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AB-1158 Carpet recycling.(2017-2018)

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Date Published: 06/22/2017 04:00 AM
AB1158:v96#DOCUMENT

Amended  IN  Senate  June 21, 2017
Amended  IN  Assembly  May 08, 2017
Amended  IN  Assembly  April 17, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1158


Introduced by Assembly Member Chu
(Coauthor: Assembly Member Mark Stone)

February 17, 2017


An act to amend Section 42972 Sections 42971, 42972, 42972.5, 42973, 42974, 42975, 42976, 42977.1, and 42982 of, and to add Section Sections 42972.1 and 42972.2 to, the Public Resources Code, relating to recycling.


LEGISLATIVE COUNSEL'S DIGEST


AB 1158, as amended, Chu. Carpet recycling.

Existing

(1) Existing law requires a manufacturer of carpets sold in this state to submit, either individually or through a carpet stewardship organization, a carpet stewardship plan that meets specified requirements to the Department of Resources Recycling and Recovery. Existing law requires the department to review and approve or deny approval of a plan, as specified. Existing law imposes a carpet stewardship assessment per unit of carpet sold in the state that is remitted to carpet stewardship organizations and may be expended to carry out the organization’s carpet stewardship plan.
This bill would revise the requirements for a carpet stewardship plan and would require a carpet stewardship organization to include in its plan, and achieve by January 1, 2020, a 24% recycling rate goal, and other recycling rate goals set by the department in regulation on and after January 1, 2021. The bill would create an advisory committee that would be required to make recommendations to manufacturers and carpet stewardship organizations on carpet stewardship plans. The bill would require the Director of Resources Recycling and Recovery, the Speaker of the Assembly, and the Senate Rules Committee to appoint members to the advisory committee, as specified. The bill would require a carpet stewardship plan to include a process by which the manufacturer or carpet stewardship organization receives and subsequently responds, in writing, to plan recommendations from the advisory committee. The bill would require the manufacturer or carpet stewardship organization to submit to the director, in writing, its reasons for rejecting any specific recommendations made by the advisory committee. The bill would prohibit a carpet stewardship organization from expending funds from the carpet stewardship assessment for specified costs and penalties, including costs associated with the incineration or disposal of postconsumer carpet. The bill would prohibit the department from approving a plan that provides subsidies, or spends any assessment funds, for activities related to the incineration or disposal of postconsumer carpet.
(2) Existing law authorizes the department to administratively impose civil penalties on any person who is in violation of any provision of the carpet stewardship laws. Existing law requires all civil penalties collected to be deposited in the Carpet Stewardship Penalty Subaccount and authorizes the department to expend those funds, upon appropriation by the Legislature, to cover the department’s costs to implement the carpet stewardship laws.
This bill would authorize those funds to be expended by the department, upon appropriation by the Legislature, for the purposes of the carpet stewardship laws.
(3) Existing law provides that a manufacturer, wholesaler, or retailer that offers a carpet for sale or promotional purposes in this state is not in compliance with the carpet stewardship laws and is subject to civil penalties if the carpet is not subject to a carpet stewardship plan, approved by the department, that is submitted by an organization that includes the manufacturer of that carpet.
This bill would relieve wholesalers and retailers from civil penalties under those circumstances, except as provided in (4), below.
(4) Existing law requires a wholesaler or retailer that distributes or sells carpet to monitor the department’s Internet Web site to determine if the sale of a manufacturer’s carpet is in compliance with the requirements of the carpet stewardship laws. Existing law authorizes the department to impose civil penalties on any person in violation of any provision of the carpet stewardship laws.
This bill would provide that the requirement to monitor the department’s Internet Web site applies only if the manufacturer has, individually or through a carpet stewardship organization, an approved carpet stewardship plan in place. The bill would prohibit a wholesaler or retailer from selling or distributing carpet from a manufacturer that has an approved carpet stewardship plan in place, but is out of compliance with the carpet stewardship laws. A wholesaler or retailer that violates those provisions would be subject to civil penalties.
(5) Existing law requires a carpet stewardship organization to submit to the department a report describing its activities to achieve the purposes of the carpet stewardship laws, and requires the report to include, at a minimum, certain information.
This bill would require that report to include the amount of assessment funds expended to support the disposal or incineration of postconsumer carpet.
(6) Existing law requires, until April 1, 2015, that a particular carpet stewardship organization be the sole carpet stewardship organization in the state, and makes references to that organization throughout the carpet stewardship laws.
This bill would replace references to that particular carpet stewardship organization with general references to a carpet stewardship organization.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 42971 of the Public Resources Code is amended to read:

42971.
 For purposes of this chapter, and unless the context otherwise requires, the definitions in this section govern the construction of this chapter:
(a) “Approved carpet stewardship plan” or “approved plan” means a plan approved by the department pursuant to Section 42973.

(a)

(b) “Brand” means a name, symbol, word, or mark that identifies the carpet, rather than its components, and attributes the carpet to the owner or licensee of the brand as the manufacturer.

(b)“CARE” means the Carpet America Recovery Effort, a third-party nonprofit carpet stewardship organization incorporated as a nonprofit corporation pursuant to Section 501(c)(3) of Title 26 of the United States Code in 2002 and established to increase the reclamation and stewardship of postconsumer carpet.

(c)“CARE MOU” means the 2012 Memorandum of Understanding for Carpet Stewardship, as to be negotiated among the carpet industry, states, and nongovernmental organization stakeholders as a successor to the 2002 memorandum of understanding.

(d)

(c) (1) “Carpet” means a manufactured article that is used in commercial or residential buildings affixed or placed on the floor or building walking surface as a decorative or functional building interior feature and that is primarily constructed of a top visible surface of synthetic face fibers or yarns or tufts attached to a backing system derived from synthetic or natural materials.
(2) “Carpet” includes, but is not limited to, a commercial or a residential broadloom carpet or modular carpet tiles.
(3) “Carpet” does not include a rug, pad, cushion, or underlayment used in conjunction with, or separately from, a carpet.

(e)(1)

(d) “Carpet stewardship organization” or “organization” means either of the following:

(A)

(1) An organization appointed by one or more manufacturers to act as an agent on behalf of the manufacturer or manufacturers to design, submit, and administer a carpet stewardship plan pursuant to this chapter.

(B)

(2) A carpet manufacturer that complies with this chapter as an individual manufacturer.

(2)Notwithstanding paragraph (1), until April 1, 2015, CARE shall be the sole carpet stewardship organization pursuant to subparagraph (A) of paragraph (1).

This paragraph does not restrict the option of an individual carpet manufacturer to comply with this chapter as a carpet stewardship organization, on and after January 1, 2011, pursuant to subparagraph (B) of paragraph (1).

(f)

(e) “Carpet stewardship plan” or “plan” means a plan written by an individual manufacturer or a carpet stewardship organization, on behalf of one or more manufacturers, that includes all of the information required by Section 42972.

(g)

(f) “Consumer” means a purchaser, owner, or lessee of carpet, including a person, business, corporation, limited partnership, nonprofit organization, or governmental entity.

(h)

(g) “Department” means the Department of Resources Recycling and Recovery.

(i)

(h) “Label” means a graphic representation of three chasing arrows with a carpet roll inside the arrows, or an alternative design, designed by CARE, a carpet stewardship organization, after consultation with retailers and wholesalers, and approved by the department for use on all invoices or functionally equivalent billing documents pursuant to subparagraph (C) of paragraph (3) of subdivision (c) of Section 42972.

(j)

(i) “Manufacturer” means, with regard to a carpet that is sold, offered for sale, or distributed in the state any of the following:
(1) The person who manufactures the carpet and who sells, offers for sale, or distributes that carpet in the state under that person’s own name or brand.
(2) If there is no person who sells, offers for sale, or distributes the carpet in the state under the person’s own name or brand, the manufacturer of the carpet is the owner or licensee of a trademark or brand under which the carpet is sold or distributed in the state, whether or not the trademark is registered.
(3) If there is no person who is a manufacturer of the carpet for the purpose of paragraphs (1) and (2), the manufacturer of that carpet is the person who imports the carpet into the state for sale or distribution.

(k)

(j) “Postconsumer carpet” means carpet that is no longer used for its manufactured purpose.

(l)

(k) “Recycling” means the process, consistent with Section 40180, of converting postconsumer carpet into a useful product that meets the quality standards necessary to be used in the marketplace.

(m)

(l) “Retailer” means a person who offers new carpet in a retail sale, as defined in Section 6007 of the Revenue and Taxation Code, including a retail sale through any means, including remote offerings such as sales outlets, catalogs, or an Internet Web site or other similar electronic means.

(n)

(m) “Sell” or “sales” means a transfer of title of a carpet for consideration, including a remote sale conducted through a sales outlet, catalog, Internet Web site or similar electronic means. For purposes of this chapter, “sell” or “sales” includes a lease through which a carpet is provided to a consumer by a manufacturer, wholesaler, or retailer.
(n) “Take back location” means a facility that accepts postconsumer carpet for recycling.
(o) “Wholesaler” means a person who offers new carpet for sale in this state in a sale that is not a retail sale, as defined in Section 6007 of the Revenue and Taxation Code, and in which the carpet is intended to be resold.

SECTION 1.SEC. 2.

 Section 42972 of the Public Resources Code is amended to read:

42972.
 (a) A manufacturer of carpets sold in this state shall, individually or through a carpet stewardship organization, submit a carpet stewardship plan to the department that will do all of the following:
(1) Achieve the purposes of this chapter, as described in Section 42970, and meet the requirements of Section 42975.
(2) Include goals that, to the extent feasible based on that utilize available technology and information, information to increase the recycling of postconsumer carpet, increase the diversion of postconsumer carpets from landfills, landfills and incineration, increase the recyclability of carpets, and incentivize the market growth of secondary products made from postconsumer carpet. The goals established in the plan shall, at a minimum, be equal to the goals established in the CARE MOU, if it has been adopted at the time the plan is submitted to the department.
(3) Describe proposed measures that will enable ensure the management of postconsumer carpet in a manner consistent with the state’s solid waste management hierarchy, including, but not limited to, source reduction, source separation and processing to segregate and recover recyclable materials, and environmentally safe management of materials that cannot feasibly be recycled. hierarchy, as specified in Section 40051.
(4) Include a funding mechanism, consistent with subdivision (c), that provides sufficient funding to carry out the plan, including the administrative, operational, and capital costs of the plan, payment of fees pursuant to Section 42977, and incentive payments that will advance the purposes of this chapter.
(5) Include education and outreach efforts to consumers, commercial building owners, carpet installation contractors, and retailers to promote their participation in achieving the purposes of the carpet stewardship plan as described in paragraph (1). These education and outreach materials may include, but are not limited to, any of the following:
(A) Signage that is prominently displayed and easily visible to the consumer.
(B) Written materials and templates of materials for reproduction by retailers to be provided to carpet installation contractors and consumers at the time of purchase or delivery or both.
(C) Promotional materials or activities, or both, that explain the purpose of carpet stewardship and the means by which it is being carried out.
(6) Include a process by which the financial activities of the organization or individual manufacturer that are related to implementation of the plan will be subject to an independent audit, which may be reviewed by the department.
(7) Include a process by which the manufacturer or carpet stewardship organization receives and subsequently responds, in writing, to plan recommendations from the advisory committee created pursuant to Section 42972.1. The manufacturer or carpet stewardship organization shall submit to the Director of Resources Recycling and Recovery, in writing, its reasons for rejecting any specific recommendations made by the advisory committee.
(8)  Include a goal of meeting a 24 percent carpet recycling rate by January 1, 2020, and any other carpet recycling rate goals set by the department pursuant to Section 42972.2.
(9) Include a projection of recovery and recycling rates and a description of efforts to meet the recycling goals specified in paragraph (8).
(10) Provide that at least one take-back location be established in each county.
(b) The plan prepared pursuant to this section shall be designed to accept and manage all suitable postconsumer carpet, regardless of polymer type or primary materials of construction.
(c) (1) The funding mechanism required pursuant to paragraph (4) of subdivision (a) shall establish and provide for, on and after January 1, 2013, a carpet stewardship assessment per unit of carpet sold in the state in an amount that cumulatively will adequately fund the plan and be consistent with the purposes of the chapter. The assessment shall be remitted to the carpet stewardship organization on a quarterly basis and the carpet stewardship organization may shall expend the assessment only to carry out the plan.
(2) (A) The amount of the assessment and the anticipated revenues from the assessment shall be specified in the plan and shall be approved by the department as part of the plan. The amount of the assessment shall be sufficient to meet, but not exceed, the anticipated cost of carrying out the plan. The amount of the assessment shall not create an unfair advantage in the marketplace.
(B) For purposes of this chapter, an assessment differential that accounts for the varied costs of recycling carpet shall not be considered as creating an “unfair advantage in the marketplace.”
(3) The assessment established pursuant to this subdivision and Section 42972.5 is exempt from the taxes imposed by Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code and shall meet both of the following requirements:
(A) The assessment shall be added by a manufacturer to the purchase price of all carpet sold by manufacturers to a California retailer or wholesaler or otherwise sold for use in the state. The assessment shall be clearly visible on invoices or functionally equivalent billing documents as a separate line item and shall be accompanied by a brief description of the assessment or a label approved by the department.
(B) Each retailer and wholesaler shall add the assessment to the purchase price of all carpet sold in the state. The assessment shall be clearly visible on invoices or functionally equivalent billing documents as a separate line item and shall be accompanied by a brief description of the assessment or a label approved by the department.
(4) A carpet stewardship organization shall not expend funds from the assessment for any of the following purposes:
(A) Activities related to the disposal or incineration of carpet.
(B) Penalties imposed pursuant to Section 42978.
(C) Costs associated with litigation against the state.
(d) A carpet stewardship organization that submits a plan pursuant to this section shall consult with retailers and wholesalers in the development of the plan, in order to minimize the impacts of the plan on retailers and wholesalers.
(e) A carpet stewardship organization shall notify the department within 30 days after instituting a significant or material change to an approved carpet stewardship plan.

SEC. 2.SEC. 3.

 Section 42972.1 is added to the Public Resources Code, to read:

42972.1.
 The Director of Resources Recycling and Recovery shall appoint members to an advisory committee, which shall make recommendations on carpet stewardship plans submitted to the department pursuant to Section 42971. 42972. The Speaker of the Assembly and the Senate Committee on Rules shall each appoint one additional member to the advisory committee. The advisory committee may be composed of, among others, individuals in the environmental community, the solid waste industry, and local government, public or private representatives involved in the collection, processing, and recycling of carpet, and other interested parties as determined by the Director of Resources Recycling and Recovery.

SEC. 4.

 Section 42972.2 is added to the Public Resources Code, to read:

42972.2.
 On and after January 1, 2021, the department may adopt regulations to set carpet recycling rate goals for carpet stewardship organizations.

SEC. 5.

 Section 42972.5 of the Public Resources Code is amended to read:

42972.5.
 (a) Notwithstanding paragraph (1) of subdivision (c) of Section 42972, on and after July 1, 2011, but not on or after January 1, 2013, until the approval of a plan applicable to that manufacturer, a manufacturer of carpet shall add a carpet stewardship assessment of five cents ($0.05) per square yard to the purchase price of all carpet sold in the state by that manufacturer. The assessment added pursuant to this subdivision shall be remitted on a quarterly basis, as appropriate, to CARE basis to the applicable carpet stewardship organization or be retained by the individual manufacturer referred to in subparagraph (B) of paragraph (1) (2) of subdivision (d) of Section 42971, for expenditure pursuant to subdivision (b).
(b) Prior to approval of a carpet stewardship plan, CARE a carpet stewardship organization or an individual manufacturer shall spend revenues from the assessment imposed pursuant to subdivision (a) only to implement early action measures that are consistent with the purposes of this chapter and that are designed to achieve measurable improvements in the landfill diversion and recycling of postconsumer carpet.

SEC. 6.

 Section 42973 of the Public Resources Code is amended to read:

42973.
 (a) (1) Within 60 days after the department receives a plan submitted pursuant to Section 42972, it shall review the plan, determine whether it complies with Section 42972, and notify the submitter of its decision to approve or not approve the plan.
(2) On or after April 1, 2015, an organization appointed by one or more manufacturers to act as an agent on behalf of the manufacturer or manufacturers to design, submit, and administer a carpet stewardship plan pursuant to this chapter may submit a plan to the department pursuant to Section 42972 and that plan may be approved by the department, subject to the requirements of paragraph (1), only if the department makes both of the following findings:
(A) The plan will not have the effect of reducing the level of diversion and recycling of postconsumer carpet that has been achieved pursuant to this chapter at the time the department reviews the plan.
(B) The amount of the assessment in the plan will not create an unfair advantage in the marketplace for one or more of the companies in the organization.
(b) If the department does not approve the plan, it shall describe the reasons for its disapproval in the notice. The submitter may revise and resubmit the plan within 60 days after receiving notice of disapproval and the department shall review and approve or not approve the revised plan within 60 days after receipt. Any plan not approved by March 31, 2012, shall be out of compliance with this chapter and the submitter of the plan is subject to the penalties specified in Section 42978 until the plan is approved by the department.
(c) The department shall not approve a plan that provides subsidies, or spends any assessment funds, for activities related to the incineration or disposal of postconsumer carpet.

SEC. 7.

 Section 42974 of the Public Resources Code is amended to read:

42974.
 (a) The department shall enforce this chapter.
(b) On and after April 1, 2012, a manufacturer, wholesaler, or retailer that offers a carpet for sale in this state, or who offers a carpet for promotional purposes in this state, is not in compliance with this chapter and is subject to penalties pursuant to Section 42978, if the A manufacturer shall not offer for sale or for promotional purposes in this state a carpet that is not subject to a an approved plan that is submitted by an organization that includes the manufacturer of that carpet, which plan has been approved by the department pursuant to Section 42973. that manufacturer.
(c) (1) On July 1, 2012, and not later than January 1 and July 1 annually thereafter, the department shall post a notice on its Internet Web site listing manufacturers that are in compliance with this chapter.
(2) A manufacturer that is not listed on the department’s Internet Web site pursuant to this subdivision, but demonstrates to the satisfaction of the department that the manufacturer is in compliance with this chapter before the next notice is required to be posted, may request a certification letter from the department stating that the manufacturer is in compliance. The letter shall constitute proof of compliance with this chapter.
(d) A If a manufacturer has, individually or through a carpet stewardship organization, an approved plan in place, a wholesaler or retailer that distributes or sells carpet from that manufacturer shall monitor the department’s Internet Web site to determine if the sale of a that manufacturer’s carpet is in compliance with the requirements of this chapter. Notwithstanding Section 42978, a wholesaler or retailer otherwise in compliance with this chapter this chapter, and shall not distribute or sell carpet from that manufacturer if the manufacturer is out of compliance with this chapter. For purposes of this subdivision, a manufacturer shall be deemed in compliance with this section chapter if, on the date the wholesaler or retailer ordered or purchased carpet, the manufacturer was listed as a compliant manufacturer on the department’s Internet Web site.

SEC. 8.

 Section 42975 of the Public Resources Code is amended to read:
42975.

(a)In order to achieve compliance with this chapter, a carpet stewardship organization shall, on or before July 1, 2013, and annually thereafter, demonstrate to the department that it has achieved continuous meaningful improvement in the rates of recycling and diversion of postconsumer carpet subject to its stewardship plan and in meeting the other goals included in the organization’s plan pursuant to paragraph (2) of subdivision (a) of Section 42972. In determining compliance, the department shall consider all of the following:

(1)The baseline rate of compliance against which the demonstrated improvement is compared.

(2)The goals included in the CARE MOU.

(3)Information provided in the organization’s report to the department pursuant to Section 42976.

42975.
 (a) A carpet stewardship organization shall achieve a 24 percent carpet recycling rate by January 1, 2020, and any other carpet recycling rate goals set by the department pursuant to Section 42972.2.
(b) If more than one organization submits a carpet stewardship plan pursuant to this chapter, the department shall use information submitted by the organization in its annual report pursuant to Section 42976 to determine to what extent the recycling and diversion rates and the achievement of the other goals included in the plan are attributable to each organization and shall determine compliance with this chapter accordingly.

SEC. 9.

 Section 42976 of the Public Resources Code is amended to read:

42976.
 On or before July 1, 2013, and each year thereafter, a manufacturer of carpet sold in the state shall, individually or through a carpet stewardship organization, submit to the department a report describing its activities to achieve the purposes of this chapter, as described in Section 42970, and to comply with Section 42975. At a minimum, the report shall include all of the following:
(a) The amount of carpet sold by square yards and weight, in the state during the reporting period. A carpet stewardship organization with more than one manufacturer may use average weight.
(b) The amount of postconsumer carpet recycled, by weight, during the reporting period.
(c) The amount of postconsumer carpet recovered but not recycled, by weight, and its ultimate disposition.
(d) The total cost of implementing the carpet stewardship plan.
(e) An evaluation of the effectiveness of the carpet stewardship plan, and anticipated steps, if needed, to improve performance.
(f) Examples of educational materials that were provided to consumers during the reporting period.

SEC. 10.

 Section 42977.1 of the Public Resources Code is amended to read:

42977.1.
 (a) The Carpet Stewardship Account and the Carpet Stewardship Penalty Subaccount are hereby established in the Integrated Waste Management Fund.
(b) All fees collected by the department pursuant to this article shall be deposited in the Carpet Stewardship Account and may be expended by the department, upon appropriation by the Legislature, to cover the department’s costs to implement and enforce this chapter.
(c) All civil penalties collected pursuant to this article shall be deposited in the Carpet Stewardship Penalty Subaccount and may be expended by the department, upon appropriation by the Legislature, to cover the department’s costs to implement this chapter. for purposes of this chapter.

SEC. 11.

 Section 42982 of the Public Resources Code is amended to read:

42982.
 The Department of General Services shall, to the extent feasible and within existing resources, take appropriate steps, including, but not limited to, revising relevant procurement rules, to ensure that postconsumer both of the following:
(a) Postconsumer carpet that is removed from state buildings is managed in a manner consistent with the purpose of this chapter.
(b) Carpet purchased by state agencies exceeds the postconsumer material standards required pursuant to Article 4 (commencing with Section 12200) of Chapter 4 of Part 2 of Division 2 of the Public Contract Code.