Compare Versions

PDF |Add To My Favorites |Track Bill | print page

AB-729 Carpet recycling: carpet stewardship.(2019-2020)



Current Version: 04/10/19 - Amended Assembly        


AB729:v98#DOCUMENT

Amended  IN  Assembly  April 10, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill No. 729


Introduced by Assembly Member Chu

February 19, 2019


An act to amend Section 42972 of Sections 42972, 42974, and 42978 of, and to add Section 42972.7 to, the Public Resources Code, relating to recycling.


LEGISLATIVE COUNSEL'S DIGEST


AB 729, as amended, Chu. Carpet recycling: carpet stewardship organizations: succession: procedure. stewardship.
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. Recovery, and requires the department to approve or disapprove the plan. Existing law imposes a carpet stewardship assessment per unit of carpet sold in the state that is remitted by carpet manufacturers to the carpet stewardship organization and may be expended to carry out the organization’s carpet stewardship plan.
This bill would require a carpet stewardship organization to include in the carpet stewardship plan a description of the process by which the carpet stewardship organization will transfer assessment funds to a successor carpet stewardship organization in the event that such an action becomes necessary. The bill would require a carpet stewardship organization in possession of assessment funds to, as directed by the department, transfer those funds to a successor carpet stewardship organization with an approved plan. contingency plan should the carpet stewardship plan expire without approval of a new carpet stewardship plan or should the carpet stewardship plan be revoked. The bill would require a carpet stewardship organization to set up a trust fund or an escrow account, into which the bill would require the organization to deposit sufficient funds to implement the programs in the carpet stewardship plan for a period of one year, in the event that the carpet stewardship plan terminates or is revoked. The bill would require, if a carpet stewardship plan is revoked or terminated, the trustee or escrow agent to accept carpet stewardship assessment payments directly from manufacturers and to make payments from the trust fund or escrow account as the department directs, in writing, to implement the most recently approved carpet stewardship plan. The bill would authorize the department, if a new carpet stewardship plan has not been approved within one year after termination or revocation, to make modifications to the previously approved plan, as it deems necessary, and continue to direct payments from the trust fund or escrow account to implement the modified plan.
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, of up to $1,000 per day or $10,000 per day if the violation is intentional, knowing, or negligent.
This bill would instead authorize the department to administratively impose civil penalties on any person who is in violation of any provision of the carpet stewardship laws, of up to $10,000 per day.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

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

42972.
 (a) On or before September 30, 2011, 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) Achieve a 24-percent recycling rate for postconsumer carpet by January 1, 2020, and any other recycling rate established by the department pursuant to Section 42972.2. The carpet stewardship plan shall include quantifiable five-year goals and annual goals for how the recycling rate will be achieved and how the carpet stewardship organization or manufacturer plans to do the following:
(A) Increase the weight of postconsumer carpet that is recycled and reduce the disposal of postconsumer carpet.
(B) Increase the collection convenience for the recycling of postconsumer carpet and increase the collection of postconsumer carpet for recycling.
(C) Expand and incentivize markets for products made from postconsumer carpet.
(D) Increase processor capacity, including processor capacity in California.
(E) Increase the recyclability of carpet.
(3) Describe proposed measures that will enable 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.
(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, the requirements of Section 42972.7, payment of fees pursuant to Section 42977, and incentive payments that will advance the purposes of this chapter, including incentives or grants to state-approved apprenticeship programs for training apprentice and journey-level carpet installers in proper carpet recycling practices. Any grants or subsidies provided for the recycling of postconsumer carpet shall be structured to incentivize the recycling of carpet materials that have the highest recyclability. The funding mechanism shall account for the need to provide the industry, including carpet installation contractors, with fair notice of changes to the amount of the carpet stewardship assessment established pursuant to subdivision (c).
(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 description of the process by which the carpet stewardship organization will transfer assessment funds to a successor carpet stewardship organization in the event that such an action becomes necessary.

(7) Include a contingency plan should the plan expire without approval of a new plan or should the plan be revoked. The contingency plan shall demonstrate how the activities in the plan will continue to be carried out in the absence of a plan, either by the stewardship organization, or by the department through some other entity, such as an escrow company.
(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 expend the assessment only to carry out the plan.
(2) 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.
(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) Penalties imposed pursuant to Section 42978.
(B) Costs associated with litigation against the state.
(C) Engineered municipal solid waste conversion, as defined in Section 40131.2, the use of cement kilns to burn carpet, or transformation, as defined in Section 40201.

(d)A carpet stewardship organization in possession of assessment funds shall, as directed by the department, transfer those funds to a successor carpet stewardship organization with an approved plan.

(e)

(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.

(f)

(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.

 Section 42972.7 is added to the Public Resources Code, to read:

42972.7.
 (a) A carpet stewardship organization, as part of its carpet stewardship plan, shall set up a trust fund or an escrow account, into which it shall deposit sufficient funds to implement the programs in the carpet stewardship plan for a period of one year, in the event that the plan terminates or is revoked.
(b) If a carpet stewardship plan terminates or is revoked, the trustee or escrow agent of a trust fund or escrow account set up pursuant to subdivision (a) shall do both of the following:
(1) Accept carpet stewardship assessment payments directly from manufacturers into the trust fund or escrow account that would have been made to the stewardship organization prior to the carpet stewardship plan’s termination or revocation.
(2) Make payments from the trust fund or escrow account as the department shall direct, in writing, to implement the most recently approved plan.
(c) If a new carpet stewardship plan has not been approved by the department within one year after termination or revocation, the department may make modifications to the previously approved plan, as it deems necessary, and continue to direct payments from the trust fund or escrow account in accordance with paragraph (2) of subdivision (b) to implement the modified plan.
(d) A trustee or escrow agent in possession of assessment funds shall, as directed by the department, transfer those funds to a successor carpet stewardship organization with an approved plan.

SEC. 3.

 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 carpet is not subject to a 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.
(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 internet website listing manufacturers that are in compliance with this chapter.
(2) A manufacturer that is not listed on the department’s Internet Web site internet website 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 wholesaler or retailer that distributes or sells carpet shall monitor the department’s Internet Web site internet website to determine if the sale of a 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 shall be deemed in compliance with this section 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. internet website.
(e) If a carpet stewardship plan that was previously approved by the department pursuant to Section 42973 terminates or is revoked, the department may allow a manufacturer that is no longer subject to that plan because the plan terminated or was revoked to continue to sell carpet in California for a period of one year after the plan terminated or was revoked, without being subject to penalties pursuant to this section or Section 42978, if the manufacturer does either of the following:
(1) The manufacturer continues to operate under the most recent approved carpet stewardship plan that the manufacturer was subject to. to and makes assessment payments to the trust fund or escrow account as provided for in paragraph (1) of subdivision (b) of Section 42972.7.
(2) The manufacturer provides the department with an alternative carpet recycling plan governing its own products that are sold in California, and the department approves the manufacturer’s alternative carpet recycling plan.

SEC. 4.

 Section 42978 of the Public Resources Code is amended to read:

42978.
 (a) A civil penalty up to the following amounts ten thousand dollars ($10,000) per day may be administratively imposed by the department on any person who is in violation of any provision of this chapter: chapter.

(1)One thousand dollars ($1,000) per day.

(2)Ten thousand dollars ($10,000) per day if the violation is intentional, knowing, or negligent.

(b) In assessing or reviewing the amount of a civil penalty imposed pursuant to subdivision (a) for a violation of this chapter, the department or the court shall consider all of the following:
(1) The nature and extent of the violation.
(2) The number and severity of the violation or violations.
(3) The economic effect of the penalty on the violator.
(4) Whether the violator took good faith measures to comply with this chapter and the period of time over which these measures were taken.
(5) The willfulness of the violator’s misconduct.
(6) The deterrent effect that the imposition of the penalty would have on both the violator and the regulated community.
(7) Any other factor that justice may require.