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SB-289 Recycling: batteries and battery-embedded products.(2021-2022)

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Date Published: 04/13/2021 09:00 PM
SB289:v96#DOCUMENT

Amended  IN  Senate  April 13, 2021
Amended  IN  Senate  April 05, 2021
Amended  IN  Senate  March 07, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 289

Introduced by Senator Newman
(Principal coauthors: Assembly Members Berman and Mullin)
(Coauthor: Senator Becker)

February 01, 2021

An act to add Article 5 (commencing with Section 42457) to Chapter 8.4 and Article 7 (commencing with Section 42499.5) to Chapter 8.6 of, to add Chapter 7.5 (commencing with Section 42420) to, and to repeal Chapter 8.4 (commencing with Section 42451) and Chapter 8.6 (commencing with Section 42490) of, Part 3 of Division 30 of the Public Resources Code, relating to recycling.


LEGISLATIVE COUNSEL'S DIGEST


SB 289, as amended, Newman. Recycling: batteries and battery-embedded products.
The Rechargeable Battery Recycling Act of 2006 requires every retailer, as defined, to have in place a system for the acceptance and collection of used rechargeable batteries for reuse, recycling, or proper disposal. The act requires the system for the acceptance and collection of used rechargeable batteries to include, at a minimum, specified elements, including, among others, the take-back at no cost to the consumer of a used rechargeable battery of the type or brand that the retailer sold or previously sold.
The Cell Phone Recycling Act of 2004 prohibits the sale of a cell phone in this state to a consumer unless the retailer of that cell phone has in place a take-back system for the acceptance and collection of used cell phones for reuse, recycling, or proper disposal.
This bill would make the Rechargeable Battery Recycling Act of 2006 and the Cell Phone Recycling Act of 2004 inoperative as of June 30, 2025, and would repeal those acts as of January 1, 2026. The bill would enact the Battery and Battery-Embedded Product Recycling and Fire Risk Reduction Act of 2021, which would require producers, as defined, either individually or through the creation of one or more stewardship organizations, to establish a stewardship program for batteries and battery-embedded products. The bill would require a stewardship organization or producer, on or before June 30, 2024, 2025, to submit to the Department of Resources Recycling and Recovery a stewardship plan for the collection, transportation, and recycling, and the safe and proper management, of batteries or battery-embedded products in the state. The bill would require the plan to include specified elements, including consultation with an advisory body, which the bill would require the department to create, a collection system for batteries and battery-embedded products with a specified minimum distribution of collection sites, and a funding mechanism to provide sufficient funding for implementation of the plan. The bill would provide for review and approval of the stewardship plan by the department and any other state agency with relevant jurisdiction and would require the stewardship organization or producer to fully implement its stewardship program on or before June 30, 2025. 2026.
The bill would require a stewardship organization or producer to annually be audited and submit a report and budget to the department, as prescribed, and would require a stewardship organization, producer, manufacturer, distributor, retailer, importer, recycler, or collection site to, among other things, provide the department with relevant records necessary to determine compliance with the bill. The bill would require reports and records provided to the department pursuant to the bill to be provided under penalty of perjury, thereby creating a state-mandated local program by expanding the crime of perjury. The bill would restrict public access to certain information collected for the purpose of administering a stewardship program.
The bill would require the department, on or before July 1, 2025, 2026, and each year thereafter, to post on its internet website a list of producers, brands, and batteries and battery-embedded products that are in compliance with the bill. The bill would prohibit a retailer or distributor from selling, distributing, offering for sale, or importing a battery or battery-embedded product in or into the state unless the producer of the battery or battery-embedded product is listed as in compliance on that list for that brand and battery or battery-embedded product, except as specified.
The bill would require a stewardship organization or producer to quarterly reimburse the department and any other relevant state agency for their respective reasonable regulatory costs that are directly related to implementing and enforcing the bill in relation to the stewardship organization’s or producer’s activities. The bill would require the department and each state agency to deposit those moneys into the Battery and Battery-Embedded Product Recycling Fund, which the bill would establish, and would authorize the department and any other relevant state agency to expend those moneys, upon appropriation by the Legislature, to administer and enforce the stewardship program.
The bill would provide for enforcement of its provisions, including authorizing the department to impose an administrative civil penalty on a stewardship organization, producer, manufacturer, distributor, retailer, importer, recycler, or collection site in violation of the bill not to exceed $10,000 per day, unless the violation is intentional, knowing, or reckless, then in that case not to exceed $50,000 per day. The bill would require the department to deposit those moneys into the Battery and Battery-Embedded Product Recycling Penalty Account, which the bill would establish in the fund, and would require the department to expend those moneys, upon appropriation by the Legislature, to administer and enforce the stewardship program. The bill would require the department, by January 1, 2023, 2024, and in consultation with the Department of Toxic Substances Control, to adopt regulations to implement the bill.
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.
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.

 Chapter 7.5 (commencing with Section 42420) is added to Part 3 of Division 30 of the Public Resources Code, to read:
CHAPTER  7.5. Battery and Battery-Embedded Product Recycling and Fire Risk Reduction Act of 2021
Article  1. General Provisions

42420.
 This chapter shall be known, and may be cited, as the Battery and Battery-Embedded Product Recycling and Fire Risk Reduction Act of 2021.

42420.2.
 (a) The Legislature finds and declares both of the following:
(1) In order to reduce incidents of fires and illegal dumping, increase recycling, and substantially reduce public agency costs for the end-of-life management of discarded batteries and battery-embedded products, the Battery and Battery-Embedded Product Recycling and Fire Risk Reduction Act of 2021 is hereby established to require producers of batteries and battery-embedded products offered for sale or sold in this state to develop, finance, and implement a convenient and cost-effective stewardship program to recover and recycle batteries and battery-embedded products.
(2) In order to promote a circular economy, all batteries and battery-embedded products should enter a recycling process at end of life, and the incorporation of the resulting material residuals into new products should be pursued to the extent that it is economically and technically feasible.
(b) Both of the following are the intent of the Legislature in enacting this chapter:
(1) That consumers have the opportunity to drop off their waste batteries and battery-embedded products free of charge, and that the program established by this chapter leverages existing local infrastructure.
(2) To prioritize the use of in-state processing facilities over the use of out-of-state processing facilities to the extent economically practical.

42420.4.
 For purposes of this chapter, the following definitions apply:
(a) “Annual report” means the annual report required pursuant to Section 42424.2.
(b) (1) “Battery” means a device consisting of one or more electrically connected electrochemical cells that is designed to receive, store, and deliver electric energy. A battery includes an intact, unbroken battery from which the electrolyte has been removed.
(2) A battery does not include any of the following:
(A) A lead-acid battery.
(B) A battery contained in a motor vehicle. Notwithstanding any other law, this exclusion does not apply to a battery contained in any of the following:
(i) A motorized scooter.
(ii) A motorized skateboard.
(iii) A motorized hoverboard.
(iv) A device intended to propel or move upon a highway only one individual person or property.
(C) An industrial battery, as defined by the department.
(c) “Battery pack” means a set of batteries that are connected together or encapsulated within an outer casing to form a complete unit that the consumer is not intended to split up or open.
(d) “Battery-embedded product” means a product containing a battery or battery pack that is not designed to be removed from the product by the consumer. Battery-embedded product does not include any of the following:
(1) A Class III medical device, as specified in Section 360c of Title 21 of the United States Code.
(2) A Class II medical device, as specified in Section 360c of Title 21 of the United States Code, that is not exempt from Section 360k of Title 21 of the United States Code.
(3) A covered electronic device, as defined in subdivision (e) of Section 42463.
(4) An energy storage system, as defined in Section 2835 of the Public Utilities Code.
(e) “Collection site” means a permanent or temporary location at which batteries or battery-embedded products are collected and prepared for transport in accordance with the requirements of this chapter.
(f) “Consumer” means an owner of a battery or battery-embedded product, including a person, business, corporation, limited partnership, nonprofit organization, or governmental entity, and includes the ultimate purchaser, owner, or lessee of a battery or battery-embedded product.
(g) “Distributor” means a company that has a contractual relationship with one or more producers to market and sell batteries or battery-embedded products to retailers.
(h) “Electrochemical cell” means a system consisting of an anode, a cathode, and an electrolyte, plus electrical or mechanical connections needed to allow the cell to deliver or receive electric energy.
(i) “Importer” means a person qualifying as an importer of record for purposes of Section 1484(a)(2)(B) of Title 19 of the United States Code with regard to the import of a battery or battery-embedded product sold in or into the state that was manufactured or assembled by a company outside the United States. Importer includes a person importing a battery or battery-embedded product sold in or into the state that was manufactured or assembled by a company outside the state.
(j) “Lead-acid battery” has the same meaning as defined in Section 42440.
(k) “Material recovery rate” means the ratio of the weight of a specific material recovered from batteries received by a battery recycler to the original weight of that material in the batteries received by the battery recycler.
(l) “Motor vehicle” has the same meaning as defined in Section 415 of the Vehicle Code.
(m) (1) “Performance goal” means a metric proposed in a stewardship plan to measure, on an annual basis, the performance of that plan, taking into consideration technical feasibility and economic practicality, in achieving a collection rate determined by the department. “Performance goal” includes annual target collection rates, material recovery rates, target recycling efficiencies by recycling process, and goals for public awareness, convenience, and accessibility.
(2) Using the most current science, monitoring, collection technology, data collection, and other best management practices, the department shall develop a performance goal that maximizes the diversion of batteries from the waste stream and that minimizes health and safety concerns.
(n) (1) (A) “Producer” means the person who manufactures the battery or battery-embedded product and who sells, offers for sale, or distributes the battery or battery-embedded product in or into the state.
(B) If there is no person who is the producer of the battery or battery-embedded product for purposes of subparagraph (A), the producer of the battery or battery-embedded product is the person who imports the battery or battery-embedded product in or into the state for sale or distribution.
(C) If there is no person who is the producer for purposes of subparagraphs (A) and (B), the producer is the person who sells the battery or battery-embedded product in or into the state.
(2) A producer does not include a person who annually sells, offers for sale, distributes, or imports in or into the state batteries or battery-embedded products with a total annual retail value of less than ____ dollars ($____) or ____ units.
(o) “Recycler” includes both of the following:
(1) A person who engages in the manual or mechanical separation of batteries or battery-embedded products to recover components and commodities contained in the batteries or battery-embedded products for the purpose of recycling.
(2) A person who changes the physical or chemical composition of batteries or battery-embedded products, in accordance with the requirements of Chapter 6.5 (commencing with Section 25100) of Division 20 of the Health and Safety Code and the regulations adopted pursuant to that chapter, by deconstructing, reducing the size, crushing, cutting, sawing, compacting, shredding, or refining for purposes of segregating and recovering or recycling components, and who arranges for the transport of those components to an end user.
(p) “Recycling” means using, reusing, or reclaiming a recyclable material.
(q) “Recycling efficiency rate” means the ratio of the weight of resources recovered from batteries received by a battery recycler to the weight of batteries received by the battery recycler.
(r) “Retailer” means a person who sells batteries or battery-embedded products in or into the state to a person through any means, including, but not limited to, sales outlets, catalogs, the telephone, the internet, or any electronic means. Retailer does not include a person selling batteries or battery-embedded products with a total annual retail value of less than ____ dollars ($____) or ____ units.
(s) “Sale” or “sell” means the transfer of title of batteries or battery-embedded products for consideration, including by a manufacturer, a distributor, or a retailer, for eventual consumption to a consumer in the state. “Sale” or “sell” includes both of the following:
(1) Remote sales conducted through sales outlets, catalogs, the internet, or any electronic means.
(2) A long-term lease of not less than 12 months.
(t) “Stewardship organization” means an organization exempt from taxation under Section 501(c)(3) of the federal Internal Revenue Code of 1986 (26 U.S.C. Sec. 501(c)(3)) that is established by a group of producers in accordance with Section 42421 to develop, implement, and administer a stewardship program.
(u) “Stewardship plan” or “plan” means the plan for the collection, transportation, and recycling, and the safe and proper management, of batteries or battery-embedded products that is developed by a stewardship organization or producer pursuant to this chapter.
(v) “Stewardship program” means a program established by a producer or stewardship organization for the free and convenient collection, transportation, and recycling, and the safe and proper management, of batteries or battery-embedded products pursuant to a stewardship plan approved by the department.

Article  2. Producers and Stewardship Organizations for Batteries and Battery-Embedded Products

42421.
 (a) Producers may establish one or more stewardship organizations composed of producers to develop, implement, and administer the battery and battery-embedded product recycling program established pursuant to this chapter.
(b) (1) A producer shall comply with this chapter either individually or through a stewardship organization established pursuant to subdivision (a).
(2) A producer shall not sell, distribute, offer for sale, or import a battery or battery-embedded product in or into this state unless the producer is in compliance with this chapter.
(c) Each producer covered under a stewardship organization shall register with that stewardship organization.
(d) To obtain a determination that a person is not a producer under this chapter, the person shall request an exemption through the form and manner determined by the department and provide the necessary data required for the department to make this determination.

Article  3. Stewardship Plan for Batteries and Battery-Embedded Products

42422.
 No later than April 1, 2022, a producer shall register with the department and shall provide to the department a list of batteries or battery-embedded products that it sells or offers for sale in the state to the department. state.

42422.1.
 On or before June 30, 2024, 2025, a producer, or a stewardship organization on behalf of a group of producers, shall develop and submit to the department a stewardship plan for the collection, transportation, and recycling, and the safe and proper management, of batteries or battery-embedded products in the state in an economically efficient and practical manner. The stewardship plan shall include all of the following goals and elements:
(a) The names of producers, distributors, importers, brands, and batteries and battery-embedded products covered under the stewardship plan.
(b) A consultation process with the advisory body created pursuant to subdivision (b) of Section 42422.4 to receive advice on the development and implementation of the plan.
(c) A free and convenient collection system for batteries or battery-embedded products that achieves a collection rate determined by the department. The system shall include all of the following:
(1) (A) A minimum distribution of collection sites to be achieved collectively statewide to appropriately serve the population distribution in a county, with no fewer than five collection sites per county and no fewer than one collection site per population of 10,000.
(B) The department may adjust the minimum required collection sites to ensure that consumers have sufficient convenient access to collection sites.
(2) A reasonable geographic spread of collection sites, including an explanation of the distribution.
(3) A retailer, where feasible, shall serve as an authorized collector as part of a stewardship program in the county in which it is located. If the minimum thresholds described in paragraphs (1) and (2) are not met in each county in which a retail chain has store locations, the retail chain shall have at least one location or ____ percent of its store locations, whichever is greater, in that county serve as authorized collectors in a stewardship program.
(4) (A) A producer or stewardship organization shall include as a collection site under its stewardship program any entity that offers in writing to participate in the stewardship program in return for reasonable compensation to the entity pursuant to paragraphs (5) and (6), even if the minimum thresholds described in paragraphs (1) and (2) have been achieved.
(B) A producer or stewardship organization shall include the offering entity as a collection site in the program within 90 days of receiving the written offer to participate. The producer or stewardship organization shall not be required to respond to offers pursuant to this paragraph until its stewardship plan has been approved by the department.
(5) A producer or stewardship organization shall allow a consumer to drop off, at no charge, batteries or battery-embedded products at a collection site and shall provide for the payment to a collection site that accepts batteries or battery-embedded products in an amount determined by the collection site and producer or stewardship organization that is reasonable for accepting, handling, collecting, storing, and transporting batteries or battery-embedded products.
(6) A producer or stewardship organization shall reimburse collection sites for all actual costs of collection and compliant management of batteries and battery-embedded products related to collection sites providing free battery and battery-embedded product dropoff services to consumers, including equipment, training, storage and floor space costs, signage, certifications and safety inspections, education materials and programs, personnel, or other costs associated with implementing this section.
(7) A producer or stewardship organization may suspend or terminate a collection site or service that does not adhere to the collection site criteria in an approved plan.
(8) A collection site shall be staffed and operated to ensure that batteries or battery-embedded products are safely collected and handled.
(d) (1) The establishment and administration of a means for fully funding the stewardship program in a manner that equitably distributes the stewardship program’s costs.
(2) The funding mechanism shall provide sufficient funding for the producer or stewardship organization to implement the plan, including the administrative, operational, and capital costs of the plan and the department’s and any other relevant state agency’s administrative costs pursuant to Section 42423.4.
(e) (1) A description of how batteries and battery-embedded products will not be landfilled and how all discarded batteries and battery-embedded products will enter a recycling process.
(2) A description of how discarded battery residual materials and battery-embedded product residual materials will be, to the extent economically and technically feasible, recycled.
(f) A program performance measurement to collect program data for the purpose of the annual report, which shall include all of the following:
(1) Data and the method of analysis necessary for demonstrating how the stewardship program’s performance goals will be achieved and measured.
(2) A methodology for all of the following:
(A) Determining the amount of batteries or battery-embedded products sold in the state by the stewardship organization or producer operating the stewardship program.
(B) Determining the amount of discarded batteries or battery-embedded products available for collection in the state by the stewardship organization or producer operating the stewardship program.
(C) Quantifying the number of batteries or battery-embedded products collected and recycled in the state by the stewardship organization or producer operating the stewardship program.
(3) A methodology for determining the amount of batteries or battery-embedded products sold in the state by each producer registered with the stewardship organization, if applicable.
(g) Coordination with, and a description of methods used to coordinate activities with, all of the following, with regard to the proper management or recycling of discarded batteries or battery-embedded products, for purposes of providing the efficient delivery of services and avoiding unnecessary duplication of effort and expense:
(1) Other stewardship programs.
(2) Existing battery or battery-embedded product collection and recycling programs, including electronic waste recyclers and dismantlers.
(3) Other relevant parties, as appropriate.
(h) Entering into contracts or agreements, which may include contracts and agreements with existing nonprofit or for-profit recyclers, that are necessary and proper for the stewardship organization or producer to carry out its duties in accordance with this chapter.
(i) Developing strategies, in consultation with the California Environmental Protection Agency’s Environmental Justice Task Force and other relevant parties, for collecting batteries or battery-embedded products for recycling in areas and communities that face unique challenges associated with proper waste management, such as poverty, language barriers, and illegal disposal.
(j) Providing outreach and education programs to consumers, manufacturers, distributors, and retailers to promote the collection and recycling of batteries or battery-embedded products and options available to consumers for the free collection of batteries or battery-embedded products. The programs shall maximize the goals to remove batteries from the waste stream, keep facilities safe, and improve the recycling market. Consumer-facing programs shall support all Californian communities, and may deploy community-based organizations to support regions with low rates of recycling.
(k) Goals for public awareness, including the implementation of annual consumer awareness studies.
(l) Developing strategies in coordination with other stewardship programs on proper labeling of batteries to ensure proper collection and recycling, including, but not limited to, a uniform color, design, and labeling scheme for batteries.
(m) A contingency plan in the event the stewardship plan expires, is disapproved, or is revoked. The contingency plan shall describe how the plan objectives can be carried out in the absence of a plan, either by the stewardship organization or producer, or through an entity such as an escrow company.
(n) Any other information requested by the department that is reasonably related to compliance with the plan and that the producer or stewardship organization can reasonably compile.

42422.2.
 (a) During the 2027 calendar year, and at least once every five years thereafter, a producer or stewardship organization shall review the stewardship plan and determine whether revisions to the plan are necessary.
(b) If a producer or stewardship organization determines revisions to the plan are necessary, it shall submit a revised plan, subject to the approval process in Section 42422.6.
(c) If a producer or stewardship organization determines that no revisions to the plan are necessary, it shall send a letter to the department explaining that the producer or stewardship organization has reviewed the plan and determined no revisions are needed. The department may disapprove the producer’s or stewardship organization’s determination within 30 days of that determination if the department concludes that the producer or organization cannot implement the objectives of this chapter without revising the plan.

42422.4.
 (a) In preparing the stewardship plan pursuant to Section 42422.1, and any updates to the plan pursuant to Section 42422.2, the producer or stewardship organization shall consult with interested stakeholders, which shall include, but not be limited to, local government representatives, recyclers, retailers, distributors, household hazardous waste industry representatives, and solid waste industry representatives.
(b) (1) The department shall create an advisory body for battery and battery-embedded product stewardship that includes, but is not limited to, representatives from local governments, recyclers, retailers, the household hazardous waste industry, nongovernmental organizations, environmental organizations, community-based justice and public health organizations, consumer advocates, and the solid waste industry.
(2) Participation on the advisory body shall be voluntary.
(3) The advisory body is not a state body for purposes of Section 11121 of the Government Code.

42422.6.
 (a) (1) At least 90 days before submitting a stewardship plan to the department, a producer or stewardship organization shall submit its proposed stewardship plan to any applicable state agencies with areas of authority relative to the stewardship plan.
(2) A state agency that receives a plan shall review the plan for compliance with state and federal laws and regulations related to the agency’s respective authority. The agency shall determine compliance or noncompliance with those laws and regulations and provide to the producer or stewardship organization that determination and an explanation for any finding of noncompliance, within 90 days of receipt of the plan.
(3) A producer or stewardship organization may submit an updated proposed plan to a state agency that issued a determination of noncompliance to attempt to obtain a determination of compliance. A producer or stewardship organization shall submit any determination received from an agency when it submits its stewardship plan to the department.
(4) If, 90 days after submitting a plan to a state agency, a producer or stewardship organization has not received a response from the state agency, the producer or stewardship organization may submit a certification to the department that the stewardship plan is consistent with all other applicable laws and regulations.
(b) The department may consult with, or submit a stewardship plan for review to, another state agency it determines is necessary to determine the completeness of the stewardship plan or for making a determination on the approval of the stewardship plan or an amendment to the stewardship plan. The duration of time that the department takes to review a stewardship plan pursuant to this subdivision shall not count toward the 90-day time limit specified in subdivision (c).
(c) The department shall review the stewardship plan for compliance with this chapter and shall approve, disapprove, or conditionally approve the plan within 90 days of receipt of the plan.
(d) If the department disapproves the plan pursuant to subdivision (c), the department shall explain, in writing, how the plan does not comply with this chapter, and the producer or stewardship organization shall resubmit a plan to the department. If the department finds that the plan resubmitted by the producer or stewardship organization does not comply with the requirements of this chapter, the producer or stewardship organization shall not be deemed in compliance with this chapter until the producer or stewardship organization submits a plan that the department finds complies with the requirements of this chapter.
(e) On or before December 31, 2024, 2025, a producer or stewardship organization on behalf of a group of producers shall have a complete stewardship plan approved by the department.
(f) The approved plan shall be a public record, except that financial, production, or sales data reported to the department by the producer or stewardship organization is not a public record for purposes of the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) and shall not be open to public inspection. The department may release financial, production, or sales data in summary form only so the information cannot be attributable to a specific producer or distributor or to any other entity.

42422.8.
 (a) On or before June 30, 2025, 2026, a producer or stewardship organization shall fully implement its stewardship program.
(b) All handling, collection, and transport of batteries or battery-embedded products undertaken as part of a stewardship program under this chapter shall comply with all applicable state and federal laws.

Article  4. Financial Provisions

42423.
 (a) On or before June 30, 2024, 2025, and on or before June 30 of each year thereafter, a stewardship organization or producer shall prepare and submit to the department a proposed stewardship program budget for the next five calendar years that includes all of the following:
(1) Anticipated revenues and costs of implementing the stewardship program, including related programs, projects, contracts, and administrative expenses. Administrative expenses shall include the department’s and other state agencies’ reasonable regulatory costs pursuant to Sections 42422.6 and 42423.4. For purposes of this paragraph, stewardship program implementation begins once the department approves a stewardship organization’s or producer’s stewardship plan.
(2) A recommended funding level sufficient to cover the plan’s budgeted costs and to operate the stewardship program in a prudent and responsible manner over a multiyear period. For purposes of this paragraph, stewardship program operation begins once the department approves a stewardship organization’s or producer’s stewardship plan.
(3) Any additional information that the department deems necessary to determine whether the budget meets the requirements of this chapter.
(b) A producer or stewardship organization shall not expend revenue from the stewardship program for either of the following purposes:
(1) To pay an administrative civil penalty pursuant to Section 42425.2.
(2) To pay costs associated with litigation between the producer or organization and the state.

42423.2.
 (a) Within 90 days of receipt, the department shall conditionally approve, approve, or disapprove a stewardship program budget. If the department fails to act or does not disapprove a final stewardship program budget, the budget shall be deemed approved.
(b) (1) If the department conditionally approves or disapproves the budget, the stewardship organization or producer shall resubmit a revised budget addressing the department’s written reasons for the department’s decision within 30 days of the conditional approval or disapproval.
(2) The department, within 60 days from the date the stewardship organization or producer resubmits a revised budget, shall approve or disapprove a final stewardship program budget. If the department fails to act or does not disapprove a final stewardship program budget within those 60 days, the budget shall be deemed approved.
(c) If the department disapproves a revised budget submitted pursuant to paragraph (1) of subdivision (b), the producer or stewardship organization may submit only one additional revised budget, subject to review in accordance with paragraph (2) of subdivision (b).
(d) Until a budget has been approved or deemed approved pursuant to this section, a stewardship organization or producer shall make expenditures consistent with the most recent approved budget until a new budget has been approved or deemed approved by the department.

42423.4.
 (a) The department and state agencies with jurisdiction relevant to this chapter shall notify each stewardship organization, and each producer that is not part of a stewardship organization, of their respective reasonable regulatory costs that are directly related to implementing and enforcing this chapter in relation to the stewardship organization’s or producer’s activities. This may include the direct costs associated with regulatory development before submission of the stewardship plan pursuant to Section 42422.1.
(b) On or before August 31, 2024, 2025, and once every three months thereafter, producers and stewardship organizations shall reimburse the department and any other state agency for incurred costs as described in subdivision (a). The reimbursement shall not exceed the department’s or other state agency’s full reasonable regulatory costs to implement and enforce this chapter.
(c) The department and each state agency with jurisdiction relevant to this chapter shall deposit all moneys submitted for reimbursement costs by a stewardship organization or producer pursuant to this section into the Battery and Battery-Embedded Product Recycling Fund, which is hereby established in the State Treasury. Upon appropriation by the Legislature, moneys in the fund shall be expended by the department and any other state agency with jurisdiction relevant to this chapter to administer and enforce this chapter, as well as to reimburse any outstanding loans made from other funds used to finance startup costs of the department’s and any other state agency’s activities pursuant to this chapter. The moneys collected pursuant to this section shall not be expended for any other purpose.

42423.6.
 (a) A stewardship organization or producer operating a stewardship program shall not maintain total program reserves exceeding 60 percent of its annual operating expenses, consistent with the requirements of the Financial Accounting Standards Board’s Accounting Standards Update 2016-14, Not-for-Profit Entities (Topic 958), and any future updates to that standard.
(b) The department, in approving the annual stewardship program budget, may authorize the total reserves to be increased to up to 75 percent of the stewardship organization’s or producer’s annual operating expenses if the department determines the increase is necessary to implement the requirements of this chapter.
(c) If a stewardship organization’s or producer’s reserves exceed the amount specified in subdivision (a) or (b), the department may require the organization or producer to increase spending on implementing the requirements of this chapter.

Article  5. Records, Audits, and Reports for Batteries and Battery-Embedded Products

42424.
 (a) A stewardship organization or producer shall keep minutes, books, and records that clearly reflect the activities and transactions of the stewardship organization or producer.
(b) The accounting books of the stewardship organization or producer shall be audited at the stewardship organization’s or producer’s expense by an independent certified public accountant retained by the stewardship organization or producer at least once each calendar year, commencing with the 2024 calendar year.
(c) The stewardship organization or producer shall arrange for the audit to be delivered to the department with the annual report. The department shall review the audit for compliance with this chapter and consistency with the stewardship plan. The department shall notify the stewardship organization or producer of any compliance issues or inconsistencies.
(d) The department may conduct its own audit if it determines that an audit is necessary to enforce the requirements of this chapter and that the audit conducted pursuant to subdivision (b) is not adequate for this purpose. The stewardship organization or producer may obtain copies of the audit upon request.
(e) The department shall not disclose any confidential proprietary information in an audit conducted pursuant to this section.

42424.2.
 On or before June 30, 2024, 2025, and on or before June 30 of each year thereafter, a stewardship organization, or producer that is not part of a stewardship organization, shall submit to the department, in the form and manner determined by the department, and make publicly available on its internet website, an annual report that includes, for the preceding calendar year, all of the following:
(a) The stewardship organization’s or producer’s costs and revenues.
(b) The quantity of batteries and battery-embedded products sold in the state by the producers in the stewardship program and the discarded batteries or battery-embedded products collected for recycling in the stewardship program.
(c) A list of the stewardship program’s collection sites, by name, location, and type.
(d) The total weight of each battery chemistry type that was collected.
(e) A list of each battery recycling facility used by the stewardship program, by name and location.
(f) A list of each battery-embedded product recycling facility used by the stewardship program, by name and location.
(g) An updated list of the names and locations of producers, manufacturers, distributors, importers, brands, and batteries and battery-embedded products covered under the stewardship plan.
(h) The total weight of battery-embedded products recycled in the state during the preceding calendar year, including any conversion factor used to determine the number of battery-embedded products recovered.
(i) The recycling efficiency rate of each battery chemistry type that was recycled.
(j) The material recovery rate of each individual battery material.
(k) The total weight of residual materials from battery-embedded products.
(l) The uses for the recycled residual materials.
(m) The weight of residual materials that were not recycled, subject to paragraph (2) of subdivision (e) of Section 42422.1.
(n) A description of methods used to collect, transport, and process batteries or battery-embedded products, including any conversion factor used to determine the number of batteries or battery-embedded products recovered.
(o) A list of any contracts or agreements, which may include contracts and agreements with existing nonprofit or for-profit recyclers, that are necessary and proper for the stewardship organization or producer to carry out its duties under this chapter.
(p) A description of outreach efforts and education to consumers, manufacturers, distributors, and retailers for the purpose of promoting the collection and recycling of batteries or battery-embedded products.
(q) (1) A report on coordination activities with other stewardship programs, including coordinating existing battery or battery-embedded product collection and recycling programs, and with other relevant parties, as appropriate, with regard to the proper management or recycling of discarded batteries or battery-embedded products, for purposes of providing the efficient delivery of services and avoiding unnecessary duplication of effort and expense.
(2) A description of strategies in coordination with other stewardship programs on proper labeling of batteries to ensure proper collection and recycling.
(r) (1) Findings from an annual consumer awareness study and examples of educational materials that were provided to consumers in the first year of the stewardship program and any changes to those materials in subsequent years, as well as other mechanisms, including advertising of the program, to increase consumer awareness.
(2) A description of any consultation with the California Environmental Protection Agency’s Environmental Justice Task Force and other relevant parties for collecting batteries or battery-embedded products for recycling in areas and communities that face unique challenges.
(s) A demonstration of efforts to comply with collection goals established pursuant to Section 42422.1.
(t) (1) A report on activities the stewardship organization or producer has undertaken in relation to all of the following:
(A) Meeting performance goals.
(B) Making progress on meeting performance goals.
(C) Making progress on planned efforts to meet performance goals.
(2) Factors to be considered for paragraph (1) may include, but are not limited to, availability of take-back options and no-cost local curbside collections services, proximity to recyclers and no-cost collection points and events, and the state of current recycling technology.
(u) A report on activities, which the stewardship organization or producer shall undertake, to prioritize, to the extent economically practical, the use of in-state processing facilities over out-of-state processing facilities. If the stewardship organization or producer decides to use out-of-state processing facilities, the stewardship organization or producer shall provide an explanation of that decision.
(v) If the producer or stewardship organization determines during a particular year that any of the activities undertaken to implement subdivision (t) were unsuccessful, the stewardship organization or producer shall identify the problems with the current activities, and report on the new activities undertaken and progress made, in the following year’s annual report.
(w) A hard copy of, or an electronic reference to, any report completed by the stewardship organization or producer during the period covered by the annual report and a brief explanation of how the stewardship organization or producer anticipates the activities may benefit the stewardship program. The stewardship organization or producer shall make these reports publicly available free of charge. If the report contains trade secret or confidential information protected under existing law, the stewardship organization or producer shall only be required to provide a description of the information and its relevance to the stewardship program that omits any of the trade secret or confidential information.
(x) The progress toward attainment of the goals included in the stewardship organization’s or producer’s stewardship plan.
(y) Any modification or revision to the stewardship plan, including those required pursuant to Section 42422.2, which are subject to review under Section 42422.6, necessary to achieve the goals established pursuant to Section 42422.1.
(z) Any other information relevant to compliance with the approved stewardship plan.

42424.4.
 (a) No later than 90 days after the date the department receives the annual report, the department shall notify the stewardship organization or producer of any deficiencies in the annual report. No later than 60 days after receiving this notice from the department, the stewardship organization or producer shall provide additional information, modifications, or corrections in response to the department’s notification.
(b) Any proposed activities in the annual report shall be evaluated by the department for progress and shall be taken into consideration when approving, disapproving, or conditionally approving the report.
(c) Within 90 days of receipt of an annual report deemed complete, the department shall review the report for compliance with this chapter and shall approve, disapprove, or conditionally approve the annual report. If the department fails to act within 90 days of receipt of the report, the report shall be deemed approved.
(d) (1) If the department conditionally approves or disapproves the annual report, the stewardship organization or producer shall resubmit a revised annual report addressing the department’s written reasons for its decision within 30 days of the conditional approval or disapproval.
(2) The department, within 60 days from the date a stewardship organization or producer resubmits a revised annual report, shall approve or disapprove a final annual report. If the department fails to act or does not disapprove a final annual report within those 60 days, the annual report shall be deemed approved.
(e) If the department disapproves a revised annual report submitted pursuant to paragraph (1) of subdivision (d), the stewardship organization or producer may submit only one additional revised annual report, subject to review in accordance with paragraph (2) of subdivision (d).

Article  6. Enforcement

42425.
 (a) On or before July 1, 2025, 2026, and on or before July 1 of each year thereafter, the department shall post on its internet website a list of producers that are in compliance with this chapter. The department shall list, as appropriate, the reported brands and names of batteries and battery-embedded products for each producer.
(b) A producer that is not listed on the department’s internet website pursuant to this section that demonstrates compliance with this chapter before the next post is required pursuant to subdivision (a) may request a certification letter from the department stating that the producer, brand, or battery or battery-embedded product is in compliance. A producer that receives this letter shall be deemed listed as compliant on the department’s internet website.
(c) (1) A retailer or distributor shall monitor the department’s internet website to determine if a producer, brand, or battery or battery-embedded product is in compliance with this chapter for that brand or battery or battery-embedded product.
(2) A retailer or distributor shall not sell, distribute, offer for sale, or import a battery or battery-embedded product in or into the state unless the producer of the battery or battery-embedded product is listed as in compliance pursuant to subdivision (a) for that brand and battery or battery-embedded product.
(d) Notwithstanding subdivision (c), both of the following apply:
(1) A retailer or distributor may sell or distribute a battery or battery-embedded product if, on the date the retailer or distributor ordered or purchased the battery or battery-embedded product, or within 120 calendar days before or after that date, the producer, brand, or battery or battery-embedded product was listed as compliant on the department’s internet website.
(2) A retailer or distributor may, for any existing inventory in stock before the initial list was posted by the department pursuant to subdivision (a), sell or distribute that inventory.
(e) If the department determines a producer is not in compliance with this chapter, the department shall remove the producer, along with its brands and batteries or battery-embedded products, from the department’s internet website, as specified in subdivision (a). The producer shall not sell a battery or battery-embedded product in the state until the department determines the producer is in compliance with this chapter.

42425.2.
 (a) The department may impose an administrative civil penalty on a producer, stewardship organization, manufacturer, distributor, retailer, importer, recycler, or collection site that is in violation of this chapter. The amount of the administrative civil penalty shall not exceed ten thousand dollars ($10,000) per day, but, if the violation is intentional, knowing, or reckless, the department may impose an administrative civil penalty of not more than fifty thousand dollars ($50,000) per day.
(b) The department shall not impose a penalty pursuant to this section on a stewardship organization or producer operating a stewardship program for a failure to comply with this chapter if the organization or producer demonstrates it received false or misleading information from a member of the organization, as applicable, or other party that was the direct cause of its failure to comply.
(c) The department shall deposit all penalties collected pursuant to this section into the Battery and Battery-Embedded Product Recycling Penalty Account, which is hereby created in the Battery and Battery-Embedded Product Recycling Fund. Upon appropriation by the Legislature, moneys in the account shall be expended by the department to administer and enforce this chapter.

42425.4.
 (a) Upon a written finding that a producer, stewardship organization, manufacturer, distributor, retailer, importer, recycler, or collection site has not met a material requirement of this chapter, in addition to any other penalties authorized under this chapter, the department may, after affording the entity a reasonable opportunity to respond to, or rebut, the finding, take any of the following actions to ensure compliance with the requirements of this chapter:
(1) Revoke the stewardship organization’s or producer’s stewardship plan approval or require the stewardship organization or producer to resubmit the plan.
(2) Remove the producer, along with its brands and batteries or battery-embedded products, from the department’s list of compliant producers, as specified in Section 42425.
(3) Impose additional reporting requirements relating to compliance with the material requirement identified by the department.
(b) If a stewardship plan is revoked pursuant to paragraph (1) of subdivision (a) or terminated by the stewardship organization or producer that submitted the plan, a producer no longer subject to that plan may, without being subject to administrative civil penalties pursuant to Section 42425.2, sell or offer for sale batteries or battery-embedded products in the state for a period of up to one year after the stewardship plan was terminated or was revoked if the producer continues to operate under the most recent approved stewardship plan to which the producer was subject.

42425.6.
 (a) A producer, stewardship organization, manufacturer, distributor, retailer, importer, recycler, or collection site shall do both of the following:
(1) Upon request, provide the department with reasonable and timely access, as determined by the department and as authorized pursuant to Title 13 (commencing with Section 1822.50) of Part 3 of the Code of Civil Procedure, to its facilities and operations, as necessary to determine compliance with this chapter.
(2) Upon request, provide the department with relevant records necessary to determine compliance with this chapter.
(b) The records required by this chapter shall be maintained and accessible for three years. All reports and records provided to the department pursuant to this chapter shall be provided under penalty of perjury.
(c) The department may take disciplinary action against a producer, stewardship organization, manufacturer, distributor, retailer, importer, recycler, or collection site that fails to provide the department with the access required pursuant to this section, including, but not limited to, imposing administrative civil penalties pursuant to Section 42425.2 and posting an immediate notice on the department’s internet website pursuant to Section 42425 that the producer, along with its brands and batteries or battery-embedded products, is no longer in compliance with this chapter.

42425.8.
 The department department, in consultation with the Department of Toxic Substances Control, shall adopt regulations for the implementation of this chapter by January 1, 2023. 2024.

Article  7. Antitrust Immunity

42426.
 (a) Except as provided in subdivision (c), an action specified in subdivision (b) that is taken by a stewardship organization or producer that relates to any of the following is not a violation of the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), the Unfair Practices Act (Chapter 4 (commencing with Section 17000) of Part 2 of Division 7 of the Business and Professions Code), or the Unfair Competition Law (Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code).
(b) Subdivision (a) applies to all of the following actions taken by a stewardship organization or producer:
(1) The creation, implementation, or management of a stewardship plan approved or conditionally approved by the department pursuant to Article 3 (commencing with Section 42422) and the determination of the types or quantities of batteries or battery-embedded products recycled or otherwise managed pursuant to a stewardship plan.
(2) The determination of the cost and structure of an approved stewardship plan.
(3) The establishment, administration, collection, or disbursement of a charge associated with funding the implementation of this chapter.
(c) Subdivision (a) does not apply to an agreement that does any of the following:
(1) Fixes a price of or for batteries or battery-embedded products, except for an agreement related to costs or charges associated with participation in a stewardship plan approved or conditionally approved by the department and otherwise in accordance with this chapter.
(2) Fixes the output or production of batteries or battery-embedded products.
(3) Restricts the geographic area in which, or customers to whom, batteries or battery-embedded products will be sold.

SEC. 2.

 Article 5 (commencing with Section 42457) is added to Chapter 8.4 of Part 3 of Division 30 of the Public Resources Code, to read:
Article  5. Repeal

42457.
 This chapter shall become inoperative on June 30, 2025, and, as of January 1, 2026, is repealed.

SEC. 3.

 Article 7 (commencing with Section 42499.5) is added to Chapter 8.6 of Part 3 of Division 30 of the Public Resources Code, to read:
Article  7. Repeal

42499.5.
 This chapter shall become inoperative on June 30, 2025, and, as of January 1, 2026, is repealed.

SEC. 4.

 The Legislature finds and declares that Section 1 of this act, which adds Chapter 7.5 (commencing with Section 42420) 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 ensure that the competitive market in the state for the manufacture and sale of batteries and battery-embedded products is not compromised, it is necessary that financial, production, and sales data and confidential proprietary information collected for the purpose of administering a stewardship program be confidential.

SEC. 5.

 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.