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AB-478 Solid waste: thermoform plastic containers: postconsumer thermoform recycled plastic: commingled rates.(2021-2022)

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Date Published: 07/05/2021 09:00 PM
AB478:v95#DOCUMENT

Amended  IN  Senate  July 05, 2021
Amended  IN  Senate  June 17, 2021
Amended  IN  Assembly  April 21, 2021
Amended  IN  Assembly  March 18, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 478

Introduced by Assembly Members Ting, Lorena Gonzalez, and Irwin
(Principal coauthor: Senator Skinner)

February 08, 2021

An act to amend Sections 14506.7 and 14549.5 of, and to add Chapter 6.2 (commencing with Section 42375) to Part 3 of Division 30 of, the Public Resources Code, relating to solid waste.


LEGISLATIVE COUNSEL'S DIGEST


AB 478, as amended, Ting. Solid waste: thermoform plastic containers: postconsumer thermoform recycled plastic: commingled rates.
(1) The California Integrated Waste Management Act of 1989, administered by the Department of Resources Recycling and Recovery, requires a rigid plastic packaging container, as defined, sold or offered for sale in this state, to meet, on average, at least one of 5 specified criteria, including that the container be made from 25% postconsumer material.
This bill, on and after January 1, 2024, would require the total thermoform plastic containers, as defined, sold by a producer, as defined, or purchased in a certain quantity, in the state to contain, on average, specified amounts of postconsumer thermoform recycled plastic, as defined, per year pursuant to a tiered plan that would require the total thermoform plastic containers to contain, on average, and depending on the recycling rate, no less than 20% or 30% postconsumer recycled plastic per year on and after June 1, 2030. The bill would exclude a person or company that produces, harvests, and packages an agricultural commodity on the site where the commodity is grown or raised from this requirement.
The bill would authorize the department to conduct audits and investigations and take an enforcement action against a producer for the purpose of ensuring compliance. The bill would exempt from the California Public Records Act trade secrets and proprietary information obtained from those audits and investigations.
The bill would impose annual administrative penalties in a specified amount, calculated and authorized to be adjusted by the department, as prescribed, on a producer for violating these requirements. The bill would require collected administrative penalties to be deposited into the Thermoform Recycling Enhancement Penalty Account, which the bill would create. The bill would make moneys in the penalty account available only upon appropriation by the Legislature.
The bill would require, on or before March 1 of each year, a producer to report to the department, under penalty of perjury, the amount in pounds and by resin type of virgin plastic and postconsumer thermoform recycled plastic used to manufacture the thermoform plastic containers sold or offered for sale in the state in the previous calendar year. The bill would require certain importers and manufacturers of thermoform plastic containers to register and pay a fee to the department and would require those entities and certain purchasers and exporters of those containers to, on or before March 1 of each year, report to the department specified sales and other information. The bill would also require certain of those entities to maintain specified records and documentation. By expanding the crime of perjury, the bill would impose a state-mandated local program. The bill would require the department to post the reported information on its internet website, as specified.
(2) The California Beverage Container Recycling and Litter Reduction Act, which is administered by the Department of Resources Recycling and Recovery, is established to promote beverage container recycling and provides for the payment, collection, and distribution of certain payments and fees based on minimum refund values established for beverage containers. Under the act, “commingled rate” is defined as the ratio of empty beverage containers to all other containers of the same material type, as determined by the department. The act requires the department to recalculate commingled rates paid for beverage containers and postfilled containers, as provided. The act authorizes the department to calculate a curbside recycling program commingled rate for bimetal containers, and a combined commingled rate for all plastic beverage containers displaying certain resin identification codes, as provided.
This bill would instead define “commingled rate” as the ratio of empty beverage containers to all other containers of the same material type and form, as determined by the department. The bill would delete the department’s authority related to commingled rates for bimetal containers and plastic beverage containers, as described above. The bill would require the department to exclude thermoform plastic for purposes of calculating the commingled rate for each type of plastic container.
(3) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.
(4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) For the past two decades, polyethylene terephthalate thermoform clamshell packaging has contained the most California-recycled content of any food packaging in the United States.
(2) In another step to further reduce the produce industry’s environmental impact, major fresh produce growers announced their commitment to using sustainable packaging.
(3) This commitment to recyclable packaging complements existing actions that use recycled content to make thermoform food packaging.
(4) Clamshell packaging revolutionized the ability of farmers to transport their fresh produce to consumers nationwide. The industry is working together on the next phase of that revolution, one that preserves the ability to safely transport fresh produce to market while minimizing product damage, reducing food waste, and demonstrating ongoing environmental stewardship.
(5) Since the 1990s, many farmers have shifted to the use of clear plastic packaging shaped as a vented box with a hinged lid, also known as a clamshell. This type of packaging created a market to convert recycled plastic water bottles into clear, lightweight containers that protect the fruit from damage and contamination, thus reducing food waste.
(6) Further, this type of packaging decreases greenhouse gas emissions by reducing the amount of raw resources needed to make the packaging and reducing fuel use as lighter packaging makes lighter shipments.
(7) Beyond the climate-friendly reduction in resource use and greenhouse gas emissions, enhanced plastic recycling generates jobs and economic benefits for local communities, creating a circular economy to produce, collect, recycle, and reprocess plastic clamshells.
(b) It is the intent of the Legislature in enacting this act to close the loop on thermoform plastic containers used in food and beverage applications in California, ultimately achieving a 75-percent recycling rate for thermoform plastic containers.

SEC. 2.

 Section 14506.7 of the Public Resources Code is amended to read:

14506.7.
 “Commingled rate” means the ratio of empty beverage containers, as defined in Section 14512, to all other containers of the same material type and form, as determined by the department.

SEC. 3.

 Section 14549.5 of the Public Resources Code is amended to read:

14549.5.
 (a) On or before April 1, 2004, and annually thereafter, or more frequently as determined to be necessary by the department, the department shall review and, if necessary in order to ensure payment of the most accurate commingled rate feasible, recalculate commingled rates paid for beverage containers and postfilled containers paid to curbside recycling programs and collection programs. Before recalculating a commingled rate pursuant to this section, the department shall do all of the following:
(1) Consult with private and public operators of curbside recycling programs and collection programs concerning the size of the statewide sample, appropriate sampling methodologies, and alternatives to exclusive reliance on a statewide commingled rate.
(2) At least 60 days before the effective date of any new commingled rate, hold a public hearing, after giving notice, to make available to the public and affected parties the department’s review and any proposed recalculations of the commingled rate.
(3) At least 60 days before the effective date of any new commingled rate, and upon the request of any party, make available documentation or studies that were prepared as part of the department’s review of a commingled rate.
(b) For purposes of calculating the commingled rate for each type of plastic container, the department shall exclude thermoform plastic.

SEC. 4.

 Chapter 6.2 (commencing with Section 42375) is added to Part 3 of Division 30 of the Public Resources Code, to read:
CHAPTER  6.2. Thermoform Plastic Containers

42375.
 For purposes of this chapter, the following definitions apply:
(a) “Postconsumer thermoform recycled plastic” means plastic produced from the recovery, separation, collection, and reprocessing of a thermoform plastic container that would otherwise be disposed of or processed as waste after consumer use.
(b) (1) “Producer” means the person who manufactures the thermoform plastic container in the state under that person’s own name or brand and who sells or offers for sale the thermoform plastic container in the state.
(2) If there is no person who is the producer for purposes of paragraph (1) in the state, the producer is the person who imports the thermoform plastic container as the owner or licensee of a trademark or brand under which the thermoform plastic container is sold or distributed in the state.
(3) If there is no person who is the producer for purposes of paragraphs (1) and (2) in the state, the producer is the person or company that offers for sale, sells, or distributes the thermoform plastic container in the state.
(4) “Producer” does not include a person or company that produces, harvests, and packages an agricultural commodity on the site where the agricultural commodity was grown or raised.
(c) (1) “Thermoform plastic container” means a plastic container, such as a clamshell, cup, tub, lid, box, tray, egg carton, or similar rigid, nonbottle packaging, formed from sheets of extruded resin and used to package items such as fresh produce, baked goods, nuts, and deli items.
(2) “Thermoform plastic container” does not include any of the following:
(A) A lid or seal of a different material type from plastic.
(B) Thermoform plastic containers that are medical devices, medical products that are required to be sterile, prescription medicine, and packaging used for those products.
(C) A refillable thermoform plastic container that ordinarily would be returned to the manufacturer to be refilled and resold.
(D) A plastic beverage container subject to the California Beverage Container Recycling and Litter Reduction Act (Division 12.1 (commencing with Section 14500)).
(E) A thermoform plastic container of a resin type for which the total amount of the resin type sold in California annually is either of the following:
(i) Less than 1,000,000 pounds for a resin type other than expanded polystyrene.
(ii) Less than 50,000 pounds of expanded polystyrene.
(F) A thermoform plastic container that is designed to be composted and is eligible to be labeled “compostable” pursuant to Section 42357.

42376.
 (a) Thermoform plastic containers offered for sale, sold, distributed, or imported in or into the state by a producer shall meet the following, as applicable:
(1) On and after January 1, 2024, the total thermoform plastic containers sold by a producer in the state shall, on average, contain no less than 10 percent postconsumer thermoform recycled plastic per year.
(2) On and after June 1, 2027, the total thermoform plastic containers sold by a producer in the state shall meet either of the following requirements, as applicable:
(A) If the recycling rate for each a resin type of thermoform plastic container equal equals or exceeds 50 percent for calendar year 2026, the total thermoform plastic containers for that resin type sold by a producer in the state shall, on average, contain no less than 20 percent postconsumer thermoform recycled plastic per year.
(B) If the recycling rate for each a resin type of thermoform plastic container is lower than 50 percent for calendar year 2026, the total thermoform plastic containers for that resin type sold by a producer in the state shall, on average, contain no less than 25 percent postconsumer thermoform recycled plastic per year.
(3) On and after June 1, 2030, the total thermoform plastic containers sold by a producer in the state shall meet either of the following requirements, as applicable:
(A) If the recycling rate for each a resin type of thermoform container equals or exceeds 75 percent for calendar year 2029, the total thermoform plastic containers for that resin type sold by a producer in the state shall, on average, contain no less than 20 percent postconsumer thermoform recycled plastic per year.
(B) If the recycling rate for each a resin type of thermoform container is lower than 75 percent for calendar year 2029, the total thermoform plastic containers for that resin type sold by a producer in the state shall, on average, contain no less than 30 percent postconsumer thermoform recycled plastic per year.
(b) In determining a recycling rate for each resin type of thermoform container for purposes of this section, the department may consider data gathered pursuant to any of the following:
(1) The Recycling and Disposal Facility Reporting System established pursuant to Section 41821.5.
(2) Data and information received from producers.
(3) Any other relevant data and information received by the department.
(c) (1) Beginning January 1, 2024, a producer that does not meet the minimum postconsumer thermoform recycled plastic requirements pursuant to subdivision (a) is subject to an annual administrative penalty pursuant to this subdivision. Beginning March 1, 2025, the administrative penalty shall be collected annually, if a reduction has not been approved pursuant to subdivision (f), and calculated in accordance with subdivision (d).
(2) A producer that is assessed penalties pursuant to this subdivision may pay those penalties to the department in quarterly installments or arrange an alternative payment schedule subject to the approval of the department, not to exceed a 12-month payment plan. The department may grant a one-time extension, at the discretion of the director, of up to 12 months if needed due to unforeseen circumstances, such as a public health emergency, state of emergency, or natural disaster.
(d) Beginning March 1, 2025, and annually thereafter, the department shall invoice any assessed administrative penalties for the previous calendar year based on the postconsumer thermoform recycled plastic requirement of the previous calendar year. The department shall calculate the amount of the penalty based upon the amount in pounds in the aggregate of virgin and postconsumer thermoform recycled plastic used by the producer to produce thermoform plastic containers sold or offered for sale in the state, in accordance with the following:
(1) The annual administrative penalty amount assessed to a producer shall equal the product of both of the following:
(A) The total pounds of plastic used multiplied by the relevant minimum postconsumer thermoform recycled plastic percentage, less the pounds of postconsumer thermoform recycled plastic used.
(B) Twenty cents ($0.20) per pound for a resin type other than expanded polystyrene, and four dollars ($4.00) per pound for expanded polystyrene. The department may adjust the penalty annually pursuant to this subparagraph to reflect changes in the cost of living, as measured by the Bureau of Labor Statistics of the United States Department of Labor or a successor agency of the United States government.
(2) For purposes of paragraph (1), the total pounds of plastic used shall equal the sum of the amount of virgin plastic and postconsumer thermoform recycled plastic used by the producer, as reported pursuant to Section 42377.
(e) (1) The department may conduct audits and investigations and take an enforcement action against a producer for the purpose of ensuring compliance with this section and the information reported pursuant to Section 42377. The department may take an enforcement action against a producer that fails to pay or underpays the assessed or audited administrative penalty only after notice and hearing in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
(2) The department shall keep confidential all business trade secrets and proprietary information about manufacturing processes and equipment that the department gathers or becomes aware of through the course of conducting audits or investigations pursuant to paragraph (1). Business trade secrets and proprietary information obtained pursuant to this subdivision that meet the definition in Section 3426.1 of the Civil Code are exempt from disclosure as otherwise required pursuant to the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) consistent with subdivision (k) of Section 6254 of the Government Code.
(3) A producer may obtain a copy of the department’s audit of that producer conducted pursuant to paragraph (1).
(f) (1) The department shall consider granting a reduction of the administrative penalties assessed pursuant to subdivision (c) for the purpose of meeting the minimum postconsumer thermoform recycled plastic requirements pursuant to subdivision (a).
(2) In determining whether to grant the reduction pursuant to paragraph (1), the department shall consider, at a minimum, all of the following factors:
(A) Anomalous market conditions.
(B) Disruption in, or lack of supply of, recycled plastic due to an unforeseen circumstance or event, such as a natural disaster.
(C) Other factors that have prevented a producer from meeting the requirements.
(D) If the recycling rate is 60 percent or higher, lack of available supply due to purchases from industries outside of the packaging industry.
(3) In order to receive a reduction of the administrative penalty, a producer shall submit to the department a corrective action plan detailing the reasons why the producer will fail to meet or has failed to meet the minimum postconsumer thermoform recycled plastic requirement and the steps the producer will take to comply with the minimum postconsumer thermoform recycled plastic requirement within the next reporting year. The department may approve the corrective action plan, and may reduce the administrative penalties once it approves the corrective action plan and the producer implements the plan. Administrative penalties shall accrue from the point of noncompliance with the minimum postconsumer thermoform recycled plastic requirement if the department disapproves the corrective action plan or if the producer fails to implement the plan.
(4) A corrective action plan issued by the department shall include a compliance deadline not to exceed 24 months from the date of the original notice of violation and shall include a description of each action the producer shall take to remedy the violation and the applicable compliance deadline for each action. The corrective action plan shall describe the penalties that may be imposed if a producer fails to comply.
(g) Administrative penalties collected pursuant to this section shall be deposited into the Thermoform Recycling Enhancement Penalty Account, which is hereby created in the State Treasury. Moneys in the Thermoform Recycling Enhancement Penalty Account shall be expended upon appropriation by the Legislature in the annual Budget Act for the sole purpose of supporting the recycling, collection, and processing infrastructure of thermoform plastic containers in the state.

42377.
 (a) On or before March 1 of each year, a producer shall report to the department the amount in pounds and by resin type of virgin plastic and postconsumer thermoform recycled plastic used to manufacture the thermoform plastic containers sold or offered for sale in the state in the previous calendar year. The producer shall submit this information to the department under penalty of perjury pursuant to standardized forms in the form and manner prescribed by the department.
(b) The department shall post the information reported pursuant to subdivision (a) within 30 days on the department’s internet website.

42378.
 (a) An importer or manufacturer of a thermoform plastic container who first sells the container in or into the state shall meet all of the following requirements if the importer’s or manufacturer’s annual total sales exceed 100,000 pounds of thermoform plastic containers for all resin types except expanded polystyrene, or 5,000 pounds of expanded polystyrene equivalent, in any calendar year:
(1) Register and pay a registration fee to the department for the reasonable regulatory costs that are directly related to implementing and enforcing this chapter in relation to the importer’s or manufacturer’s activities described in this chapter.
(2) Report to the department thermoform plastic container sales annually by March 1 for sales in the preceding calendar year.
(3) Report to the department the amounts of all thermoform plastic containers sold in or imported into the state as follows:
(A) The amounts in pounds of containers imported into or sold in the state.
(B) The resin type of the containers and the amount in pounds and types of postconsumer resin, if any, in those containers.
(C) The information in subparagraphs (A) and (B) individually for each purchaser.
(4) Maintain records of all sales and information regarding the source of any postconsumer resin for verification purposes as required by the department.
(b) An entity that purchases in the state more than 100,000 pounds of thermoform plastic containers for all resin types except expanded polystyrene, or 5,000 pounds of expanded polystyrene equivalent, in any calendar year, shall meet both of following requirements:
(1) The total thermoform plastic container purchases in a calendar year shall meet either of the following:
(A) Have an average postconsumer content that meets or exceeds the minimum content requirements in Section 42376.
(B) Demonstrate with proof of export documentation that the average postconsumer content of thermoform plastic containers purchased in the calendar year that were not exported out of the state have an average postconsumer content that meets or exceeds the minimum content requirements in Section 42376.
(2) Maintain records of purchases as required by the department.
(c) An entity that exports from the state more than 100,000 pounds of thermoform plastic containers for all resin types except expanded polystyrene containers, or 5,000 pounds of expanded polystyrene equivalent, in any calendar year, shall report to the department the total pounds of thermoform plastic containers exported by resin type.

42379.
 (a) Except as provided in subdivision (c), neither of the following is a violation of the statutes specified in subdivision (b):
(1) An action pursuant to this chapter solely to increase the collection, processing, and recycling of scrap plastic materials by a producer that affects scrap values, the quantities of materials being recycled, or the method of invoicing the sale of thermoform plastic containers.
(2) The formation of a nonprofit organization that may include two or more producers and that establishes specifications for different grades or classifications of thermoform plastics, which may affect the scrap value of those grades or classifications, the quantity or quality of materials being recycled, or the method of invoicing the sale of thermoform plastic containers, but does not establish the value of such materials.
(b) The following statutes are not violated by an action specified in subdivision (a):
(1) The Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code).
(2) The Unfair Practices Act (Chapter 4 (commencing with Section 17000) of Part 2 of Division 7 of the Business and Professions Code).
(c) The exemptions in subdivision (a) from the statutes specified in subdivision (b) shall not apply to any agreement between two or more producers establishing or affecting the price of plastic materials, including, but not limited to, virgin plastic, postconsumer recycled plastic, and thermoform plastic products, or the output or production of thermoform plastic products, or any agreement restricting the geographic area or customers to which thermoform plastic products will be sold.

SEC. 5.

 The Legislature finds and declares that Section 4 of this act, which adds Chapter 6.2 (commencing with Section 42375) to Part 3 of Division 30 of the Public Resources Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:
In order to appropriately protect the trade secrets and other proprietary materials of businesses, it is necessary to limit access to the proprietary information of businesses complying with the postconsumer recycled plastic requirements for thermoform plastic containers.

SEC. 6.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.