufacturers that are not represented by a stewardship organization) are responsible for submitting the plans to CalRecycle for approval. Approved plans are posted on CalRecycle's website.

1. CARE. The Carpet America Recovery Effort (CARE), based in Georgia, is the carpet industry's stewardship organization. In keeping with AB 2396, CARE is directed to collect an assessment that is sufficient to meet, but not exceed, the anticipated cost of implementing the stewardship plan. In the approved California Carpet Stewardship Plan, the initial ($0.05) per square yard assessment was approved to remain through 2016. On December 28, 2014, CARE submitted and CalRecycle approved an addendum to its approved plan. This addendum provided justification for additional program incentives and enhancements to help CARE achieve compliance. CARE also requested an increase in the assessment from $0.05/square yard of carpet sold in California to $0.10/square yard effective April 1, 2015. On November 30, 2015, CARE submitted an additional addendum to increase the assessment from $0.10/square yard of carpet sold in California to $0.20/square yard effective April 1, 2016. In October 2016, CARE submitted a revised plan to CalRecycle that included an increase in the assessment to $0.25/square yard. CalRecycle disapproved that plan on December 23, 2016. The disapproval states that CARE is to continue operating under the previous plan until a new plan is approved by CalRecycle. On January 16, 2017, CalRecycle conditionally approved Addendum #3 of the plan, with specified modifications. The conditional approval includes increasing the assessment to $0.25/square yard.

CalRecycle found that the plan, "taken as a whole, does not ensure continuous meaningful improvement in carpet recycling and diversion in 2017 and beyond." According to CalRecycle, the plan focuses on existing subsidies that have not demonstrated increased recycling rates; moreover, CARE intends to "scale back" subsidy guarantees going forward. The plan does not address the possibility of providing subsidies to points in the supply chain that may result in significant increases in recycling, such as installer subsidies to increase diversion and recycling, funding for discounted drop-off fees, or subsidies for secondary manufacturers to use post-consumer nylon.

CARE submitted a revised plan to CalRecycle on February 20^th, which is scheduled to be considered at CalRecycle's public meeting on April 18^th. The plan specifies that with the $0.25/square yard assessment, it expects to collect $23.7 million in 2017. The plan identifies $1.7 million in reuse subsidy payments; $7.1 million in recycling processor payments; $11.1 million in manufacturer payments; just under $1 million in specified grants; and, $6.2 million in "program expenses," which includes $764,142 for CARE salaries and staffing.

CARE's website identifies locations that accept waste carpet for recycling throughout California. However, despite a goal of having at least one dropoff location in every county, there are only 23 dropoff sites located in 22 counties. There is no information provided for consumers who need to have waste carpet picked up.

1. Enforcement. AB 2396 established administrative civil penalties of $1,000 per day ($10,000 for intentional, knowing, or negligent violations). In its disapproval of CARE's October 2016 plan, the director directed staff to delay enforcement action against carpet manufacturers, wholesalers, and retailers for 120 days, "provided the regulatory entity is participating in good faith in continuing to carry out the requirements of the law and CARE's existing plan."

On March 10, 2017, CalRecycle began an enforcement proceeding against CARE for failing to meet the requirement that the carpet stewardship organization is required to achieve "continuous and meaningful improvement in the rates of recycling and diversion of postconsumer carpet subject to its stewardship plan and in meeting the other goals included in the organization's plan." In spite of the significant amount of money collected by CARE from California consumers, CalRecycle found that CARE did not meet these requirements in 2013, 2014, and 2015. After each finding, CalRecycle provided CARE with recommendations on adjustments to the plan that would result in meaningful improvement; however, CARE has not incorporated CalRecycle's suggestions in any subsequent plans. In fact, the recycling rate for carpet dropped from 12.1% to 10% in 2015. CalRecycle is seeking a total of $3.285 million in penalties: $182,500 for 2013; $1.46 million for 2014; and, $1.6425 million for 2015.

1. Suggested amendment. This bill establishes an advisory committee within CalRecycle. The committee may wish to amend the bill to specify that members of the advisory committee are appointed by the director of CalRecycle, and that the Speaker of the Assembly and the Senate Rules Committee each appoint one member.

REGISTERED SUPPORT / OPPOSITION:

Support

Californians Against Waste

California Product Stewardship Council

California State Association of Counties

City and County of San Francisco

City of Clovis

City of Napa

City of Thousand Oaks

Clean Water Action

Colorado Medical Waste

Full Circle Environmental, Inc.

Marin Sanitary Service

Napa County

Napa Recycling and Waste Services

Nate Miley, Supervisor, Alameda County, District 4

National Stewardship Action Council (sponsor)

Peninsula Sanitary Service, Inc.

Salinas Valley Recycles

San Francisco Department of the Environment

Santa Clara County

Sonoma County Waste Management Agency

South San Francisco Scavenger Co.

StopWaste

Upper Valley Waste Management Agency

UPSTREAM Policy Institute

Varner Bros, Inc.

XT Green

Zanker Recycling

1 individual

Opposition

None on file

Analysis Prepared by: Elizabeth MacMillan / NAT. RES. /