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, and requires the department to approve or disapprove the plan. Existing law imposes a carpet stewardship assessment per unit of carpet sold in the state that is remitted by carpet manufacturers to the carpet stewardship organization and may be expended to carry out the organizations carpet stewardship plan. Existing law requires the carpet stewardship plan to provide sufficient funding to carry out the plan, including for grants to state-approved apprenticeship programs for training apprentice and journey-level carpet installers in proper carpet recycling practices.

This bill would would, commencing with the July 1, 2024, fiscal year require a carpet stewardship organization, as part of its carpet stewardship plan, from the assessments received for carpets sold for use in California, to expend at least 95% on activities to carry out the carpet stewardship plan within California, and at least 10% a carpet stewardship organization to make available up to 10% percent of the assessments collected for the sale of carpet for use in California for grants to apprenticeship programs for training apprentice and journey-level carpet installers in proper carpet recycling practices. practices, as provided.

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, and requires the department to approve or disapprove the plan. Existing law imposes a carpet stewardship assessment per unit of carpet sold in the state that is remitted by carpet manufacturers to the carpet stewardship organization and may be expended to carry out the organizations carpet stewardship plan.

This bill would require a carpet stewardship organization, as part of its carpet stewardship plan, from the assessments received for carpets sold for use in California, to expend at least 95% on activities to carry out the carpet stewardship plan within California, and at least 10% for grants to apprenticeship programs for training apprentice and journey-level carpet installers in proper carpet recycling practices.

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Allen, Chair

2023 - 2024 Regular

Bill No: SB 854

SUBJECT: Carpet recycling: carpet stewardship.

DIGEST: Requires that 95% of funds from assessments on carpets sold in California, as part of the State’s Carpet Extended Producer Responsibility Program, be expended on carpet stewardship activities in California. Requires that 10% of these funds go towards grants to train apprentice and journey-level carpet installers on carpet recycling practices.

ANALYSIS:

Existing law:

1. Establishes the Product Stewardship for Carpets Program to increase the amount of post-consumer 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. (PRC §42970 et seq.)
2. Requires manufacturers of carpets sold in California to submit a carpet stewardship plan to the Resources Recycling and Recovery (CalRecycle) including goals for recycling used carpet. (Public Resources Code (PRC) §42972)
3. Requires the carpet stewardship plan to establish a carpet stewardship assessment per unit of carpet sold in the state to fund the carpet stewardship plan. The assessment is remitted to the organization to carry out the Carpet Stewardship Plan, including the administrative, operational, and capital costs of the Plan. (PRC §42972(a)(7))
4. Includes a process by which the financial activities of the organization or individual manufacturer that are related to the implementation of the plan will be subject to an independent audit, which may be reviewed by CalRecycle. (PRC §42972(6)).
5. Requires that some of the funds from carpet assessments be allocated for grants to state-approved apprenticeship programs for training apprentice and journey-level carpet installers in proper carpet recycling practices. (PRC §42972(4)).
6. Establishes an advisory committeeto make recommendations on carpet stewardship plans submitted to CalRecycle. The advisory committee shall include at least one member who is a representative of either the Southern California Resilient Floor and Decorative Covering Crafts Joint Apprenticeship and Training Committee or the Northern California Floor Covering Finishing Trades Institute Joint Apprenticeship Training Committee (PRC 42972.1)

This bill:

1. Requires that 95% of funds from assessments on carpets sold in California, as part of the State’s Carpet Extended Producer Responsibility Program, be expended on carpet stewardship activities in California.
2. Requires that 95% of funds from assessments on carpets sold in California, as part of the State’s Carpet Extended Producer Responsibility Program, be expended on carpet stewardship activities in California.
   

Background

1. Introduction to California’s Carpet EPR Program. Discarded carpet is one of the 10 most prevalent waste materials in California landfills, comprising more than three percent of waste by volume disposed of in California in 2008. To divert carpets from landfills and recycle carpets into other products, California established a carpet stewardship program, created by AB 2398 (Perez, Chapter 681, Statutes of 2010). The Carpet Stewardship Program is an extended producer responsibility (EPR) program. EPR is a strategy that places shared responsibility for end-of-life product management on the product producers and all entities involved in the product chain, instead of on the general public and local governments.

Under the carpet EPR program, manufacturers or distributors of carpets are required to design and implement their own stewardship program to reach certain carpet recycling goals. The program is funded by assessments paid by manufacturers per yard of carpet sold. The stewardship organization that currently operates California’s carpet stewardship program, with direction and oversight from CalRecycle, is the Carpet America Recovery Effort (CARE). CARE is a third-party nonprofit carpet stewardship organization based in Georgia. The law allows other stewardship organizations to submit stewardship plans to CalRecycle for approval, but CARE is currently the only carpet stewardship organization in California.

1. Lifecycle of a Carpet in the stewardship program. Carpets are part of the Carpet EPR program if they are made or imported into California. Carpets are collected through a network of collection sites overseen by CARE. Collected carpets are then sorted and shipped to a recycling facility, where they are downcycled into building products (e.g., insulation for commercial buildings).
2. Funding Mechanism for the Carpet EPR. The Carpet EPR program is funded by an assessment fee which is currently less than 50 cents per square yard of carpet sold in the State. The assessment is collected by retailers or dealers when they sell carpets in California. Retailers or dealers are then reimbursed by manufacturers on a quarterly basis. CARE allocates the money to run the Carpet Stewardship Program. This includes funding three primary elements: subsidies (77.7%), program expenses (14.0%), and administration expenses (8.4%).
   
3. Current Apprenticeship funding. In 2021, CARE reported that they budgeted $100,000 per year for incentives and grants to support state-approved apprenticeship programs for training apprentice and journey-level carpet installers in proper carpet recycling practices.

Comments

1. Purpose of Bill. According to the author, “the current grant program [in the Carpet Stewardship Program] provides no funding to Finishing Trades Institute of District Council 36, Southern California Resilient Floor, Carpet, Synthetic Turf & Decorative Covering Crafts JATC and Finishing Trades Institute of Northern CA and Nevada Trust. A permanent funding stream will address the industry needs. This Bill would expand the recruitment in underrepresented communities.”
   
2. Carpets are (mostly) made outside of California. According to the list of manufacturers covered in the California Carpet Stewardship Plan and associated California Carpet Stewardship Program published by CalRecycle, there are only four carpet manufacturers in the Carpet Stewardship Program based in California out of a total of 71 manufacturers. Since many recycling facilities are co-located with manufacturing facilities, requiring that 95% of money in the program be expended in California could severely limit the number of recycling centers eligible for incentives from the Stewardship Program. While there are Carpet recycling facilities in California, the program currently selects recycling facilities based on their market competitiveness and capacity.

Suggested amendment: It is unclear whether requiring 95% of the Carpet Stewardship Program dollars be expended to advance recycling in California would make the Program inoperable. The author and committee may wish to remove this provision from the bill.

1. How much money should go to apprenticeship and training programs? In 2021, the total income for the Carpet Stewardship Program was $23.6 million. Of this amount, approximately four percent was spent on grants. Of the money expended on grants, $100,000 was allocated to union-based training centers for flooring professionals. Programs that train apprentice and journey-level carpet installers on carpet recycling practices may also be eligible for microgrants ($15,000 per applicant) that are available to public or private businesses, nonprofits, public Drop-off Sites, and Collector/Sorters, and California public agencies for new and existing collection or reuse programs.

Currently, flooring professionals play a critical but relatively small role in the carpet recycling process by removing old flooring and ensuring it is handled correctly and ready to be sent to the next step of the carpet recycling process: collection, sorting, and recycling. A 10% carve out for just training and apprenticeship programs (an estimated $2.3 million) may not be justified. To understand whether this is an appropriate allocation it is necessary to know:

(1) How significant is the current role of apprentice and journey-level carpet installers in the carpet stewardship program?

(2) How would allocating 10% of grants to training flooring installers limit funding for other businesses or impact the operations of the program?

(3) Will there be enough interest from apprentice and journey-level carpet installers for this highly specific grant funding to use 10% of the carpet program funds?

Suggested amendment: To ensure that the money allocated to apprenticeship and training programs is actually needed, the author and committee may wish to allocate 10% of funding for these grants only if there are enough eligible applications for this funding. The author and committee may also wish to consider adding reporting requirements for these grants.

1. Committee amendments. Staff recommends the committee adopt the bolded amendments contained in comments 2 and 3 above.

Related/Prior Legislation

AB 2398 (Pérez, Chapter 681, Statutes of 2010) establishes the California Carpet Stewardship Program.

AB 729 (Chu, Chapter 680, Statutes of 2019), beginning January 1, 2020, increases a portion of non-compliance penalties for the Carpet Stewardship Program from $1,000 per day to $5,000 per day, and requires carpet stewardship plans to include a contingency plan should the plan terminate or be revoked by CalRecycle.

AB 1158 (Chu, Chapter 794, Statutes of 2017) establishes an advisory committee for the carpet stewardship organization, which includes representation from either the Southern California Resilient Floor and Decorative Covering Crafts Joint Apprenticeship and Training Committee or the Northern California Floor Covering Finishing Trades Institute Joint Apprenticeship Training Committee.

SOURCE:

District Council 36 - Painters and Allied Trades

SUPPORT:

Circular Polymers

National Stewardship Action Council

OPPOSITION:

Carpet & Rug Institute

ARGUMENTS IN SUPPORT:

The National Stewardship Action Council writes in support:

“Apprenticeship programs for training apprentice and journey-level carpet installers in proper carpet recycling practices decreases the amount of carpet landfilled due to proper training to ensure it removed clean, dry, and properly rolled. SB 854 would ensure apprenticeship programs and journey-level carpet installers are properly trained in carpet recycling practices which should have been part of CARE’s program all along”

ARGUMENTS IN OPPOSITION:

The Carpet and Rug Institute writes in opposition:

“As written, SB 854 would require that 10% or approximately $3 million of all assessments collected under the California carpet stewardship program shall be expended on grants to apprenticeship programs. Diverting this money from the real needs of the program, subsidies to the collectors and processors of carpet materials, would have a catastrophic impact on these businesses.”

“Unfortunately, proponents of this bill have not provided any information as to how the 10% was calculated and how the money would be specifically used. It is important to remember that consumers pay the fees for this program, and it is their expectation and CARE’s responsibility that the money collected be used directly to assist in the taking back and recycling of carpets in California.”

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