Senate Standing Committee on Environmental Quality

Joining us today, I would like to call us into order for the informational hearing on Extended Producer Responsibility programs and I would like to thank my colleagues and the panelists and the members of the public who are participating today.

I'm very excited to convene this informational hearing in my new role as the Chair of the Senate Environmental Quality Committee, knowing that we will likely have many more EPR discussions in this Committee in the future. Welcome. We're just getting started.

Today's hearing is titled Extended Producer Responsibility in Policy Progress and Pitfalls and I'm a strong believer that EPR can drive real world systems level change and help the state reach its waste diversion and recycling goals. EPR is particularly useful for products with difficult end of life management.

The last few years have seen large new EPR programs signed into law in California, including EPR for textiles, for batteries, and of course for the packaging and single use plastics in our landmark legislation of SB54. We have the author of SB54 sitting right here to my left.

Yes, as new EPR legislation is proposed every year, we have an opportunity to learn from what has and hasn't worked in our older EPR programs. I believe that the model of epr developed in SB54, which captures a big universe of products, has clear recycling and source reduction mandates and a strong enforcement process.

Those are all reflections of the many lessons that were learned and a new philosophy that is driving stronger EPR policies. They are all keys to the success of SP54. It's also important to remember that there is no other feasible way to meaningfully reduce the pollutant that is plastic.

Besides an EPR program, approximately 150 million metric tons of plastic is already circulating in the marine environment and less than 9% of plastic is recycled. Less than 9% new plastic is made from fossil fuels and comes with a high carbon cost. Plastic is the fastest growing source of industrial greenhouse gases in the world.

Plastic generates 4% of total global greenhouse gas emissions, but could be responsible for as much as 19% of global greenhouse gas emissions by 2040 if we continue with a business as usual scenario.

So we need producers of the material at the table, committed to a circular economy and to overall waste reduction and acting as fast as possible if we stall and fail to get off the ground. With SB54, there is no alternative to the growing mountain of plastic waste and the world is watching us.

I know that the SB 54 regulations, which must be authorized by March 8, are top of mind for many of us here today. Two weeks ago I wrote a letter with Senator Allen, the author of SB54 to my left, and signed by many of my colleagues, urging the Governor to ensure those regulations move forward without delay.

The regulations can always be modified, clarified, tweaked, and amended. But we must get started. Going back to the drawing board is not the right move. This is now three years after the Bill was passed and we need to get moving. My stance on SB54 is clear.

However, I also want to be clear that the scope of the hearing today is broader than SB54 and I want to mention a few of the other things that are really important. One particularly difficult item that needs an end of life management in California is pyrotechnic marine flares.

So I'm running a Bill again this year to establish an EPR program for expired marine flares, which are an explosive hazardous waste. There is currently no facility in California that has the permits to dispose of these flares. An EPR for marine flares rightfully shifts responsibility for managing the expired flares to those who manufacture and use them.

Since the Bill was vetoed last year, my team and I have worked with both TTSC and CalRecycle to address the concerns raised in the Governor's veto message last year. Just last week, I introduced this Bill, SB561, that will provide voters with a safe and responsible method to dispose of their marine flares.

SB561 offers a comprehensive program scope to effectively protect human and environmental health and provides DTSC with the appropriate enforcement authority to to effectively ensure compliance. And I look forward to continued successful collaboration with DTSC to pass SB 561 into law and get it signed by the Governor this year.

My hope for this informational hearing is to hear from the many stakeholders and key stakeholders many of the lessons that we have learned from previous EPR programs so that we can inform our future EPR programs because I do expect that we will continue to have many of them for many more products in the future.

EPR is a complex policy framework and it deserves our dedicated attention. We have a big lineup to cover and a lot on the agenda, so I encourage the panelists to be concise in their statements so that we can make sure we have questions that can be answered from the dais for today's hearing.

We'll hear all the panelists on the panel and then we'll take questions from the dais. I'm Planning up to 20 minutes of questions from us at the end of each panel before going to the next panel. And once we've heard from all Three panels.

We will have a public comment period for those who wish to comment on today's agenda. Before I hand it over, I would like to thank Bryn for the immense amount of coordination for today's panel. Thank you very much for your work.

And with that, I will ask my colleagues if they'd like to make any opening comments, and then we will introduce the first panel.

Well, thank you, Madam Chair. Thank you for convening this conversation. We've all been working hard on EPR issues for the past couple of years, and it's really important for us to take a deep dive into the successes and lessons learned so far. I'm an enthusiastic supporter of your efforts.

We've got a couple of EPR bills that we're working on right now in the household hazardous waste and electric vehicle battery space. I know there's a number of our colleagues that have been working on. There's several, several bills that have passed that are in the works right now. But it's important that we get this right.

You know, I know we've, we're very anxious to get the regulations moving on SB54. We did a letter on it, as was mentioned. We're certainly hopeful that whatever challenges or issues will get quickly resolved so that this process can move along as stipulated by SB54. So that's an important part of this conversation as well.

But I wanted to be here because this topic is of immense importance to me personally. And I just want to thank the Committee for pulling this together and the wonderful staff who I know very well for their leadership on this issue over many, many years, and look forward to the discussions.

Thank you. So with that, we have Zoe Heller, who's Director of the California Department of, Resources, Recycling and Recovery, also known as CalRecycle, and Katie Butler, Director of the Department of Toxic Substances Control. So thank you to both of you.

All right. Good afternoon, Madam Chair and Members and staff.

Thank you very much for having me here today and also having me with my colleague, Director Butler, as we are getting more and more extended producer responsibility programs, the coordination between us is critical and we are coordinating and talking, which is really important for us to meet our shared environmental goals. All right.

Today, I hope to provide a clear understanding of how CalRecycle implements EPR. EPR makes industry responsible for funding these programs, the recycling, the collection, the proper disposal, et cetera. So it shifts that responsibility. And I'll be hitting on that theme a lot throughout my remote.

So over the last century, our disposal centered economic model has contributed to the climate and waste crisis that we're in today.

The consequences are evident daily, from pollution in our communities and our waterways, to microplastics in our food and our environment and our bodies, and to billions of dollars in damage each year from extreme weather events like what we're dealing with in Los Angeles right now with the wildfires. So to address these urgent environmental and economic challenges, we.

One of the actions that California is taking is shifting towards a circular economy. One that prioritizes reducing and reusing and recycling our resources.

And we recognize that this journey towards a circular future is not easy as we know the way in which we're addressing many issues right now is material by material and looking for opportunities for more holistic approaches.

And for us to get this done, we have to continue to collaborate, have open dialogue about these issues, best pathways to address them, and and partnerships. So historically, consumers and local governments have borne the burden of managing products and materials at the end of their life.

Extended producer responsibility laws are central to our strategy for a circular economy future. Because these laws hold producers accountable for the entire life cycle of these products, they support recycling and materials management goals that minimize environmental impacts and importantly make recycling convenient and then most importantly, reduce waste management costs. Across the board.

EPR incentivizes industry to design with less waste and easier reuse and provide that convenient collection to get materials reused, recycled and properly disposed. So as you mentioned, California EPR programs have evolved quite a bit over the years.

A key catalyst for California's embrace of Epr was in 2006, when residents could no longer dispose of of universal waste in the trash. Instead, that burden fell on local governments to Fund safe collection and management of these really hard to manage and very expensive products.

With limited funding to manage these wastes, California saw increased support for policies like extended producer responsibility. So the first program was passed, Mercury thermostat, which my colleagues over at DTSC have. And then carpet and paint and mattresses, pharmaceuticals and sharps packaging. An EPR like expansion to our beverage container recycling program, Paint products and textiles.

And then you mentioned the programs that are being considered right now. So a lot of expansion, building off the successes of previous programs and our existing programs have made a significant impact. Just going to share some numbers because they're very meaningful.

California has collected 34 million gallons of paint, 11 million mattresses, 1 million pounds of pharmaceutical and sharps and 1 billion pounds of carpet since the inception of those programs. I wanted to share some of the key components CalRecycle has identified for successful EPR implementation. And this is from implementation of all of our programs over the years.

So first identifying clear roles and responsibilities of the entities that are responsible for successfully carrying out the program. The second is identifying the lead oversight and enforcement agencies and any other state agencies with authority. For example, Loose Battery epr, which we're currently in the regulatory development process for, has clear roles for both CalRecycle and DTSD.

Director Butler and I coordinate closely and will continue as we develop and implement this program and others. Programs should include enforceable performance standards such as establishing free, free and convenient collection sites and the dates in which they must be achieved.

EPR laws also identify information and data required in plans which describe how the industry will meet critical requirements such as establishing funding mechanisms, establishing the collection and processing infrastructure, and public education which is a key component to EPR success.

They should identify record keeping, auditing and reporting requirements so data and information is provided to the oversight agency to verify compliance with performance standards and requirements. And laws need to include mechanisms to ensure compliance such as civil penalties for failure to achieve program requirements.

My colleague Mark Debie will be coming up at a later panel to talk more about enforcement and how CalRecycle takes that on. You mentioned 54.

It's front and center on everybody's mind and just a reminder of the exciting and aggressive goals with 54 by 2032, implementation of 54 will require producers to cut single use plastic waste by 25% and ensure that 65% of it is recycled and make all single use packaging that's sold into the state reusable, compostable and recyclable.

That's incredibly exciting and needed for the challenges that we're facing today. And then by 2037 producers will have paid 5 billion into a state managed Fund to address the impacts of single use plastics on communities throughout California.

This shifts the responsibility for a significant share of plastic waste management from consumers, local governments and small businesses to the producers of single use packaging and food serviceware.

I mentioned the expansion of the Bottle Bill program to include dealer Cooperatives which is an EPR like program where dealers will form or join a 501A non profit to offer convenient collection and recycling opportunities to communities that don't currently have those so options like reverse vending machines, mobile recycling solutions. I've mentioned loose battery epr.

We're starting those regulations as well, a critical program to address the over 800 million batteries that Californians use each year. Too often illegally disposed batteries are exploding and starting fires that endanger workers and cause millions of dollars of damage each year. And beyond the immediate dangers with improper battery management there's also incredible opportunity.

Batteries contain valuable metals such as copper, nickel and lithium, which are often installed in short supply. An EPR for batteries will provide convenient collection and increase recycling, keeping valuable materials in circulation and reduce our reliance on mining resources.

We're also kicking off our process for the Responsible Textile Recovery act, another very exciting and needed program for the State of California. This is the first program of its kind in the nation to combat the environmental impacts of waste in the textile industry. In the U.S. 13% of textile waste is recycled, while 87% is disposed or incinerated.

Despite historically Low textile recycling rates, 95% of discarded textiles are reusable or recyclable. And SB707 requires producers through EPR to increase repair, reuse, recycling and proper management of textiles. So it will take all of us to achieve California's climate and circular economy goals.

California is building on the success of EPR programs to move from a disposable economy to a circular economy. And by making producers accountable for their products, we incentivize smarter design, we reduce waste and spur innovation for recycling in the state. So thank you again for inviting me to speak today.

Together we can build a more circular future that will benefit Californians in generations to come. Thank you.

Thank you for this opportunity. Madam Chair and Director Heller did a great job covering the EPR programs in General and when it comes to calrecycles jurisdiction. So I will focus on the hazardous waste aspects of EPR and particularly when it comes to managing hazardous waste.

There are specific aspects, characteristics of hazardous waste that we have to keep in mind when thinking about EPR implementation. And in the coming month, we'll be coming out with a hazardous waste management plan where the goals of circular economy, more sustainable management, reducing waste, all while protecting health and the environment, will be front and center.

Those are the north stars of our hazardous waste management plan that we'll be coming out with. And EPR is a critical tool to achieving those goals. So hazardous waste is a subset of solid waste and is subject to significantly more requirements just due to the inherent risks of hazardous waste. We're dealing with flammable, ignitable, reactive toxic wastes.

And there are specific guardrails or limits on how those types of wastes can legally be managed and safely managed. So given these factors, EPR programs for hazardous waste are most successful when a fit for size approach is taken.

And this allows us to consider the specific hazardous waste characteristics, the management standards, standards for the specific waste, and carefully weigh what is the potential risk for human health and environmental harm if mismanaged.

Other considerations that we take into mind for EPR programs for hazardous waste are to craft program goals to ensure that compliance with the program doesn't unintentionally lend itself to mismanagement of hazardous waste. And what do I mean by that?

For example, ambitious recycling goals could be set, but for hazardous waste it takes time to develop legitimate recycling infrastructure. And without that recycling infrastructure in place, the recycling goals, if not set in a phased thoughtful approach, could end up incentivizing sham recycling, for example. Enforcement. Enforcement is two sided for DTSC when we're thinking about hazardous waste epr.

One enforcement of the program itself that Director Heller mentioned. Two, enforcement of hazardous waste laws as well. And it's often an indication for us if an EPR program is not compliant with the program requirements that there's also hazardous waste law non compliance occurring at the same time.

And so we have the responsibility at DTSC to ensure that those hazardous waste laws are also being enforced. When it comes to DTSC's role in EPR programs now we coordinate closely with our colleagues at CalRecycle on implementing covered products that are hazardous at end of life. And that crosses into our oversight.

So during EPR program development we're often consulting with CalRecycle, reviewing proposed regulations, working side by side to ensure that the program implementation is consistent with any hazardous waste laws or requirements. The mercury thermostat program that DTSC has oversight over has been successful. It has managed the diversion of a significant amount of mercury from improper management.

So any thermostat made prior to 2006 can be disposed of safely. Consumers have more access, better points of access to dispose of these mercury thermostats. And almost 92 pounds for example in 2023 was diverted from landfills and recycled. When we're dealing with something as toxic as mercury, that matters.

Only one gram of mercury is enough to contaminate a 20 acre lake. So when we're diverting 92 pounds, that's the equivalent of seven lake tahoes that were preventing that contamination if it was illegally disposed of or dumped improperly.

So in considering other policy measures as well, like product ban bills, which was implemented side by side with the mercury thermostat EPR program shows us as well that EPR programs don't have to extend into perpetuity.

For example, if it's paired with a ban Bill as well, then that EPR program only lasts as long as that product is still in consumers hands. So for the mercury thermostat EPR program, it is set to be repealed in 2033.

And by that time, the goal, of course, is to have properly disposed of the mercury thermostats that are now in households. So DTSC is still working through what specific wastes make the best candidates for EPR programs.

But there are a couple options that we recommend starting with, and they've been mentioned already, the waste that are expensive or difficult for local governments to manage, such as explosives, flammables, marine flares, as you mentioned, Senator, with very limited disposal options, waste that have existing alternative management standards, such as universal wastes, and considering those alternative management standards in the implementation.

So when considering what covered products to put in an EPR program, we recommend also that the covered products have similar management methods at the end of life. And this ensures that all of the manufacturers and producers can utilize the same management chain and will encourage more timely and less costly implementation.

There should also be enough covered products in the program to ensure that oversight costs are not too burdensome. So it's really hitting that sweet spot of looking at the number of products that would be covered by an EPR program DTSC has.

And we will continue to work with Members who are interested in crafting EPR programs to determine the most efficient, most effective scope of covered products for an EPR program. Thank you.

Well, thank you very much. Do you have any questions? Senator Allen okay. Well, thank you. We appreciate you. So now we'll go to panel one. That was our introductory remarks from our two Department directors. Panel one is, when is EPR the right tool for handling a tricky waste stream?

And we will invite up Nick Lapis from Californians Against Waste, Thomas Helm from Valley Improvement Project, and Dawn Kupke from California Manufacturers Association.

I don't need anything.

Okay. Feel free to start.

Hi. Good afternoon. Nick Lapis with Californians Against Waste. I'm the Director of Advocacy for the organization. I want to start off by thanking you for holding this hearing. This is a very important topic that we tend to only talk about in the context of an individual product, an individual bill with lobbyists worked up one way or another, and it's good to be able to discuss it at a higher level.

I really wanted to start off by level-setting for the rest of the hearing, and I'll just make a note that I realize that some of the future speakers will be more focused on SB 54, so per Brin's suggestion, I will be focused on the non-SB 54 programs.

While there's often a focus on whether or not something should be done via EPR or a state-run program, I'm not sure that's actually a very helpful distinction. The priority should be on ensuring that producers are responsible for the end-of-life management of the products and packaging that they make.

To be clear, CAW has sponsored both legislation that was implemented by producer responsibility organizations, including mattresses, paint, batteries, and legislation that was implemented by the state, notably the Bottle Bill, the E-Waste Program. We've also been very closely involved in the implementation of the other programs as well.

Both approaches are just tools in a toolbox, and neither is a silver bullet. Ideally, California can learn from the successes and mistakes of both systems as we develop future programs. So let's start with the manufacturer-run programs. The Mattress and Paint Programs have largely--actually, I'm sorry--these programs have had some significant successes.

The Mattresses and Paint Programs have largely operated as intended. Despite some hiccups along the way, consumers largely have access to the collection infrastructure for these products in most of the state. And Dr. Heller talked about the statistics of the amount of paint recovered, the amount of mattresses recovered.

And, a lot of that comes down to having a willing partner in the industry that is engaging in good faith and achieving the goals of the program. Under the right condition, producer-run programs can also lead to product redesign by creating a feedback loop on the recyclability of the product.

And finally, I'll say that CalRecycle has proven to be a very capable regulator of producer-run programs, willing to get into the minutiae of running the programs in a way that the Legislature can't sometimes because it is so detailed and wonky. But these programs have also had their share of problems.

For one, we've seen PROs use fee-payer money in ways that I think the initial authors of the bills would probably find objectionable. In an infamous example, the Carpet Program--and I'm going to try not to pick on programs, but I will just for this one--an infamous example, the Carpet Program used fee-payer money to both pay the fines that CalRecycle levied on them and to hire lobbyists to limit further regulation of their industry. That is clearly not appropriate.

But even when it isn't so brazen, there can be a fine line between funding public education and advocacy or lobbying. An example that comes to mind is a few years ago, I started seeing billboards all over town for one of our producer-run programs talking about how much they have recycled, and I started seeing ads in every political newsletter and in the SAC Bee, and I was curious about how much money they were spending on advertising statewide, so I went into their budget and it was actually a very small education outreach budget.

So just connecting those dots, it seems like the majority of that money was spent on public education towards you all, not towards consumers about how to recycle their products. We've also seen some other issues. Some programs have structured take-back opportunities to drive consumers to their own businesses. Others have even required their grantees to agree not to support legislation in other states based--as a condition of receiving funding in California.

Finally, there could be a tendency for an industry-run program to find the cheapest way possible to comply with the law, which often means sending material to incinerators and related technologies instead of investing in much more complicated, much more difficult circular recycling solutions. Now onto state-run programs. California's Bottle Bill is unique.

It is the only state-run program in the country. All the others are run by producer responsibility organizations. Because it is a state-run program, the Legislature has been able to make policy decisions that would likely not be implemented by producers alone. There are millions of examples, but I'll just highlight a couple.

The Legislature has allocated unredeemed funds from the Bottle Bill to fund workforce development through their local Conservation Corps. The local Conservation Corps engage in important work that goes way beyond recycling, and funding them is a priority for this Legislature, even if it's not the most cost-effective way to recycle a bottle or a can.

California's program is also unique in funding curbside recycling. The City of LA operates the state's largest curbside collection program and every bottle and can that goes into a recycling bin in Los Angeles helps reduce rates. This also changes the economics of recovering these materials at material recovery facilities and so the MRFs in California end up recycling beverages that other states do not because of the funding for curbside recycling.

And while we often think of the Bottle Bill as a deposit system, it is also, in my opinion, the earliest example of true producer responsibility in the state. The program requires manufacturers to fund the net cost of recycling their products. So the state calculates, here's how much the scrap value you get for a bale of this material, here's the cost of recycling it, and the manufacturers are supposed to make up the difference. It's not EPR, but it is producer responsibility.

Mr. Lapis, are you concluding your remarks?

I am. I'm sorry.

I see you have many pages there, so I just wanted to make sure.

I will not--I will run through this really--I'll finish this point and then add just one point.

Thank you.

You know, I was gonna say that there's also a benefit to a state-run program in terms of when you look at something like fraud and being able to use actual law enforcement agencies in the Attorney General's Office and CDFA checkpoints that you can't do in a privately run program.

I'm going to skip all the flaws of the Bottle Bill, which I promise there was, there was a huge section on that, and just use one example to point out that it's not an either/or, and that's the battery policies from a couple years ago. We partnered with the California Park Stewardship Council and Rethink Waste to address battery waste for the reasons that were mentioned earlier, environmental health and safety, etcetera.

We worked on that policy for several years and the final policy that got implemented was actually split into two bills. The loose batteries were added to what would be a producer-run system, an EPR system, although I'm kind of using that in quotes, and the batteries that are embedded in products were added to the state E-Waste Program, which is a state-run system. Frankly, it came down to both sets of manufacturers coming to the table and engaging and us finding a workable solution and things making sense in that way.

When you have a battery inside a big electronic, it doesn't make sense for it to go into a little battery drop-off bin, and you can put those bins everywhere, but you can't necessarily do an e-waste collection everywhere.

And I'll just add that we also added a command and control element as well, requiring all chain retailers to have take-back for the batteries that they sell if they have five or more locations. So these policies are not mutually exclusive and at best they work together. Thank you.

Thank you very much.

Hello. My name is Thomas Helme. I'm the co-founder of Valley Improvement Projects. We're a small grassroots environmental justice organization in the Northern San Joaquin Valley, specifically Stanislaus County.

I'm also the the part-time coordinator for California Environmental Justice Coalition, which is made up of over 80 smaller community-based grassroots environmental justice groups and allies from across the state. And sorry, I'm getting over being hoarse. This is--I sounded much worse a few days ago, I promise, but I'll try to save as much of my voice as I can.

I'll give the same disclaimer that I gave when I was asked to be a part of this panel, which is that I'm not an expert on EPR. I'm an expert on the environmental justice issues that affect my community in the Northern San Joaquin Valley, and I think over the last decade, I've become an expert on the environmental justice issues around the State of California, and especially the ones that the groups that I work with have been working on.

I am part of the SB 54 Advisory Board, and to be quite honest, that's pretty much where I started learning a lot about EPR, the various programs that already exist. I learned that I had interacted with some of them in the past, but just didn't really remember the term.

I know that as a community that had the last trash incinerator in the State of California there in West Stanislaus County, we, for years, were working on what we would call 'starving the beasts,' which was keeping waste out of the incinerator, so figuring out other things to do with that waste, and it was not brought to our attention by a government agency, definitely not an industry, but other nonprofit groups that reached out to us and said, you know, there are programs in the State of California that are supposed to be diverting particular items of waste, like carpet, for example.

Did you know that there's a program that can recycle carpet? I talked to the waste haulers in our community and turned out about half of the carpet in the county that was, you know, being taken out of homes was being burned at the local incinerator and the other half, roughly half, was, was being put in the local landfill.

And I learned then that there was a state program where folks could actually take that carpet to be recycled. There was just one big problem. There wasn't one in Stanislaus County. At the time, I think there was only like, like eight counties or maybe a few more that didn't have a carpet recycling drop off place nearby. The closest one in Stanislaus County was at least an hour, hour and a half away, like in Sonora, and I forget where the other one was at the time, maybe in San Joaquin County.

So that was my kind of introduction to these programs. Like I said, what I have to say about them is it would have been nice to be reached out to as a small environmental justice group by government agencies that were running these programs to find out about them sooner so that we can make other folks aware.

And after, I don't know, several months, including writing letters to CalRecycle, meeting with various places in the county that could act as a drop-off location, we were eventually able to get a drop-off location to recycle carpet in Stanislaus County and hopefully kept a lot of that carpet from going into the landfill or being burned at the local incinerator.

I will say in general about programs that put the--well to be nicer, I guess, industry; I think in an EJ meeting we would just say the polluter--making the polluter pay is definitely programs that we like to see. The big issue that we've seen a lot is when the polluter or the industry is put in charge of these programs. That's like the number one red flag for environmental justice organizations because we're talking about a long legacy of being mistreated by industry, by those creating the pollution in our communities.

And the trust level is about as low as it can be when talking about the trust that environmental justice organizations and communities have with those that pollute in their communities. So when we see programs where the industry is given a large say over how the program is going to be laid out, about the targets that are going to be met, about the fines that will be implemented if it's not working out, when the polluter is put in charge of those things, or at least given a very large role in that process, we, right off the bat, are going to be very skeptical.

I mean, if it was up to us, which it rarely is, we would say, 'well, who are the communities that are closest? What are the health problems that we've seen in those communities?' Well, we should put together a group of those affected community members and have them decide when these pollutants should be phased out or how much a company should be fined for violating emission standards or things like that. I think that we know that that's usually not how it works.

So unfortunately, the trust with the government agencies is maybe a little slightly higher than the trust that a lot of communities have with the industry itself, and like I said before, that's because of just this long history of seeing government agencies or the government in general work hand in hand with those agencies.

They're usually acting as kind of a buffer to where, you know, when we want somebody to complain to instead of going directly to the polluter, it's usually a government agency, staff, a government program that they would rather have environmental justice groups interface with than organizing directly against a facility or a certain company.

Thank you, Mr. Helme. Trying to keep on schedule here. Would you like to conclude?

Yeah, I think those were the main points that I was trying to make. So I think that in looking at the questions that were going to be posed here on this panel is moving forward, if there's plans to have additional EPR programs, I think there is both an opportunity there to look at other models that don't give so much oversight and authority to the industry themselves and there's a big opportunity to do the kind of outreach to environmental justice communities directly that are directly affected by this pollution and these industries.

Thank you very much.

Thank you.

Great. Thank you, Madam Chair, Senator Allen. Great to be with you today. I'm Dawn Koepke, on behalf of the California Manufacturers and Technology Association. CMTA appreciates the opportunity to be a part of this important discussion and just know we have been deeply engaged with the Legislature and regulatory agencies on the development implementation of many of these programs over many years.

Importantly, I'll be focusing kind of broad picture on EPR today and just would start off by just noting that importantly, CMTA's member companies across all different sectors have established robust sustainability commitments, including very detailed goals and objectives in the sustainability realm that are guiding their work and the products and packaging they put into the market and are responsive to the overarching goals and objectives that California has focused on, whether it be by the Legislature, Administration, and the agencies.

This includes greater producer responsibility in the design, manufacturing, marketing, sale, and end-of-life management of their packaging and products, and their sustainability commitments do ultimately drive their work today across their portfolios, across sectors, and across the globe. However, producer responsibility can take many forms depending on the packaging or product of focus.

I think that was articulated by one of the prior speakers just the breadth of different types of producer responsibility. Obviously for this purpose, today we'll focus on extended producer responsibility, but I think from CMTA and its members' perspective, EPR in particular may not be the right fit for all packaging, all products, and all instances.

On the topic of manufacturer's role in planning for the zero waste circular economy through EPR programs, which is one of the questions that we were asked about, should be noted that, as you can appreciate, circular economies can be very complex.

Manufacturers are the link between consumers and raw materials, and manufacturers really endeavor to ensure a responsible and sustainable market for those materials, for the packaging products, as well as for the consumer. Manufacturers innovate to create value and ultimately to meet consumer needs and preferences.

Product design is important, but consumer behavior and consumption patterns are ultimately more influential drivers of change. Consumers really do have a key role in the circularity and sustainability realm. Manufacturers can't create a zero waste economy without consumer participation. Thus, the responsibility of creating and implementing a circular economy through EPR frameworks must be equally shared by all participants in terms of that engagement, prioritization, what have you.

Also relevant, the hierarchy of waste also plays an important role in determining the highest and best use of how to utilize material, create packaging and reuse, recycle, composting, or disposal of packaging and products.

CMTA and its members would caution the Legislature and the regulatory agencies to be mindful that over-structuring and inhibiting flexibility in the development of EPR programs could threaten product innovation by creating a very high barrier to entry for new types of products, new innovative packaging, what have you, and as was the case with some newer EPR programs, innovation is largely focused on that which eliminates packaging products and such and doesn't necessarily always sufficiently and easily allow for entry into the market for new materials, new packaging, new products amid some of these frameworks that also can compromise the management, recycling, and composting of these materials in various cases.

Ultimately, innovation needs flexibility to survive, and flexibility is important to controlling costs. Setting policy goals and allowing manufacturers to plan and develop solutions is the best course of action from manufacturing community--producer communities' perspective for any EPR program.

In terms of some overarching principles related to EPR, our manufacturers, many are guided by a few key principles that I'd love to outline for you today, and it's based in their experiences globally with EPR programs across the globe that they interact with, as many of our manufacturers are multinational, selling into many markets.

Number one, EPR should be focused on packaging and products that are capable of circularity, rather than on packaging and products that are destined for disposal, whether that be due to health and safety issues, perhaps some hazardous materials, hazardous components.

Further, packaging and products that are required or regulated by other state federal agencies, laws, regulations, should be more explicitly exempted from those. It often is the case that we're seeing cases where there can be duplicative, overlapping, and conflicting regulatory requirements, uncertainty about, you know, which program, which laws, regulations, some of these packaging products have to comply with, and in some cases there are key health and safety considerations, much less other uses and benefits that need to be considered as part of those other programs.

Additionally, packaging and products that have established commodity markets should also be supported and allowed to operate without additional EPR guidelines and restrictions that could hinder the ongoing benefits and growth of those commodity markets and that ultimately results in that circularity. Number two, costs should be based on a needs assessment for whatever the packaging or product of focus.

Number three, costs should be limited to what is additive to recycling operations to achieve circularity where it can be achieved. Additionally, consumer rate bases should be retained for routine and standard services offered by waste and recycling service providers and other governmental functions.

Number four, EPR fees should be based on the net cost of recycling operations, recognizing the value of covered materials, similar to some of the other program considerations, like in the Bottle Bill that was referenced. EPR fees should be transparent and eco-modulated, providing benefits and incentives for use of materials that are more environmentally friendly and/or more easily recycled.

Further, they should be based on both the amount of materials and the type of materials for which the producer is responsible. And finally, number six, optimal EPR programs from a producer manufacturer's perspective are run by a producer responsibility organization managed by producers that has the flexibility that's important to meeting the goals and objectives that led to that EPR framework being established ultimately.

Finally, a newer issue that is arising in terms of questions across all of the different EPR programs here in California is related to end markets, which are clearly a critical component of any successful EPR program.

It should be highlighted--and I believe committee is certainly well aware--that many of our materials across any of the EPR programs we have in place or perhaps may seek to put in place, often those materials are exported for management, recycling, what have you.

That presents some challenges and potentially some concerns as we look ahead for the viability and success of these programs, particularly amid some of the changes at the federal level related to global trade tariffs, what have you, that could impact some of the benefits, outcomes, success of this. Ultimately, how will California's PROs across the programs be expected to respond if tariffs are ultimately imposed on those some of those key markets?

And Ms. Koepke, are you wrapping up, here?

Yes, wrapping up, Absolutely. Senator, Chair. Thank you. So ultimately, given so little infrastructure, it's just really important to keep that in mind that those global markets, those end markets, are really dependent on a number of different factors.

EPR models and frameworks are very complex, and so with that, we just want to be--ensure that we're balancing those considerations and complexities against the importance of manufacturers having a pathway towards compliance, addressing any potential access issues and costs associated with these programs on consumers for everyday goods. And with that, I will leave it there. I really appreciate the opportunity, and certainly happy to speak to any specific programs, if that's of interest. Thank you.

Yes, thank you. Well, thank you to all three of you. I actually do have a couple of questions for Ms. Koepke. So I think if we have a goal of trying to reduce waste and we think about the different ways to do it, we could have specific mandates, a command and control approach which says, these things are banned, and I think there are some benefits to doing it that way.

We just say that this is going to be off the table and we're not going to allow this. But the EPR program is supposed to bring in those who create the products, and one of the things that I was most enthusiastic about with the EPR, especially SB 54, is that it can drive change of the design of products up front.

So I think we've all experienced this before where you're at Costco and you're trying to open this massive packaging when you get it home or you get something in the mail from Amazon and has needless, wasteful amounts of packaging, and we know that that's going to the landfill, and that thing that was purchased really didn't need to be encased in so much. And so my question is, are manufacturers actually changing the design of their products based on the EPR programs?

I mean, because in my mind, if they're not, then the other alternative is to go back to the mandates and the more command and control approach, and so I wanted to know if you have examples of that or if you see that happening where EPR is working to drive a better design of products.

Yeah, I appreciate the question, Madam Chair. Absolutely. Our manufacturers are certainly deep in the weeds across their supply chains, working with their packaging manufacturers, if they don't produce the packaging themselves, to seek ways to reduce the amount of packaging that they're utilizing, putting into the market, what have you, looking at where they may be able to kind of trade out different types of materials, but also, you know, ensuring that, you know, in making those, some of those decisions, that there are markets, there are pathways, if not fully developed yet, that they, you know, are looking ahead to see where investments may need to be made.

You know, working with the PRO under--you mentioned SB 54--specifically to start figuring out how to advance that under that framework. I mean, it is complex. These are difficult, challenging issues, and obviously, SB 54 contains a number of individual requirements beyond just recycling rates and dates, includes source reduction, and so certainly the manufacturers are kind of working to figure out how to balance all of those, comply with all of those to meet those goals and objectives. So we are absolutely seeing that. They're working with their supply chains.

Even just in my own purchasing, I've started to begun to see some of the changes in the market today, whether that be eliminating perhaps a piece of plastic film that wasn't mission critical, perhaps moving towards other types of materials that may have higher recycling rates, what have you.

So we are starting to see that. Obviously, working with supply chains is, you know, it's complicated and it takes time, and certainly, also another big element of that is ensuring that we're working to provide better education and understanding with consumers.

As I mentioned, what the consumers do with that material after they're done using it matters in terms of our ability to work within the system with our waste and recycling service providers and other stakeholders to ensure that it is actually collected in a manner that is capable of moving that on to end markets for recycling and putting back in to products and packaging. So I would say in talking with our manufacturers, we absolutely are seeing progress being made.

Yeah, and I think it's also important to note that there's a complex relationship with consumer preferences because you know, to some degree, if consumers are saying, 'I prefer a styrofoam cup to a paper cup' or 'I prefer a styrofoam cooler to a cooler that's reusable,' you know, saying that there are damaging externalities to the use of styrofoam, which doesn't have an end use and is broken down into to toxic microplastics, and so you're going to need to transition away from that styrofoam cup. To me that seems like a decision that is acceptable to make.

So--and I feel like I hear this come up. There's a default into, well, consumer preferences for this without an effort to provide alternatives for the consumer preference which are just basically just as acceptable.

So, you know, I hope and encourage the manufacturers across a whole range of different industries to be really trying to think of those goals, those sustainability goals, those circularity goals and having that drive the decision making because I really think we need everybody at the table, and I looked back at the original plastic bag ban which resulted in the thicker plastic, which was double the amount of plastic in a plastic bag and this idea that consumer preference was what was driving that.

And what happened was, you know, I understand Covid hit and that really did derail the education component and the focus on bringing a reusable bag, but we so quickly defaulted back into that and I think it was a combination of a lot of factors, but certainly the manufacturers and then the retailers have a very strong role to play in creating a culture of sustainability. And so instead of abdicating responsibility, my hope is that there would be an embrace of that as a shared ethic. Senator Allen, do you want to make any questions or comments?

Yeah, I certainly agree with you. Customer preference is oftentimes pushed or determined, pushed and pulled by the folks that are selling the product, often aggressively at great expense through advertising and all the rest.

You know, I mean, I, you know, couldn't help but just reflect on the very different messages that we're receiving here from the panel, which is, of course, on purpose. You know, Dawn, you're mentioning the need for flexibility. Of course, I think we all are here because we recognize the need for oversight and accountability in this space.

And it's part of, you know, EPR, as has been just criticized by Thomas for putting, you know, the producers in the driver's seat for figuring out how to comply with certain mandates, you know, if that's not the right approach, do we go to community regulation? I mean, what's--that was just proposed--I mean, does that, where do you, where does that put us?

If you're not feeling as though the system is flexible enough, given these massive infrastructural challenges that we're, that we're facing, I mean, I presume it's not a command and control system that, you know, that many people want that, quite frankly, we've been attacked for because EPR wasn't strong enough, you know, from that perspective.

So how should we be thinking about the regulation system if this is not providing enough flexibility when, I mean, from our perspective, it's putting your members at the heart of the decision-making process, granted, with strict rates and dates for compliance that we all negotiated.

But the whole idea here is that we're empowering your members who know their products best, who know their consumers best, who know their markets best, to take the steps necessary to address these broader environmental and public health and environmental justice challenges that we have been facing with this massive infusion of plastics, at least within the case of SB 54, other products with other bills.

Through the Chair, if I may respond? Thank you, Senator. So, you know, certainly we've worked very closely together for many years on SB 54, ongoing implementation, you know, just using that as kind of an example, and to be clear, CMTA and its members are not opposed to EPR, EPR frameworks.

We, you know, are on board with producer responsibility. I think when it comes to SB 54, you know, certainly, you know, want to see that framework work. We sat at the table with you and a number of our colleagues in the NGO community, waste and recycling service providers, local governments, to work to get to a workable deal.

We always said it was going to be a very challenging, you know, agreement and a number of very challenging goals and objectives to meet. That's not changed, but we are still committed to working towards implementation and getting there.

I think in terms of some of the flexibility issues, as you'll recall, we spent painstakingly amount of time, you know, working through the details of that legislation so much so that it became a bit of a joke during our meetings that I, at every meeting, had to put a pin in the fact that we wanted to ensure as much detail and specificity within the statute so as to be clear what we were, you know, all agreeing to and to frankly limit any, you know, changes that could hinder the flexibility that was intended, you know, place, you know, different interpretations as part of a regulatory process.

And I think that's where, at least on that particular framework, there are some concerns with kind of where the regulations are, at least currently, but that isn't to say that we're walking away from the deal, that we're not ready to continue to be a part of making that workable.

But indeed, it is going to be challenging and our producers do have their work cut out for them, to be sure, but they absolutely are digging in. They are having kind of conversations not only with the PRO, but with their supply chains.

A number of them are even working with their waste and recycling service providers to understand their processes, you know, collection sortation, so that they can figure out kind of where, you know, best to kind of engage to help ensure that their materials is not only being collected and collected, you know, through correct and appropriate workable streams, but how to move that material forward onto responsible end markets to help build those markets, what have you.

So, you know, just really want to assure you we're not walking away from that by any means, but it is going to be challenging to meet some of these goals and objectives laid out there, and we always knew it would be.

Okay. Thank you. And I just have one last question for Mr. Lapis. So what do you think is the biggest unresolved question about EPR programs? In your mind, what does or doesn't work?

Wow, that is a really big question, and I'm not sure I have an answer other than to go back to my earlier point of we need to use all the tools in toolbox. And so going back to the SB 54 example, even though I wasn't planning to talk about SB 54, SB 54 creates a producer-run EPR program.

It also has a component--that was part of the negotiations at the very end in exchange for withdrawing the ballot measure--it also has a very explicit command and control component that says that if the manufacturers do not hit the targets in the bill, CalRecycle will begin adopting direct regulations and going the command and control route.

And I think it's that, that combination of the two that is probably the sweet spot. You know, your example of the extra packaging at Costco, you know, SB 54 has source reduction targets, right? And hopefully that should be the lowest hanging fruit for source reduction. But the source reduction targets are industry wide.

They're not necessarily on any one individual manufacturer, although they might be incorporated into the eco-modulation or whatever, so there's a chance that they--that doesn't get rid of that packaging. If the 2027 source reduction target is not met, CalRecycle then has the authority to adopt explicit regulations about right-sizing packaging and the rubber will hit the road on whether or not they do what they are authorized to do.

Okay. Well, thank you very much to the three of you and we'll invite up our next panel which is--unfortunately, Rachel Wagoner from Circular Action Alliance is no longer able to make it. We have Anja Brandon from Ocean Conservancy and Christine Wolfe from Waste Management. So thank you to both of you for coming today. This is called, How Can Good Goals Set an EPR up for Success?

Chair Blake Spear, Senator Allen, thank you for the opportunity to join you both today. My name is Dr. Anya Brandon. I'm the Director of Plastics Policy at Ocean Conservancy.

I earned my PhD from Stanford in Environmental Engineering studying plastic waste management and I now lead Ocean Conservancy State, federal and International Policy End Plastic Pollution we are proud to have been one of the environmental organizations that helped lead the 2022 statewide ballot initiative to reduce plastic packaging and waste, and also to have helped play, negotiate, craft, pass, and now implement SB 54, which was enacted by this Legislature and Governor Newsom as a negotiated alternative to that ballot measure, SB 54.

Here is a valuable case study to understand the need for goal setting, including key details in the statute for any EPR law. Prior to SB54, there were a myriad of efforts to tackle specific plastic products or materials that contribute to pollution and the waste management crisis, like banning certain problematic or unnecessary plastics.

And after years of these efforts and a strong ballot measure qualified to go before California donors who consistently name plastic pollution a major problem, stakeholders were willing to consider a systemic approach.

The ballot measure would have given CalRecycle broad authority to implement and enforce reduction and known fees, whereas SB54 pursued a different approach, establishing an EPR program to hold producers accountable for making less packaging less wasteful packaging and products by internalizing those costs.

While the promise of EPR is alluring, we know from past EPR programs that simply shifting costs of waste management to producers is insufficient to achieve our desired goals. So for us to support this approach, there are certain key features necessary in statute for EPR to ensure that it delivers on those environmental outcomes.

It is critical that elected lawmakers are very clear about both what the EPR program must accomplish and how the EPR program should operate. This means that legislation should set specific, measurable targets. For SB54, that meant source reduction, reuse rates, recycling rates for plastics, and redesign.

This allows elected officials to set the North Star for the program and for the future of waste management for the state. It also gives producers the producer responsibility, organization and other regulated parties a sense of what is expected, providing clarity and certainty to make long term investments.

But good EPR legislating must go beyond target setting to include other guardrails. For example, no EPR system should rely on harmful chemical recycling technologies that threaten environmental and community health. To that end, SB54 relied on existing California statutory definitions to protect against the use of these technologies to meet SB54.

This was discussed by SB54 negotiators and documented in the legislative Analysis and the author's own letter to the Journal. It also is critical in such complicated laws to include transparency and public reporting requirements to build trust in daylight.

It is also essential to build in strong oversight and enforcement, such as the authority for CalRecycle to revoke approval of the PRO if it's out of compliance and mandate additional requirements.

The success of this program is only as strong as the state's ability to enforce it, and setting clear targets and guardrails empowers the state agency and the Legislature to hold producers and the PRO accountable. There are other guardrails that, in retrospect, we wish we had included in SB 54, including prohibiting lobbying by the Producer Responsibility Organization.

It is critical to include specific and detailed targets and guardrails in the statute of EPR to ensure programs deliver on their desired outcomes and earn the buy in of a diverse set of stakeholders. There are multiple ways to include adaptive management into an EPR program without compromising on clear target setting.

For example, recycling rates by specific dates should be set in statute, but EPR statutes can permit the PRO to set and achieve interim targets through the development of their plan.

Alternatively, you could allow release valves by giving the state agency discretionary authority to adjust the rates or the timeline to meet those rates while setting criteria for the agency to follow when exercising that discretion. But it's critical that legislators not turn over goal setting to producers or the pro.

Because producers have to pay for the updates to the system to meet these goals, they have a direct financial incentive to be unambitious in their goals.

EPR can and should be prescriptive and flexible at the same time, and it is the job of the state, the state agency, and this Legislature to determine the vision for the state's future and ensure producers carry out that vision. Thank you.

Good afternoon. Thank you, Chair Blakesburg, Senator Allen, for hosting this. I'm Christine Wolf. I'm the Director of Government affairs for wm, formerly known as Waste Management. We're a comprehensive environmental services provider working across California to provide collection, recovery and disposal for recyclables, food waste refuse and hazardous waste.

We're the solutions provider to whichever entity is responsible for end of life management of materials, be it local governments, individual companies or stewardship organizations.

Service providers like WM and our local government partners have invested hundreds of millions of dollars in developing a highly regulated, interdependent ecosystem of waste and recycling infrastructure in California to support the state's rigorous environmental protection goals and labor standards.

Luckily, we have a good foundation to build upon as we make the Incremental changes we need to meet the goals we set.

Even with the overlay of epr, local governments have the responsibility for managing their own waste and recycling and designing systems that work for their local context, while ensuring that there's equity across the state in the services residents and workers have access to.

Local governments contract with companies like WM through long term franchise agreements that provide local governments compliance assurance and provide us the certainty and scale we need to design infrastructure that will last and that can be improved over time as the waste stream changes. This is a system California has built through traditional regulatory design.

One where all Californians, not just some, have access to waste recycling and composting service. But there's a limit to what local governments are willing to pay for. Because we're the boots on the ground implementing these laws. Having clear, stable, enforceable goals is critical to ensure we can design programs that work.

We always start by asking what are we really trying to accomplish with these policies? Is it increasing access and convenience for residents? Is it reducing illegal dumping? Is it avoiding fires that destroy our trucks and our facilities? Is it reducing the use of virgin materials and driving the demand for recycled content?

We need long term clarity on goals to make investments and accurately communicate costs to the entity that will be responsible for either paying us up front or reimbursing us for our investments in people, equipment and infrastructure. And we can't be left holding the bag if the laws governing waste and recycling in California aren't upheld and enforced.

I mentioned earlier changes in the waste stream because it happens often for reasons outside of our or local government's control. Product design, consumer choice, and other environmental design principles drive producers to shift the materials they produce into the market. We talked about that already for years. We've adapted to this change.

For example, I just saw a photo of a factory in China designed at the turn of the century solely to process recycled newspaper, which was one of our largest commodities that no longer exists. And then in 2018, China stopped importing recyclables altogether from the West.

Another example is a significant increase in lithium ion batteries being introduced into commerce that we have to manage in every waste stream that we receive. These jolts to the system and the lack of stable end markets for the materials we collect and sort can and have had ripple effects across the entire system.

Increasing garbage rates, decreasing recycling, and increasing illegal disposal of hazardous material. That's why we need producer commitments to using recycled content and helping manage hazardous waste that's introduced into California. So as we think about setting goals and metrics, we need to do it with stability and scale in mind.

None of us want sudden shifts or interruptions to disrupt meeting our targets. Flexibility is critical so that we stay on track to meet those targets. But companies like WM need to know what our long term objective is to make the kinds of investments that are needed to support the compliance obligations of local governments and now the manufacturers.

Thank you.

Thank you very much. I have a question for Ms. Brandon. So what do you think about the timing of a needs assessment? Do you think that that needs to be done first or do you feel like that that's not as critical then, or what's your thoughts on that?

Chair Blakesburg that's a great question. EPR is inherently iterative. The needs assessment and the development of a producer responsibility plan talk to each other. So really they're happening simultaneously. And we need the needs assessment to better understand what is happening at the state.

And we need the producer responsibility plan developed to know what we should be focusing on. What materials are the producers going to invest in actually ensuring they meet those recycling rates and what materials they are simply going to source, reduce and eliminate from the system. So these two things talk to each other.

It is also not one and done. A pro plan often takes multiple rounds of going through the advisory board and through the state agency to get completed. We just saw this in my home State of Oregon. It took three drafts and that is part of EPR and part of what is built into those timelines.

And the same with a needs assessment. It's not one and done. We do another needs assessment in five years and every five years after that as we continue to learn more and more about the state and our needs change.

And are there clear differences with the Oregon EPR program in California so that you might want to highlight a couple things?

Yeah, absolutely. I would say the biggest difference is the source reduction requirement that California outlined in SB 54. That was a clear must have for those of us who are working on the ballot measure. In addition to that difference, the targets and the specific rates are just more prescriptive and detailed in California on purpose.

Again because of the negotiation and the compromises that we agreed to to withdraw that ballot measure. For example, the recycling rates for plastic 65% by 2032. California requires that by type of plastic so that no one plastic material can hide behind another.

That level of specificity and detail is going to allow the California system increased transparency information and also requires a lot more work and investment to make sure that the worst of the worst materials don't get to ride the coattails anymore of the other materials in the system that actually have value.

Okay, great. Well, thank you very much to both of you. I appreciate your time. Next we have panel number three, which is what does it look like when an EPR works well or not so well?

We have Mark Dubai, the Deputy Director of the Division of Waste Permitting, Compliance and mitigation at CalRecycle, Rachel Michelin from California Retailers Association, and Heidi Sanborn from National Stewardship Action Council. So thank you for coming forward. And when you're ready to get started, Mark, you can go ahead.

Great. Madam Chair and Senator Allen, thank you for inviting me to be part of this panel today. I'm Mark Debee, the Deputy Director of Calvary Cycle's Waste Permitting Compliance Mitigation Division, which oversees compliance aspects of extended producer responsibility EPR programs As with many of CalRecycle's programs, we approach enforcement with an emphasis on maintaining compliance with program requirements.

This approach starts with ensuring that regulated entities in the programs are made fully aware of their respective roles and responsibilities. We focus on providing education and guidance in an effort to provide clarity regarding those requirements and expectations.

Having clear goals, objectives, and program requirements included in statute and regulations is an asset in being able to provide clear metrics and expectations for the entities to better understand what compliance will be when evaluated. EPR programs have different roles and responsibilities for different entities involved with the program. There are the stewardship organizations and the producer responsibility organization.

There's individual producers, there's distributors, wholesalers, and for some programs, retailers have a role. CalRecycle's initial and primary focus is to ensure that LEED program organizations provide CalRecycle with their compliant plans and budgets consistent with statutory requirements. Through reviews of annual reports and budgets as well as field observations, CalRecycle can track the progress of plan implementation.

When it becomes evident that the organizations are failing to implement their plans, actions can be taken to address inconsistencies and bring the organizations into alignment with their plans. Several of the EPR programs rely on other entities, such as retailers, to ensure the program remains sustainable.

These entities may be required to collect fees or remit them to the appropriate organization and or keep sales records or to send notices to calacycle when they find covered products being sold that are not part of the EPR program.

CalRecycle can act on the provided information to investigate producers that are not part of the program and take steps to bring them into compliance. When CalRecycle finds compliance issues, either through reviews of annual reports, investigations, field inspections, audits, or notices from retailers, the first step is to notice the the subject entity regarding the compliance issues.

A notice of violation is sent indicating the compliance issue and a date by which the entity should return to compliance. In some programs, a second notice might be necessary. Some EPR programs allow entities to enter into a corrective action plan with calacycle to allow time to make changes that will result in full compliance.

If notices and corrective action plans fail to establish compliance, CalRecycle will follow the administrative penalty processes outlined in Statutes. In these processes, an accusation is sent to the non compliant entity with a full description of the issues and with supporting documentation of investigations, inspections and other evidence.

The accusations will include directions on steps required to come into compliance and notice of penalty exposure as part of the administrative process.

Accusations can be appealed by an entity and it has been Cal Recycle's experience that many entities request to enter into settlement discussions as part of the appeal process to which CalRecycle has been and continues to be open.

In recognition of how settlements can be very effective in gaining timely compliance, CoverCycle has established for some of the programs a streamlined penalty process as an intermediate step between a notice of a violation and issuance of an accusation.

In this streamlined process, an entity is required to agree that they are non compliant and to terms that will bring them immediately into compliance in exchange for reduced penalty. If the entity defaults on the streamlined settlement agreement, an accusation for a full penalty exposure will be issued.

It is CalRecycle's experience that a proactive, initial and ongoing compliance first approach has been and continues to be effective in limiting the number of non compliant entities and has allowed resources to be well positioned to quickly address non compliant situations when they occur.

Thank you for your interest in NPR enforcement and CalRecycle's efforts to ensure all entities can and do comply with all requirements for the proper management of products and for the protection of public health, safety and the environment.

Honorable Chair Blakespear, Senator Allen, thank you for the opportunity to testify this afternoon. My name is Rachel Michelin. I'm the President and CEO of the California Retailers Association.

CRA represents a diverse membership encompassing all segments of the retail industry, including General merchandise, Department stores, online markets, grocery stores, retail pharmacies and specialty retailers such as Auto Vision, jewelry, hardware and home stores.

California retailers have closely observed and some have actively participated in the implementation of EPR programs across the United States and globally, gaining valuable insights into their effectiveness and challenges.

EPR has emerged as a crucial policy tool for managing consumer waste from products and packaging and California has been at the forefront of this movement recently becoming the first state to adopt an EPR program for textiles through the Responsible Textile Recovery Act of 2024.

This groundbreaking legislation, along with other EPR initiatives, demonstrates California's commitment to reducing landfill waste, promoting recycling and reuse, and encouraging innovation in product design and disposal. And retailers across California are deeply committed to environmental sustainability.

Many have already implemented ambitious sustainability goals such as reducing greenhouse gas emissions or reducing or finally are committing to multi year plastic reduction plans. However, EPR programs do face several hurdles. One is the complexity of implementation. The creation of producer responsibility organizations and the development of effective collection and recycling systems requires significant coordination and resources.

The Equitable Fee Structures Determining the fair and effective fee structures, whether a flat fee or eco modulated fees, is crucial for incentivizing sustainable practices. Consumer education, Ensuring public awareness and participation in EPR programs is essential for the success and harmonization across jurisdictions.

More and more states are adopting EPR policies and aligning the requirements and standards becomes increasingly important to avoid fragmentation and inefficiencies. And retailers, as you heard, play a crucial role in supporting the evaluation of EPR programs. You know, an example is the supply chain verification.

Retailers must ensure that the producers of the products they sell are registered with an approved producer responsibility organization and are following the EPR requirements.

We are the primary point of contact with consumers and retailers are essential in implementing and communicating to consumers any product, take back or recycling initiatives that may be part of an EPR program or a Cal Recycle program.

And retailers are required to keep records and provide data to pros or Cal Recycle to evaluate the effectiveness of EPR programs and other programs and track progress towards recycling and waste reduction goals. While retailers want to be as collaborative as possible, there are requirements that are impractical and challenging to comply with. I'll just share two examples.

One are stringent performant targets without sufficient data. Some EPR programs have established ambitious recycling rate targets Without a comprehensive needs assessment, which can be impractical for retailers and producers to meet, or they have complex reporting and record keeping.

The extensive reporting and record keeping requirements imposed on producers and pros may be burdensome for retailers and especially especially our small businesses.

But to make EPR programs work in California, we suggest to the Members of the Legislature and the Administration to consider the following when you look at the needs assessment Conducting a thorough needs assessment before implementing EPR legislation. This has been recognized globally as a valuable first step, allowing for realistic and achievable goals.

Phased Implementation the gradual implementation of EPR programs where different aspects take effect over several years gives retailers time to adapt their processes and systems. Clear definitions well defined definitions for certain materials and products help retailers easily identify which items fall under EPR requirements.

Streamlining Compliance Efforts California retailers stand ready to contribute our expertise, resources and commitment to environmental stewardship in partnership with policymakers to create effective, innovative EPR solutions that benefit our communities, economy and planet. The Members of CRA are committed to environmental sustainability and are eager to collaborate with the state Legislature and Governor on effective programs.

However, we must emphasize the critical importance of inclusive public policy processes. To truly succeed in our environmental goals, we need to bring together subject matter experts from all aspects of the environmental spectrum, with particular focus on including retail expertise as we are the consumer facing industry.

For EPR to achieve its full potential, we must work together policymakers, regulators, environmentalists, and industry leaders alike. By fostering a collaborative approach, we can develop EPR programs that are not only environmentally impactful but also successfully implementable.

Our Members stand ready to contribute their valuable insights and expertise to this crucial dialogue, but seize this opportunity to create a more inclusive, effective, and sustainable future for California. Together, we can craft EPR policies that serve as a model for the nation, balancing environmental stewardship with economic vitality. Thank you for your time. I welcome your questions.

Thank you, Madam Chair and Senator Allen. After 35 years of working in this field as a consultant, a regulator, and an advocate, having started the California Product Stewardship Council and the National Stewardship Action Council and focusing almost exclusively On EPR since 2003, I am honored to be here having a thoughtful conversation about these programs.

In the early EPR programs we learned a lot of lessons and some of these programs are now working well, but some needed to be fixed and had some significant trouble. And I've worked personally on five, actually six cleanup bills I had to go back and count.

Took me a while this morning and yesterday on how much work we've done over the years. The advancement of EPR was due to a lot of hard work by a lot of people over many years and it continues. There is no silver bullet.

As was mentioned earlier, CalRecycle has learned a lot in 15 years and they developed the EPR Legislation Checklist which incorporates the lessons learned to ensure that bills are workable and enforceable. It's a great tool for all of us to follow. The proper role of government in EPR is really only four things.

It is to ensure transparency, set performance and environmental standards, have timely enforcement, and ensure a fair and level playing field for all the covered product businesses. We've learned a lot of lessons. I'm only going to focus on a few of them now, but one of them is the internalization of costs instead of visible fees.

And I could go into that in great detail. Some of it was mentioned earlier about recycling fees being used to sue the state.

Requiring free collection and or disposal is very important because if we charge people at end of life, they are going to illegally dispose of that product, whether it's in a trash can or over in a ditch. And we won't get the material collected, requiring fair compensation for parties.

Collecting the products on behalf of the program is also very important. We learned this when we compared the mattress and the carpet programs. The Conservation Corps are collecting mattresses at all 14 of their locations and and only one for carpet because they don't get paid to do it for carpet.

But we did fix that with AB863 last year. Thoughtful stakeholder meetings with all key stakeholders. I was part of the SB54 meetings. We had over 100 in eight months. There was a lot of thought that went into that Bill and pretty much every word was discussed at length.

And that hopefully leads to this being implementable and that everybody's bought into it. I mean, that's the goal and that's why retailers and everybody needs to be at the table. The need for specific reduction, reuse, repair and recycle content goals is very important.

We did not see any carpet to carpet recycling happening until we passed and it won't happen still. But AB863 fixed that last year. That is the third cleanup Bill of that program. Which does get to the point how important it is to get the bills right the first time. Based on what we've learned from the previous bills.

The data is not just collected, but it's utilized to improve the program. Public education is a great example of that. And we just heard from Thomas one of the problems if the public doesn't know about the program, they're not going to be able to use it and we don't do a very good job of measuring pr.

And I have a whole long conversation we could have about that but don't have time. So enforcement tools are also important to be clear and will be used in a timely manner by the oversight agency.

We've had it happen before where it wasn't timely enforcement and that's a problem for the producers actually because it's not a fair playing field. And I thankfully agree with multiple speakers that a well designed eco modulated fee is very important for getting green design effective to work. So problems still exist though and governance and transparency.

For example, care is a 501 that's in the checklist, but it does lack transparency. The CARE board has a stewardship planning Committee which makes the decisions and is independent from care. SPC meetings are not public and the decisions are being made that do not align with the carpet law.

An example of that is that in AB 2398 from 2010 it reads that the purpose of this chapter is to increase the amount of post consumer carpet that is diverted from landfills and recycled into secondary products or otherwise managed consistent with the state's hierarchy.

The problem with that is that we discovered last year that the producers of carpet had added a third polymer to the backing of carpet without any notification to the recyclers or to even care. Adding a third polymer to the backing without notice made it basically unrecyclable to the existing infrastructure.

This should not be happening 14 years into a program if eco modulation and enforcement is working. So that's just something for us to talk about. On the enforcement side, the oversight agency needs the authority to manage EPR programs through the legislation, the regulation and the plan.

As long as the plan is being enforced and they're willing to use it. Example CalRecycle approves a plan. However, the PRO does not follow the plan and CalRecycle should be able to refer the noncompliance to to the enforcement staff.

But we're seeing only enforcement of some of the metrics that are in the law, but not necessarily what's in the plan. As an example, again with carpet, the PRO plan calls for the fee subsidy justification model to be run twice a year.

The model was either not run or the results were not disclosed since the fourth quarter of 2022. And that's a big problem for the recyclers and others whose fees are actually determined by that study. Enforcement needs generally or that we need clear goals and metrics. Totally agree with Dr. Brandon on everything she said meaningful finding authority.

We've raised the fines on some of these programs. They were as Low as $1,000 a day. Now their standard is 50, up to $50,000 a day because it has to matter. It has to be able to change behavior and then remove control of the program if it doesn't work.

We don't want to be in an endless cycle of non compliance. That means that Californians are not getting the program they were promised.

And just if you'll indulge me, a big picture observation is that the order of legislation matters and what has worked is when we did SB343, the truth in labeling law, and what's recyclable and what's compostable, AB 1201, before we did SB54, the public has to know what's recyclable to put it in the recycling Bin and have clean, non contaminated material.

But we haven't been doing that big picture thinking overall. For example, I tried to pass HHW EPR back in 2010 with Assemblymember Chesbrough. Nobody was ready for it. But what do we do? First organics, then packaging, and now we're trying to take up hhw. So what's that done? HHW doesn't have a home.

It's ending up in the organics, it's ending up in the recycling and the packaging. And the organics are contaminated with plastics because we didn't do packaging first.

So I guess in the big picture, I would like to see the state think more broadly about the order in which these programs come because it will make it actually more cost effective to run the programs at the end.

So in summary, we do know how to draft good EPR bills if we look at what we've done in the past and what's worked and what hasn't, but it is really hard to pass them. And the waste hierarchy became law in 1989 requiring source reduction first. But that requires source reduction goals in the legislation.

And the only Bill that's ever done that is SB54. Instead, we spend most of our time and money mopping instead of turning off the spigot. And that's at great expense to Californians. A circular economy starts by reducing waste and pollution at the source, which requires setting source reduction goals and clear metrics.

Thank you and I'm happy to take any questions.

Well, thank you. Thank you to all three of you. I recently had a meeting with some academics who were reporting on their study of SB 1383. Type of programs in different states. So the management of organics.

And one of the key takeaways was that the programs that in different states that are effective are the ones that have effective enforcement. So this idea of you get what you inspect, not what you expect. Right. So you really have to have some enforcement. And so, you know, I wanted to ask a couple questions about that.

So with CalRecycle having a compliance first approach to enforcement, I understand you were describing that as being successful, essentially. But I wonder about. About persistent non compliance, about the idea that it could just be, you know, the cost of doing business, $1,000 fine and that there is not.

And then there isn't a change to upstream that would create a change downstream. Because sometimes these things, they do take some commitment and money. And so I just wonder if is your perspective that there doesn't need to be additional compliance with more teeth, with more fines, with more.

Or is it that everything is great the way it is right now?

It's not great the way it is now. We could always make improvements. I don't know if increasing penalties is a way to go in some of these programs because you're dealing with very large entities with very deep pockets. And so the amount of penalties that we could pursue might not get their attention.

In some cases it would be immediate, just a threat of penalties. But it does vary in terms of the entity you're dealing with relative to chronic non compliance. I think one thing that we could look at is how we collect the information that we need to pursue enforcement.

Some of our findings are based on needing to have an annual report submitted, and that is three or four months after the end of the year before we get that, to evaluate what the performance was during that year and then investigate those issues and move forward. So that's a lag of time.

We could be more productive if we were getting information on a regular basis and being able to act on that and catch things when they're starting and not waiting until the end when it's maybe out of control, if you will.

Okay, thank you. And I wonder, Ms. Mishlin, how does enforcement affect retailers as opposed to manufacturers or importers?

I mean, from your experience on this particular Bill or on everything on epr. On epr, you know, I think that we're in a little bit of a different bucket because we are consumer facing. So while we have regulations from CalRecycle, we also have to deal with regulations from Cal, OSHA and from other regulatory bodies.

And so it's almost having to look at which is going to be they don't harmonize. And I think that's one of the biggest frustrations is that I get a lot of calls from my Members who am I looking at, like, what regulation am I supposed to be following?

And I think that's one of the challenges that we have, is that, you know, you talk about some of the things about, you know, collecting at 1.0 collecting bags at the stores.

Well, under Cal OSHA regulations, we can't have our employees going in and looking into the bags so into the bins, whether or not it's full of recycled bags or not. And so I think one of the things we would like to see, too, is some more harmonization among the different regulatory bodies.

I think that would be very helpful in helping us to be able to better participate, because a lot of it is not knowing.

The other thing is when you talk about some of the other examples about the consumer education piece, that's really important because when consumers come in and they suddenly can't do something because they can no longer have a bag or whatever it is, they're taking it out a lot of times in our employees.

And so to be able to have a consumer education piece ahead of time where we can prepare consumers of what's happening and what's going on is really important because our number one priority is the safety of our employees.

And I think sometimes that gets forgotten when these programs happen because we're the ones on the front lines that have to do the educating. And that's really tough in certain parts of the state in particular.

So, you know, in terms of the enforcement, it really is, I think, to your point, it's where are we going to get hit the most candidly? And that's how they're going to kind of pick, because really, it's. We get bombarded with all kinds of different regulations from so many different regulatory bodies.

And I think your point is right, Heidi. One of the biggest challenges is that in California, I think we need a broader strategy to all of these programs. I mean, we really need to have how do we do this all together? And I think you've got some really great folks that want to be part of this conversation.

And I know that the retailers do. Absolutely. Because it's not just about CalRecycle for us. It's about Department of Public Health. It's about Cal Osha. It's about all of these different actors that also play into these different regulatory environments. That's not being considered.

And so even as we talk about, you know, SB54 regulations, I'm looking at going well, great. No one's talking about Department of Public Health regulations because that's going to come down the pipeline. No one's talking about Cal OSHA regulations because that's coming down the pipeline.

Because I don't think people necessarily are thinking about it, but I have to, because we deal with all of that because that's what we do in our industry. So I think you're spot on, on a comprehensive, you know, strategic alliance of bringing people in and really looking at these programs.

That is something that's not being done anywhere in the country, which really puts us as a national leader when it comes to these EPR programs that I think other states could model because I think they're going to follow into the same trap. I think California could at some point because it really is a.

It's going to become a regulatory, you know, rat's nest once we start trying to implement.

Yeah, I mean, there are many examples of, across a whole range of public policy areas where the left and right hand don't seem to be talking to each other. And I think, you know, we deal with that a lot. And I hear the truth of that and think we could definitely do better.

I mean, I'll also say, though, that there is, you know, the plastic bag. The whole scheme around the plastic bags was retailers could sell the plastic bags.

Zero, yeah. zero, no, no. I was talking. Not this current. No, no, you're not yours. This is in the past. Yeah.

Excuse me. I just need to finish what I was saying. So the idea was that the grocery stores would be able to sell them and use that for which is a new revenue stream, but use that for education purposes.

So, you know, when we talk about education generally, I mean, I really think the retailers are the ones who are on the front lines of doing the education, of having the signage of training their employees.

You know, it's not going to be the government or the waste hauler that's probably going to come in and do that kind of education. It really would be whoever it is that's dealing with that exact product at that time.

And so, you know, recognizing the effort to do that, but then seeing that not go the way it was supposed to with the plastic bags, I think is also instructive. It's like, you know, we all.

And there's criticism of the retailers in the plastic bag area that they weren't in good faith actually doing any education or any training. And so.

And there's been, there have been efforts, you know, legislatively to fix that, but which you know, didn't get signed by the Governor, but it's still, it's just a recognition of like, we all have our role to play and we have to do it in good faith.

And so if there is an effort to say we're going to do education, we're going to allow a revenue stream to pay for education, then that has to take place. And that of course, you know, builds confidence in all the other players and all the other sectors where we have to have this happen.

Because when we're looking at ways to be successful in doing something like education. And I think of this too with organics recycling and also with recycling in General, all the different types of recycling and which bin to put it in and does it matter anyway? And who's responsible for communicating the education piece?

You know, it's clearly a big issue and it's a conundrum and I hope that we're able to deal with it. But I do, I really do think we all need to look back on ourselves and say, are we doing our own piece? Because otherwise there's just the finger pointing of everybody else isn't doing their job.

But I also wanted to ask Ms. Sanborn about your perspective on the enforcement, what you think could be, could go better with enforcement, what you've seen from your many years of EPR programs.

Thank you. On public education specifically, I think it's a very important piece that's been not addressed properly when it comes to enforcement. So we've been getting reports that say, zero, we've got X number of brochures that went out and we have this many hits on our website.

But in Europe and Canada, often what they'll do is they'll do a statistically valid survey and determine that the public generally understands and acknowledges the program for 60% of the population, 70%, they go up to, I've seen 94%. And the longer programs that have been around for 20 years.

But first people, they won't participate if they don't know about it. So we have to make sure they know about it and the right, all the demographics know about it, not just one. And then, you know, if they're using it, why, if they're not, why not? And then use that data to inform product or program change.

And we haven't been doing that. We just collect stats on brochures and stuff. So that to me is one of the most important things that needs to go in the new bills. And it's a very easy thing to do. I mean, companies, when they do, they're going to put out a new product on the market.

They always do surveys and find out what's the, you know, do. I've been in focus groups, you know, tell people. But so that, that would be to me a very important thing for enforcement on that and other enforcement. As I said, plan enforcement.

If we're going to have agency approved plans and there's important pieces in those plans that the producers say they're going to do. If they fail to do them, are we enforcing that? I don't think that's been consistent and I think we need to look at that. Those are the two things I think we have done. Fines.

Carpet industry has been fined several times. But you know, fines aren't a goal. The goal is to get a good program. And it's just, but it's working together and trying to actually achieve the goal of the program.

And at some point, if it's not meeting a goal, we have to call it and say it's not working and take the keys away. And that's why in 54, I think they called it the Heidi clause. Because I was like, it has to stop.

You know, at some point we gotta take the keys away and we gotta try something else, whether the government runs it or another pro.

Senator Allen, do you have any comments or questions? I appreciate all the comments and the work a great deal. Thank you. Okay, great. Well, thank you to the three of you. We really appreciate your time and expertise and we are going to now go to public comment.

So if you would like to make a public comment, please feel free to come forward. You can line up behind the microphone.

Good afternoon. Thank you. I want to make sure it was working. Chair Blakesbier, Senator Allen, staff of the Senate Environmental Quality Committee. Thank you for the opportunity to talk today. Also to listen in on this important topic. I'm Doug Kobold, the Executive Director for the California Product Stewardship Council.

I'm also the Vice Chair for the SB54 advisory board. But I will make a note that I am not commenting in any way on behalf of the board. We have to make that public disclosure each time we mention it.

CPSE is one of the experts in California on producer or product stewardship and more specifically extended producer responsibility or epr.

As you heard so many times before, CPSE has been involved in almost all of the product stewardship laws that are in place operating today or amendments to ones that were passed prior to the the evolution of CPSC back in 2007. California has 14 product stewardship laws on the books.

We have the Most of any state in the nation, followed by Maine and Vermont. And so we are constantly looked at as how to craft these bills. We've learned a lot, as you've heard.

I would emphasize that of those 14 bills, eight of them are actually extended producer responsibility bills where the producers are actually the ones on the hook to Fund, design and operate the program on their own dime. Now how they pass those costs through is one thing.

The other six are actually what I would term as consumer responsibility because they have a visible fee attached to them. Or in one of those cases it's the beverage container program, which is a deposit return system. But there is still a lot of the deposits actually don't get back to the consumers or actually pay for them.

It's just they get picked up in other ways. So of those consumer responsibility programs, the reason I wanted to point those out in key is it's the governance. This is public money. I have 23 and a half years in the public sector in county government. I had to be very careful about how I spent the public's money.

I think when you have a visible fee, that is really important to know who is actually maintaining that money, who is spending that money appropriately for the programs. And as you heard earlier, the CARPA program may have an issue with how their governance is structured under the, under the program that they are running.

CPSC engages with CalRecycle on a regular basis and encourages it through the legislators that pick up our bills that we sponsor to have technical assistance from CalRecycle.

It's very important to get the department's intake on this for the structure of the Bill because it can be very difficult if the Bill is not structured properly in the legislative process when they go to try and do the regulations.

So we found that it's very important to engage the Calvary Echo folks in a technical assistance role to get that right. Eco modulated fees, you've heard about those already. They are extremely important.

We do need to have those because otherwise what you get is you get the bigger, the bigger fish not changing their ways because the smaller fish are doing it and feeling like they're going to have to. And so it just makes a big difference. These are a couple things we actually targeted in SB707.

CPSC was the proud sponsors of 707 under Senator Newman. And it is. We had over 150 supporting organizations. We had zero opposition at the end of the day. And it was at this 0.1 of the more complete EPR programs that the state has passed to date.

And we have learned from the lessons of the past to try and make sure these things are better.

I'm going to ask you to wrap up your comments. We're trying to keep public comments to about 2 minutes. Absolutely.

Thank you. Okay. And just real quick, right now, CPSC is working with Assemblymember Ward again on the solar panels EPR program. So you'll be seeing that one come through on AB864. And then we're also working with Assembly leader Aguilar Curry on the carpet program.

We're going to be doing some more tweaks that she was not able to get accomplished last year to try and make that program better. Thank you for the opportunity to talk.

Good afternoon, Chair and Members, Kim Stone, Stone Advocacy on behalf of the California Solar and Storage Association, working with the previous public commenter, Assembly Ward and others to try to make it possible to recycle and reuse parts of rooftop solar panels. California's laws and regulations make it virtually impossible to recycle solar panels in California.

It's happening, but it's happening out of state. And our own laws and regulations prohibit that. The industry is a little bit leery of some of the very strict EPR models that may be appropriate for other products but may not be appropriate for solar.

But is really enthusiastically part of the process to make sure that solar panels have a healthy and sustainable end of life. And just wanted to applaud the chair and Senator Allen and the staff for your work here and continue to be a part of it. Thank you so much.

Hi, my name is Shira Lane with Atrium 916. We're a creative innovation Center for sustainability. I do apologize for my voice today. I wanted to say a part like consumer education and consumer preference were brought up today and I think they're connected. Consumer preference and consumer education. Consumer preference depends on the contact point with the product.

So we have a creative innovation Center for sustainability. We see 148,000 people come through through. We're in Old Sacramento. We have a circular economy marketplace and we do public education on circular economy EPR and sustainability. So we do a lot of pilot projects. So a lot of this is coming from that.

So really consumer preference really depends on the contact point and the marketing of a product. And as an example, we did a pilot just this last holiday season where we did reusable to go.

We called them hot to go pilot project and it was amazing because everybody wanted to do it when we educated them on yes, we're not using single use cups because they're lined with plastic and has plastic inside.

And then everybody was excited to learn every time we engaged, apart from human interaction during the purchase point, there could be a deconstruction manual that could go on things and that can help educate the consumer, you know, how to dismantle or how to reuse. When we're talking about reuse, reuse should not be a burden on the consumer.

Right. Like products, it's like, well, they can reuse it at home. They can do this at home. No, reuse needs to be kind of like on the producer, but then it's also hard to quantify.

And so when we're quantifying reuse, it's like we need to quantify the returnables, how much was actually returned, and then how much was successfully reused, which is how much was returned back into the marketplace. So just kind of calculating reuse when it goes into that.

And when talking about reuse, we need to start thinking about really creating cohesive systems that make it possible for reuse, so that way small and larger companies can utilize reuse. Thank you so much.

Good afternoon, Madam Chair and Senator Allen and staff. Isabella Gonzalez Parra with the Nature Conservancy. We first just wanted to thank you for hosting this informational hearing. The Nature Conservancy was one of the environmental groups that worked closely with partners and other stakeholders on the SB54 process, as well as the ballot initiative.

We just wanted to thank you for hosting this hearing. We think it's really important that implementation continues the spirit of the Bill that we worked so hard to pass. We also just wanted to encourage CalRecycle and the Administration to continue to work diligently to to meet the upcoming March 7 deadline. So we appreciate your work. Thank you.

Madam Chair, Senator Allen, Randy Pollack, on behalf of the Carpet and Rug Institute, since we were mentioned once or twice today, I thought it was important to come up and just give a little explanation about the program. Over the last 13 years, this program has made significant progress.

You have to remember that in early 20122013 there was no infrastructure for carpet recycling. And carpet is probably one of the most difficult commodities to recycle because you have to deconstruct it. We started back with probably a recycling rate of about 3 or 4%. Today, we're at 38%. So we're exceeding our goals.

Now, there's been issues raised today about us being fined, and I would just like to mention that when we look at all these programs, that you have to look at the economics of it, as Ms. Koepke mentioned, for example, we were fined in 20 for 2020 and 2021, if you'll remember, we were fined $1.5 million.

It was Covid. All of our places were closed. No one could return anything. So of course our goals were not met. But there was really no discretion within the law that Cal Recycle saw that would give us leeway. There wasn't a good faith exemption in there for what you're doing, so we had to pay a significant fine.

I think what you're seeing today when you look at the other programs, for example, you'll look at the beverage container supposed to be at 80%. Recycling in 2022, they're at 61%. 2023, they're at 71%. The tire program, they're at 35%. They're supposed to be at 75%. I'm not being critical of how these programs are being overseen.

It's dealing with the economy. You have to look at what happens. Let me just give you just two quick examples about the carpet program. When you have a stewardship plan, you are forecasting a five year plan as to what you're going to collect.

So for example, a producer, a recycler will say, I'm going to collect£10 million and get it recycled. And so we'll discount that, the stewardship plan, and say it's£7 million. About six or seven months later they'll come back to you and say, guess what, my equipment broke.

Or I was going to sell this product to a manufacturer who makes plastic lumber, but Home Depot called me and says, guess what? People aren't building, building patios anymore. So therefore I can't take that. So now we're sort of stuck as a stewardship organization. How do you address that? Because we don't have control over those processors.

We can't just go in and all of a sudden start recycling it on our own. So I think in all these programs, whether it's SB54, whether it's batteries, that you have to look at the economics. For example, you know the horrible wildfires that happened down in center Allen's district. 16,000 structures destroyed.

Well, there's a lot of carpet there. And I'm saying this is probably the lowest priority of what everybody should be looking at. But we're looking at, well, we aren't going to be able to recover a certain amount of carpet for recycling because of those wildfires. And that may hinder our numbers where we may not meet our goals.

So in the end, I think it's very important for us to have flexibility in all these programs. And I just wanted to thank the new leadership over at Calorie Cycle.

They've been very good in outreaching to us to have discussions to make sure that we are working collaboratively because we all have the same goal, to make sure that we continue to improve our recycling structure. Thank you.

Thank you, Madam Chair, Senator Allen. And to all the panelists today, it was incredible, a lot of insightful information. My name is Melissa Kosalchuk and I represent Western Growers, and we are Western Growers represents the farmers and shippers and processors in the state. And there's been a lot of information today around packaging epr.

So I'd like to comment on SB and packaging EPR specifically. Just thinking about the unintended consequences. So right now we have a big focus on food waste, food security, and these are big concerns for small packages, really.

So when we're thinking about where does fresh produce fit into the grand scheme of things right now, the current draft of the final regulation, it doesn't leave a whole lot of room for flexibility on that, although that is the goal.

So we've been active in supporting EPR supporters of SB54, but we are still trying to figure out where do we.