Bill Text: CA AB842 | 2021-2022 | Regular Session | Amended

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Bill Title: California Circular Economy and Plastic Pollution Reduction Act.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Failed) 2022-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB842 Detail]

Download: California-2021-AB842-Amended.html

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Amended  IN  Assembly  March 22, 2021

Amended  IN  Assembly  March 18, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 842

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Introduced by Assembly Members Cristina Garcia and Gray
(Principal coauthor: Senator Eggman)
(Coauthor: Assembly Member Bloom)

February 17, 2021

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An act to add Chapter 3 (commencing with Section 42040) to Part 3 of Division 30 of the Public Resources Code, relating to solid waste.

LEGISLATIVE COUNSEL'S DIGEST

AB 842, as amended, Cristina Garcia. California Circular Economy and Plastic Pollution Reduction Act.

(1) The California Integrated Waste Management Act of 1989, administered by the Department of Resources Recycling and Recovery, generally regulates the disposal, management, and recycling of solid waste, including, among other solid waste, single-use plastic straws.

The Sustainable Packaging for the State of California Act of 2018 prohibits a food service facility located in a state-owned facility, operating on or acting as a concessionaire on state property, or under contract to provide food service to a state agency from dispensing prepared food using a type of food service packaging unless the type of food service packaging is on a list that the department publishes and maintains on its internet website that contains types of approved food service packaging that are reusable, recyclable, or compostable.

Existing law makes a legislative declaration that it is the policy goal of the state that not less than 75% of solid waste generated be source reduced, recycled, or composted by 2020.

This bill would enact the California Circular Economy and Plastic Pollution Reduction Act, which would establish a comprehensive regulatory scheme for producers, retailers, and wholesalers of single-use packaging, as defined, and single-use products, as defined, made partially or entirely of plastic, to be administered by the department. The bill would require producers, as defined, within 6 months of the department’s adoption of regulations to implement the act, to individually individually, or to collectively form or join a stewardship organization to that will, develop, finance, and implement a convenient and cost-effective program to source reduce, recover, and recycle single-use packaging and single-use products discarded in the state, and develop and submit to the department a stewardship plan, annual report, and budget, as prescribed. The bill would require the stewardship plan to include funding to support, among other things, mechanisms necessary to achieve a 75% recycling rate of single-use packaging and single-use products by 2032 and annually thereafter. The bill would require, starting in 2023, 2025, a stewardship organization to charge and collect from its member producers a single-use packaging and single-use products fee of $0.01 for each single-use packaging and single-use product unit a member producer sells, offers for sale, distributes, or imports in or into the state. The bill would adjust the fee, starting in 2025, based on the member producers’ source reduction or increase in production compared to the member producers’ 2019 baseline of units of single-use packaging or single-use products. The funding for the purposes of paying the administrative and operational costs of the stewardship program. The bill would require, on or before the end of the 2022–23 fiscal year, and once every 3 months thereafter, a stewardship organization to pay to the department an administrative fee to cover the department’s full costs of administering and enforcing the act, not to exceed the department’s actual and reasonable regulatory costs.

This bill would authorize the department to impose an administrative civil penalty, except as specified, not to exceed $50,000 per day per violation on an entity that is not in compliance with the act’s requirements. The bill would require the department to deposit all those administrative civil penalties collected into the Circular Economy Penalty Account, which the bill would create. The bill would provide that the moneys in the account shall be available to the department, upon appropriation by the Legislature, for purposes that further the act.

This bill would require the department, no later than July 1, 2022, to post a list of packaging categories, as defined, and product categories, as defined, for single-use packaging and single-use products that are easily recyclable or easily compostable, hard to recycle or hard to compost, or nonrecyclable or noncompostable, and specifies the types of plastics to be included on the initial list posted by the department. The bill would require the department to develop criteria to determine if single-use packaging and single-use products are easily recyclable or easily compostable, hard to recycle or hard to compost, or nonrecyclable or noncompostable, as provided. The bill would, beginning January 1, 2023, require all single-use packaging and single-use products sold, offered for sale, distributed, or imported in or into the state to be easily recyclable or easily compostable in the state. The bill would, beginning January 1, 2035, require all single-use packaging and single-use products sold, offered for sale, distributed, or imported in or into the state to include 75 percent post-consumer 75% postconsumer recycled content. The bill would require the department, beginning in 2023, to impose an administrative civil penalty on producers per unit sold, offered for sale, imported, or distributed in or into the state of $0.01 for hard to recycle or hard to compost single-use packaging and single-use products, $0.02 for nonrecyclable or noncompostable single-use packaging and single-use products, and, additionally, beginning in 2035, of $0.01 for single-use packaging and single-use products that do not include 75% post-consumer postconsumer recycled content. The bill would require the department to deposit all those administrative civil penalties collected into the Single-Use Plastic Packaging and Products Penalty Account, which the bill would create. The bill would provide that the moneys in the account shall be available to the department department, upon appropriation by the Legislature, for projects with demonstrated environmental or environmental health benefits, and that prioritize projects within the state. The bill would impose on producers, among other requirements, registration, reporting reporting, and recordkeeping requirements. The bill would require reports and data provided by producers to the department to be accurate and attested to under penalty of perjury, thereby imposing a state-mandated local program by expanding the crime of perjury.

(2) 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.

(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.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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Bill Text

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

SECTION 1.

 Chapter 3 (commencing with Section 42040) is added to Part 3 of Division 30 of the Public Resources Code, to read:

CHAPTER  3. California Circular Economy and Plastic Pollution Reduction Act

Article  1. General Provisions

42040.

 This chapter shall be known, and may be cited, as the California Circular Economy and Plastic Pollution Reduction Act.

42041.

 The Legislature finds and declares all of the following:

(a) The California Circular Economy and Plastic Pollution Reduction Act establishes a program to substantially reduce the local, statewide, and global impacts of single-use packaging and single-use products.

(b) Under this program, producers of single-use packaging and single-use products are required to form implement a stewardship organization program to achieve source reduction, recycling, and reuse of these products, and to address the environmental impacts caused by these products.

(c) By requiring producers to achieve 75 percent source reduction, recycling, and reuse statewide, this program will spark investments in recycling infrastructure and create green jobs in the state.

(d) Products that are hard to recycle or nonrecyclable become litter, pollution, or landfill waste.

(e) In order to substantially reduce the local, statewide, and global impacts resulting from the generation and improper disposal of single-use packaging and single-use products and to achieve the 75 percent source reduction, recycling, and reuse goal pursuant to Section 41780.01, all single-use packaging and single-use products should be able to be recycled in the state.

(f) In addition, to support a circular economy, reduce the need for resource extraction, and ensure that there is a market for recycled material, all single-use packaging and single-use products should contain recycled content.

(g) All single-use packaging and single-use products sold, offered for sale, distributed, or imported in or into the state shall be easily recyclable in the state and use recycled content.

42042.

 (a) For purposes of this chapter, the following terms have the following definitions:

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

(2)

(1) (A) “Packaging” means any material made partially or entirely of plastic used for the containment, protection, handling, delivery, or presentation of goods by a producer for a user or consumer, ranging from raw materials to processed goods. “Packaging” includes, but is not limited to, all of the following:

(i) Sales packaging or primary packaging intended to provide the user or consumer with the individual serving or unit of the product.

(ii) Grouped packaging or secondary packaging intended to bundle, sell in bulk, brand, or display the product.

(iii) Transport packaging or tertiary packaging intended to protect the product during transport.

(iv) Non-de minimus packaging components and ancillary elements integrated into packaging, including ancillary elements directly hung or attached to a product that perform a packaging function, unless the elements are intended to be consumed or disposed of together.

(B) “Packaging” does not include glass packaging or rigid metal packaging, including, but not limited to, aluminum or steel cans, ends, enclosures, bottles, or cups.

(3)

(2) “Packaging category” means a single-use packaging material category on the list published by the department pursuant to Section 42065. 42067.

(3) “Producer” does not include a person that produces, harvests, and packages an agricultural commodity on the site where the agricultural commodity was grown or raised.

(4) “Product category” means a single-use product material category on the list published by the department pursuant to Section 42065. 42067.

(5)(A)“Producer” means a person who manufactures single-use packaging or a single-use product under that person’s own name or brand and who sells or offers for sale the single-use packaging or single-use product in the state.

(B)If there is no person in the state who is the producer for purposes of subparagraph (A) in the state, the producer is the person who imports the single-use packaging or single-use product as the owner or licensee of a trademark or brand under which the single-use packaging or single-use product is sold or distributed in the state.

(C)If there is no person in the state who is the producer for purposes of subparagraphs (A) and (B) in the state, the producer is the person or company that offers for sale, sells, or distributes the single-use packaging or single-use product in the state.

(D)Notwithstanding subparagraphs (A) to (C), inclusive, for

beer and malt beverages manufactured outside of the state, “producer” means the person named on the certificate of compliance issued pursuant to Section 23671 of the Business and Professions Code.

(E)

“Producer” does not include a person that produces, harvests, and packages an agricultural commodity on the site where the agricultural commodity was grown or raised.

(6)

(5) (A) “Retailer or wholesaler” means a person who sells single-use packaging, a product packaged in single-use packaging, or a single-use product in the state or offers to consumers the single-use packaging, product packaged in single-use packaging, or single-use product in the state through any means, including, but not limited to, any of the following:

(i) Remote offering, including sales outlets or catalogs.

(ii) Electronically through the internet.

(iii) Telephone.

(iv) Mail.

(B) “Retailer” or “wholesaler” does not include an online marketplace that meets all of the following:

(i) Is an online or mobile application that provides user services and facilitates sales solely from third-party sellers to third-party buyers.

(ii) Facilitates and permits direct, unhindered communication between the third-party buyer and the third-party seller.

(iii) Conspicuously displays the third-party seller’s location.

(iv) Does not own any of the inventory for sale on the online marketplace.

(v) Does not ship or control the distribution, packaging, or transport of any product on the online marketplace.

(vi) Does not determine the price for a product offered on the online marketplace.

(7)

(6) (A) “Single-use packaging” means the packaging of a product made partially or entirely of plastic and that meets both of the following:

(i) The packaging is routinely recycled, disposed of, or discarded after its contents have been used or unpackaged.

(ii) The packaging is typically not refilled by the producer.

(B) “Single-use packaging” does not include reusable packaging.

(8)

(7) “Single-use product” means single-use food service ware, including plates, bowls, cups, utensils, stirrers, and straws made partially or entirely of plastic.

(9)

(8) “Source reduction” or “source reduce” means the elimination of the creation of single-use packaging or single-use products, or a net reduction in the amount of single-use packaging or single-use products that are created and includes, but is not limited to, transitioning single-use packaging or single-use products to reusable packaging or reusable products. “Source reduction” and “source reduce” does not include replacing a recyclable or compostable material with a nonrecyclable or noncompostable material or a material that is less likely to be recycled or composted.

(9) “Stewardship organization” means a stewardship organization described in Section 42051 or a producer complying with the requirements of this chapter individually rather than as a member of a stewardship organization.

(10) “Supplemental local program” means a program with which a stewardship organization arranges for monthly or more frequent collection of single-use packaging material or single-use products covered under the stewardship organization’s stewardship plan from more than 30 percent of households located in a jurisdiction.

(11) “Unexpended funds” means money in a stewardship organization’s trust fund or escrow account that the stewardship organization is not already obligated to pay pursuant to a contract, claim, or similar mechanism. “Unexpended funds” excludes funds for purposes of reimbursing the department’s reasonable costs to administer and enforce this chapter pursuant to subdivision (c) of Section 42053. 42053.5.

(12) “Unit” means a plastic component of single-use packaging, or a single-use product, such as a cap, pouch, straw, lid, plastic film, or plastic wrapping.

(b) For purposes of this chapter, all of the following shall not be considered single-use packaging or single-use products:

(1) Medical products, and products defined as medical devices and prescription drugs, as specified in the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Secs. 321(g), 321(h), and 353(b)(1)).

(2) Drugs that are used for animal medicines, including, but not limited to, parasiticide products for animals.

(3) Infant formula, as defined in Section 321(z) of Title 21 of the United States Code.

(4) Medical food, as defined pursuant to Section 360ee(b)(3) of Title 21 of the United States Code.

(5) Fortified oral nutritional supplements used for persons who require supplemental or sole source nutrition to meet nutritional needs due to special dietary needs directly related to cancer, chronic kidney disease, diabetes, or other medical conditions as determined by the department.

(6) Packaging used for a product listed in paragraphs (1) to (5), inclusive.

(7) Packaging used to contain toxic or hazardous products regulated by the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sec. 136 et seq.).

(8) Plastic packaging containers that are manufactured for use in the shipment of hazardous materials and are prohibited from being manufactured with used material by federal packaging material specifications set forth in Section 178.509 and 178.522 of Title 49 of the Code of Federal Regulations.

(9) Beverage containers subject to the California Beverage Container Recycling and Litter Reduction Act (Division 12.1 (commencing with Section 14500)).

Article  2. Single-Use Plastic Packaging and Products Source Reduction and Recycling Stewardship Program

42050.

 (a) Producers of single-use packaging or single-use products shall do all of the following:

(1) No later than six months after the department adopts regulations to implement this chapter, develop, finance, and implement a convenient and cost-effective program to source reduce, recover, and recycle single-use packaging and single-use products discarded in the state, either individually or through a stewardship organization.

(2)Strive for the maximum feasible level of source reduction, recovery, and recycling of single-use packaging and single-use products, consistent with the policy goal established in Section 41780.01.

(2) Implement measures to achieve the policy goal for source reduction, reuse, and recycling established in Section 41780.01.

(3) Ensure that all single-use packaging or single-use products that are offered for sale, sold, distributed, or imported in or into the state are easily recyclable or easily compostable and are not hard to recycle or hard to compost or nonrecyclable or noncompostable as determined by the department pursuant to Section 42067. 42068.

(b) The department shall adopt regulations to implement this chapter. The department’s regulations shall include provisions necessary to implement all of the provisions of this chapter. chapter and shall include all of the provisions of this article.

42051.

 (a) In order to implement a Single-Use Plastic Packaging and Products Source Reduction and Recycling Stewardship Program, producers of single-use packaging and single-use products shall, no later than six months after the department adopts regulations to implement this chapter, form or join a stewardship organization or be individually subject to the requirements of this chapter.

(b) A stewardship organization or stewardship plan for single-use packaging or single-use products is not eligible for approval by the department unless until the department has adopted implementing regulations pursuant to this chapter. The regulations shall include all of the provisions of this article.

(c) The department may determine that an existing stewardship organization meets the requirements of this article for purposes of complying with this chapter.

42052.

 (a) A stewardship organization shall register in the department’s Recycling and Disposal Reporting System (RDRS) and report to the department the 2019 baselines for single-use packaging and single-use product units sold, offered for sale, distributed, or imported in or into the state for each producer that is a member of the stewardship organization.

(b) The department shall identify in its regulations the information required to be submitted by a stewardship organization pursuant to subdivision (a). A stewardship organization shall report the information required by subdivision (a) pursuant to the schedule determined by the department through those regulations.

42053.

(a)Starting in 2023, and annually thereafter, a stewardship organization shall charge and collect from its member producers a single-use packaging and single-use products fee of one cent ($0.01) for each single-use packaging and single-use product unit a member producer sells, offers for sale, distributes, or imports in or into the state. The stewardship organization shall expend the fees collected to implement a stewardship program consistent with an approved stewardship plan in accordance with this chapter.

(b)Starting in 2025, the single-use packaging and single-use products fee shall be adjusted as follows:

(1)For producers that have achieved source reduction of 20 percent compared to a 2019 baseline of units of single-use packaging or single-use products, the charge shall be seven and one-half mills ($0.0075) per unit.

(2)For producers that have achieved source reduction of 30 percent compared to a 2019 baseline for units of single-use packaging or single-use products, the charge shall be five mills ($0.005) per unit.

(3)For producers that have achieved source reduction of 90 percent compared to a 2019 baseline for units of single-use packaging or single-use products, there shall be no charge.

(4)For producers that have increased by 10 percent compared to a 2019 baseline units of single-use packaging or single-use products, the charge shall be 15 mills ($0.015) per unit.

(5)For producers that have increased by 20 percent or more compared to a 2019 baseline units of single-use packaging or single-use products, the charge shall be 17.5 mills ($0.0175) per unit.

(6)For all other producers, the charge shall be one cent ($0.01) per unit of single-use packaging or single-use products.

(c)A stewardship organization shall be responsible for reimbursing the department for the department’s reasonable costs to administer and enforce this chapter.

(d)A stewardship organization shall not use the fees collected from its member producers pursuant to this section or funds collected from consumers to pay an administrative civil penalty imposed on the stewardship organization pursuant to the department’s enforcement of this chapter or to pay costs associated with litigation between the stewardship organization and the state.

42053.

 (a) Starting in 2025, and annually thereafter, all producers, either individually or through a stewardship organization, shall pay all administrative and operational costs associated with establishing and implementing the stewardship program in which they participate.

(b) Upon collecting funding from producers for the purposes of paying the administrative and operational costs of the stewardship program, the stewardship organization shall annually expend a minimum of 80 percent of the annual funding collected to implement its stewardship program, except as permitted pursuant to subdivision (b) of Section 42054.

(c) The department, in approving a stewardship organization’s annual budget, shall ensure compliance with this section. For any stewardship program funding that has not been expended within 60 months, the department may require the stewardship organization to increase spending on implementing the requirements of this chapter to reduce the excess amount of reserves.

(d) A stewardship organization shall not use the funds collected pursuant to this section to pay a civil penalty imposed on the stewardship organization pursuant to the department’s enforcement of this chapter or to pay costs associated with litigation between the stewardship organization and the state.

42053.5.

 (a) On or before the end of the 2022–23 fiscal year, and once every three months thereafter, a stewardship organization shall pay to the department an administrative fee. The department shall set the fee at an amount that, when paid by every producer, is adequate to cover the department’s full costs of administering and enforcing this chapter. The total amount of fees collected shall not exceed the department’s actual and reasonable regulatory costs to implement and enforce this chapter. These costs may include the actual and reasonable costs associated with regulatory activities pursuant to this chapter before submission of stewardship plans.

(b) For a stewardship organization, the administrative fee shall be funded by the producers that make up the stewardship organization.

42054.

 (a) A stewardship organization shall not maintain total reserves exceeding 60 20 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 a stewardship organization’s annual budget, may authorize the total reserves to be increased to up to 75 30 percent of the stewardship organization’s annual operating expenses if the department determines the increase is necessary for the stewardship organization to implement the requirements of this chapter.

(c) If a stewardship organization’s reserves exceed the amount specified in subdivision (a) or (b), the department may require the stewardship organization to increase spending to implement the requirements of this chapter in order to reduce the excess amount of reserves.

42055.

 (a) A stewardship organization, as part of its stewardship plan, shall set up a trust fund or an escrow account, into which the stewardship organization shall deposit all unexpended funds for use in accordance with this section in the event that the stewardship plan terminates or is revoked.

(b) If a 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, starting within 30 days:

(1) Accept directly from producers into the trust fund or escrow account payments that would have been made to the stewardship organization prior to the 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 stewardship plan.

(c) If a new stewardship plan has not been approved by the department within one year after termination or revocation of a stewardship plan, the department may make any modifications to the previously approved stewardship plan deemed necessary by the department, and may continue to direct payments from the trust fund or escrow account in accordance with paragraph (2) of subdivision (b) to implement the modified stewardship plan.

(d) A trustee or escrow agent in possession of a stewardship organization’s funds shall, as directed by the department, transfer those funds to a successor stewardship organization with an approved stewardship plan.

42056.

 (a) A stewardship organization shall develop and submit to the department a stewardship plan and budget for implementation of its Single-Use Plastic Packaging and Products Source Reduction and Recycling Stewardship Program for the source reduction, collection, and recycling of the single-use packaging and single-use products that the producers covered under the stewardship plan sell, offer for sale, distribute, or import in or into the state. The stewardship plan and budget shall be consistent with the regulations adopted by the department.

(b) A stewardship plan and budget shall prioritize the use and expansion of remanufacturing and collection infrastructure in the state.

(c) A stewardship plan shall include actions to achieve the budget and shall include funding to support all of the following:

(1) Targets and mechanisms to achieve source reduction of single-use packaging and single-use products.

(2) Mechanisms necessary to achieve a 75 percent recycling rate of single-use packaging and single-use products by 2032 and annually thereafter.

(3) Targets and standards for use of post-consumer postconsumer recycled material.

(4) Improved collection provisions, including measures that will reduce contamination of plastics by other materials, which may include, but are not limited to, any of the following:

(A) Improvements and expansions to local recycling and composting programs.

(B) Enhanced community recycling and composting programs in disadvantaged communities.

(C) Improvements or expansion of recycling and composting infrastructure.

(D) Programs to prevent food waste and encourage recovery of edible food waste for human consumption.

(E) Programs, infrastructure, and processing to increase compost application by farmers, ranchers, and other landowners.

(5) Litter prevention and cleanup measures.

(6) Education and outreach programs for waste reduction, postconsumer recycling material, recycling, and composting.

(7) Market development mechanisms for recyclable and compostable materials, including those materials likely to contaminate plastics.

(8) Provisions and targets for transitioning from single-use packaging and single-use products to reusable or refillable alternatives and recovery for reuse.

(d) A stewardship plan and budget shall prioritize recycling and actions to achieve the requirements of this section within the state.

(e) A stewardship plan shall be consistent with the regulations adopted by the department pursuant to this chapter.

(f) To be approved by the department, a stewardship plan shall meet all of the following conditions:

(1) The plan describes how the stewardship organization will provide for a market for single-use packaging materials or single-use products to achieve the requirements of this chapter.

(2) The plan will be implemented in a manner that maximizes, to the extent feasible, the use or expansion of the existing network of solid waste collection programs and solid waste facilities providing services in accordance with local solid waste handling requirements.

(3) The plan demonstrates that activities undertaken pursuant to the plan do not violate existing franchise agreements pursuant to Section 40059, and if applicable, is in compliance with local laws, rules, and regulations applicable to solid waste handling.

(4) The plan must be is submitted to the department in a form that complies with the accessibility requirements of Section 508 of the federal Rehabilitation Act of 1973 (29 U.S.C. Sec. 794d), as amended.

(g) (1) If a stewardship plan proposes to implement a supplemental local program, the stewardship organization shall enter into a memorandum of understanding with a local agency, as defined in paragraph (2) of subdivision (b) of Section 40059.1. The memorandum of understanding shall be adopted by the governing body of the local agency by resolution or ordinance. Nothing in this paragraph shall be construed to require a local agency to enter into a memorandum of understanding with a stewardship organization.

(2) The memorandum of understanding shall include, at a minimum, all of the following:

(A) Provisions to ensure the stewardship organization and its agents shall meet the same labor and environmental requirements as were established in the local agency’s agreement with the solid waste collection service provider.

(B) A process to resolve disputes.

(C) Any other provisions specified by the local agency, including provisions allowing the local agency to recover costs associated with entering into and overseeing execution of a memorandum of understanding.

(3)If a stewardship organization proposes to or otherwise collects any beverage containers subject to the California Beverage Container Recycling and Litter Reduction Act (Division 12.1 (commencing with Section 14500)), the stewardship organization shall enter into a memorandum of understanding with the local agency, as defined in paragraph (2) of subdivision (b) of Section 40059.1, regardless of whether the stewardship organization meets the requirements of paragraph (1).

(4)

(3) All memorandums of understanding required pursuant to this subdivision shall be included in the stewardship organization’s first annual report to the department following the department’s approval of the stewardship organization’s stewardship plan.

(5)

(4) A local agency may waive the memorandum of understanding or decline to enter into a memorandum of understanding.

(6)

(5) Nothing in the memorandum of understanding may abrogate the terms of an existing franchise agreement without the consent of all parties to the franchise agreement.

42057.

 (a) At least once every five years, a stewardship organization shall review its stewardship plan and determine whether amendments to its stewardship plan are necessary.

(b) If a stewardship organization determines that amendments to its stewardship plan are necessary, the stewardship organization shall amend its stewardship plan, subject to an approval process established in regulations adopted by the department pursuant to this chapter.

(c) If a stewardship organization determines that no amendments to its stewardship plan are necessary, the stewardship organization shall send a letter to the department explaining that the stewardship organization has reviewed its stewardship plan and determined that no revisions are needed. The department may disapprove the stewardship organization’s determination within 30 days of that determination if the department concludes that the stewardship organization cannot implement the objectives of this chapter without amending the stewardship plan.

(d) Within 90 days after approval by the department of a stewardship plan, the stewardship organization shall implement the approved stewardship plan.

(e) An approved stewardship plan shall be a public record, except that financial, production, or sales data reported to the department by the 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 so the information cannot be attributable to a specific producer, retailer, or wholesaler, or to any other entity.

42058.

 (a) A stewardship organization shall keep minutes, books, and records that clearly reflect the activities and transactions of the stewardship organization.

(b) At least once each calendar year, a stewardship organization shall have its accounting books audited at the stewardship organization’s expense by an independent certified public accountant retained by the stewardship organization.

(c) A stewardship organization shall arrange for the audit to be delivered to the department with the annual report required pursuant to Section 42059. The department shall review the audit for compliance with this article and consistency with the stewardship plan developed and approved by the department pursuant to this article. The department shall notify the stewardship organization 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 article and that the audit conducted pursuant to subdivision (b) is not adequate for this purpose. The stewardship organization may obtain copies of the audit from the department upon request.

(e) The department shall not disclose any confidential or proprietary information in an audit.

42059.

 (a) A stewardship organization shall annually submit to the department and make publicly available on its internet website an annual report and budget that describes how the organization has complied with the requirements of this chapter, including its implementing regulations, and the stewardship organization’s approved stewardship plan, as well as any adjustments identified by the stewardship organization for the coming year.

(b) A stewardship organization shall include in its annual report an update on its budget and an expenditure plan for the coming year. The expenditure plan shall expend 80 percent of the full annual amount collected from the single-use packaging and single-use products fee pursuant to Section 42053, except for the reserve as permitted by pursuant to subdivision (b) of Section 42054.

(c) A stewardship organization’s annual report shall include any determination of a reduction in the single-use packaging and single-use products fee charge collected pursuant to Section 42053 consistent with achieving source reduction targets and the justification for a reduction in the single-use packaging and single-use products fee. charge.

(d) A stewardship organization shall submit its annual report and budget to the department in form that complies with the accessibility requirements of Section 508 of the federal Rehabilitation Act of 1973 (29 U.S.C. Sec. 794d), as amended.

42060.

 (a) The department shall review a stewardship organization’s annual report and budget for compliance with this article and shall approve, disapprove, or conditionally approve the annual report and budget within 120 days of receipt of the annual report and budget.

(b) If the department disapproves the annual report or budget, the department shall explain, in writing, how the annual report or budget is noncompliant, and the stewardship organization shall resubmit the report or budget with any additional information, modifications, or corrections to the department within 30 days. If the department finds that the annual report or budget resubmitted by the stewardship organization does not comply with the requirements of this article, the stewardship organization shall not be deemed in compliance with this chapter until the stewardship organization submits an annual report or budget that the department finds compliant with the requirements of this article.

(c) If the department finds that some, but not all, of the single-use packaging or single-use products covered by a stewardship plan are noncompliant, the department may issue a notice of violation to the stewardship organization and impose an administrative civil penalty pursuant to Section 42066 for the noncompliant single-use packaging or single-use products without revoking the stewardship organization’s stewardship plan.

(d) An approved annual report and budget shall be public records, except that financial, production, or sales data reported to the department by a 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 so the information cannot be attributable to a specific producer, retailer, or wholesaler, or to any other entity.

42061.

 (a) Except as provided in subdivision (c), an action specified in subdivision (b) that is taken by a stewardship organization or its members 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 its members:

(1) The creation, implementation, or management of a stewardship plan approved by the department pursuant to this article and the types or quantities of single-use packaging or single-use products managed pursuant to the stewardship plan.

(2) The cost and structure of an approved stewardship plan.

(3) The establishment, administration, collection, or disbursement of any charges associated with funding the implementation of this article. chapter.

(c) Subdivision (a) does not apply to an agreement that does any of the following:

(1) Fixes a price of or for single-use packaging or a single-use product, 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 article. chapter.

(2) Fixes the output of or production of single-use packaging or single-use products.

(3) Restricts the geographic area in which, or customers to whom, single-use packaging or single-use products will be sold.

42062.

 A court shall award a prevailing party in any civil action, brought against a stewardship organization or its agent, to enforce a franchise, contract, license, permit, or other authorization granted pursuant to subdivision (a) of Section 40059 reasonable attorney’s fees, expert witness fees, and other costs incurred in the course of the litigation in an amount the court, in its discretion, deems appropriate. A local agency, as defined in paragraph (2) of subdivision (b) of Section 40059.1, shall not be deemed to be an agent of a stewardship organization for purposes of this section.

42063.

 (a) A stewardship organization formed pursuant to this article Section 42051 shall be an organization that is exempt from taxation under Section 501(c)(3) of the federal Internal Revenue Code of 1986. 1986 (26 U.S.C. Sec. 501(c)(3)).

(b) Within six months of the adoption date of the regulations by the department pursuant to this chapter, a stewardship organization formed pursuant to subdivision (a) this article shall develop and submit to the department a stewardship plan and budget for any source reduction, collection, processing processing, or recycling of the single-use packaging or single-use products that the producers covered under the plan sell, offer for sale, distribute, or import in or into the state.

42064.

 (a) Retailers and wholesalers shall do both of the following:

(1) Upon request, report to the department a list of the producers that provide the retailer or wholesaler with single-use packaging or single-use products.

(2) Not offer for sale or sell single-use packaging, a product packaged in single-use packaging, or a single-use product in the state if the single-use packaging or single-use product is listed as nonrecyclable or noncompostable for that packaging category or product category on the department’s internet website pursuant to Section 42065, 42067, commencing 120 days after the date the single-use packaging, product packaged in single-use packaging, or single-use product was listed as noncompliant nonrecyclable or noncompostable by the department.

(b) (1) The department shall develop criteria in regulations for exemptions from the requirements of this chapter for small producers, small retailers, and small wholesalers. Criteria developed by the department shall include, but not be limited to, size, revenue, number of retail locations, and market share.

(1)

(2) In developing the criteria, the department shall exempt producers, retailers, or wholesalers that, in the most recent calendar year, had gross sales of less than one million dollars ($1,000,000) in California.

(2)

(3) If the department determines that exempting a particular small producer, small retailer, or small wholesaler hinders the ability of a packaging or product category from complying with the requirements of this chapter, the department may determine that the particular small producer, small retailer, or small wholesaler shall not be exempted from the requirements of this chapter.

42065.

 The department shall develop and post on its internet website, and update at least annually, a list of single-use packaging categories and single-use product categories for producers that are not in compliance with this chapter. The department may develop and post on its internet website a list of single-use packaging categories and single-use product categories for producers that are in compliance with this chapter.

42066.

 (a) (1) The department may issue a notice of violation to and impose an administrative civil penalty not to exceed fifty thousand dollars ($50,000) per day per violation on any entity not in compliance with this article or regulations adopted by the department to implement this article.

(1)

(2) A violation of Section 42064 shall be determined based on the brand name, package form, material class class, and package size that the department has deemed is out of compliance.

(2)

(3) The entity will shall not be eligible to begin accruing penalties until at least 30 days following the notification of violation.

(3)

(4) The department shall deposit all administrative civil penalties collected pursuant to this section into the Circular Economy Penalty Account, which is hereby created. Moneys in the Circular Economy Penalty Account shall be available to the department, upon appropriation by the Legislature, for purposes in furtherance of this chapter.

(4)The entity not in compliance shall not use funds collected from consumers to pay an administrative civil penalty imposed on the entity pursuant to the department’s enforcement of this chapter or to pay costs associated with litigation between the entity and the state.

(b) The department, in determining the administrative civil penalty amount and whether to assess an administrative civil penalty, shall consider all of the following:

(1) The nature, circumstances, extent, and gravity of the violation or a condition giving rise to the violation and the various remedies and penalties that are appropriate in the given circumstances, with primary emphasis on protecting the public health and safety and the environment.

(2) Whether the violation or conditions giving rise to the violation have been corrected in a timely fashion or whether reasonable progress is being made to correct the violation or conditions giving rise to the violation.

(3) Whether the violation or conditions giving rise to the violation demonstrate a chronic pattern of noncompliance with this chapter or the regulations adopted pursuant to this chapter.

(4) Whether the violation or conditions giving rise to the violation were intentional.

(5) Whether the violation or conditions giving rise to the violation were voluntarily and promptly reported to the department before the commencement of an investigation or audit by the department.

(6) Whether the violation or conditions giving rise to the violation were due to circumstances beyond the reasonable control of the producer or were otherwise unavoidable under the circumstances, including, but not limited to, unforeseen changes in market conditions.

(7) The size and economic condition of the entity.

Article  3. Single-Use Plastic Packaging and Products Source Reduction and Recycling Standards

42067.

 (a) (1) No later than July 1, 2022, the department shall post a list of packaging categories and product categories of single-use packaging and single-use products that are easily recyclable or easily compostable, hard to recycle or hard to compost, or nonrecyclable or noncompostable.

(1)

(2) The initial list of easily recyclable or easily compostable single-use packaging or single-use products posted by the department shall include, but not be limited to, plastics designated with a “1” code number under Section 18015.

(2)

(3) The initial list of hard to recycle or hard to compost single-use packaging or single-use products shall include, but not be limited to, plastics designated with a “3” or “7” code under Section 18015.

(3)

(4) The initial list of nonrecyclable or noncompostable single-use packaging or single-use products shall include, but not be limited to, plastics with oxo-degradable additives, plastics designated with a “6” code under Section 18015, and multilayer and multimaterial plastics such as laminates, pouches, and cartons.

(b) The department shall update the list at least every two years and shall regularly, but no less than once every two years, evaluate the list to determine whether the determinations of easily recyclable or easily compostable, hard to recycle or hard to compost, or nonrecyclable or noncompostable are still accurate. The department may amend the list to remove, add, or change a determination. The department shall post any updates to the list on its internet website.

(c) A producer that seeks to change a department determination pursuant to subdivision (a) may be required by the department to submit data for purposes of the department’s determination.

(d) Development and publication of the list pursuant to this section, including any updates, are exempt from the rulemaking provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

42068.

 (a) In adopting regulations pursuant to this chapter, the department shall develop criteria to determine if single-use packaging and single-use products are easily recyclable or easily compostable, hard to recycle or hard to compost, or nonrecyclable or noncompostable.

(b) (1) When determining if single-use packaging or single-use products are easily recyclable, hard to recycle, or nonrecyclable, the department shall consider, at a minimum, all of the following criteria:

(A) Whether the single-use packaging or single-use product is eligible to be labeled as “recyclable” in accordance with the uniform standards contained in Article 7 (commencing with Section 17580) of Chapter 1 of Part 3 of Division 7 of the Business and Professions Code.

(B) Whether the single-use packaging or single-use product is regularly collected, separated, and cleansed for recycling by recycling service providers.

(C) Whether the single-use packaging or single-use product is regularly sorted and aggregated into defined streams for recycling processes.

(D) Whether the single-use packaging or single-use product is regularly processed and reclaimed or recycled with commercial recycling processes.

(E) Whether the single-use packaging or single-use product material regularly becomes feedstock that is used in the production of new products.

(F) Whether the single-use packaging or single-use product material is recycled in sufficient quantity, and is of sufficient quality, to maintain a market value.

(2) For purposes of determining if single-use packaging or single-use products are recyclable, the department shall consider the regulations adopted pursuant to Article 10.4 (commencing with Section 25214.11) of Chapter 6.5 of Division 20 of the Health and Safety Code and Section 69502 of Title 22 of the California Code of Regulations.

(c) (1) For purposes of determining if single-use packaging or single-use products are easily compostable, hard to compost, or noncompostable, the department shall consider, at a minimum, all of the following criteria:

(A) Whether the single-use packaging or single-use product is eligible to be labeled as “compostable” in accordance with the uniform standards contained in Article 7 (commencing with Section 17580) of Chapter 1 of Part 3 of Division 7 of the Business and Professions Code.

(B) Whether the single-use packaging or single-use product will, in a safe and timely manner, break down or otherwise become part of usable compost that and can be composted in a public or private compost facility designed for and capable of processing postconsumer food waste, and food-soiled paper, compostable single-use packaging and single-use products.

(C) Whether the single-use packaging or single-use product made from plastic is certified to meet the ASTM International standard specification identified in either subparagraph (A) or (B) of paragraph (1) of subdivision (b) of Section 42356 and adopted in accordance with Section 42356.1, if applicable.

(D) Whether the single-use packaging or single-use product is regularly collected and accepted for processing at public and private compost facilities.

(2) For purposes of determining if single-use packaging or single-use products are compostable, the department shall consider the regulations adopted pursuant to Article 10.4 (commencing with Section 25214.11) of Chapter 6.5 of Division 20 of the Health and Safety Code and Section 69502 of Title 22 of the California Code of Regulations.

42069.

 (a) The department shall ensure that any regulations adopted pursuant to this chapter account for guidelines and regulations issued by the United States Food and Drug Administration and the United States Department of Agriculture.

(b) In adopting regulations pursuant to this chapter that would impact film packaging that controls the oxygen and carbon dioxide ratio of fresh cut produce, the department shall consider how much organic waste could be generated by the requirement. If a producer, retailer, or wholesaler submits information demonstrating to the department that subjecting film packaging that controls the oxygen and carbon dioxide ratio of fresh cut produce to this chapter would cause an increase in organic waste, as defined by Section 42649.8, the department shall exempt the film packaging from this chapter.

(c) If the department determines at any point that a type of single-use packaging or single-use product cannot comply with this chapter due to health and safety reasons, or because it is unsafe to recycle, the department may exempt that packaging or product from this chapter.

(d) In adopting regulations pursuant to this chapter, the department shall consider and avoid disproportionate impacts to low-income or disadvantaged communities.

(e) The department shall not impose a requirement in direct conflict with a federal law or regulation, including, but not limited to, all of the following:

(1) Laws or regulations Regulations covering tamper-evident packaging pursuant to Section 211.132 of Title 21 of the Code of Federal Regulations.

(2) Laws or regulations Regulations covering child-resistant packaging pursuant to Part 1700 (commencing with Section 1700.1) of Subchapter E of Chapter II of Title 16 of the Code of Federal Regulations.

(3) Regulations, rules, or guidelines issued by the United States Department of Agriculture or the United State Food and Drug Administration relevant to packaging agricultural commodities.

(4) Requirements for microbial contamination, structural integrity, or safety of packaging under the federal Federal Food, Drug, and Cosmetic Act (21 U.S.C. Sec. 301 et seq.).

(5) All of the following laws, including regulations, rules, or guidance issued pursuant to the laws:

(A) 21 Chapter 26 (commencing with Section 2101) of Title 21 of the United States Code (21 U.S.C. Sec. 2101 et seq. seq.).

(B) The federal FDA Food Safety Modernization Act (21 U.S.C. Sec. 2201 et seq.). (Public Law 111-353).

(C) The federal Poultry Products Inspection Act (21 U.S.C. Sec. 451 et seq.).

(D) The Federal Meat Inspection Act (21 U.S.C. Sec. 601 et seq.).

(E) The federal Egg Products Inspection Act (21 U.S.C. Sec. 1031 et seq.).

(f) In developing regulations, the department shall ensure that single-use packaging and single-use products are protective of health and safety, consistent with, but not limited to, Chapter 6 (commencing with 42370) of Part 3 of Division 30, 42370), Chapter 55 (commencing with Section 69501) of Division 4.5 of Title 22 of the California Code of Regulations, and regulations adopted pursuant to Article 10.4 (commencing with Section 25214.11) of Chapter 6.5 of Division 20 of the Health and Safety Code.

42070.

 (a) Beginning January 1, 2023, all single-use packaging and single-use products sold, offered for sale, distributed, or imported in or into the state shall be easily recyclable or easily compostable in the state.

(b) Beginning January 1, 2035, all single-use packaging and single-use products sold, offered for sale, distributed, or imported in or into the state shall include 75 percent post-consumer postconsumer recycled content.

42071.

 (a) Beginning January 1, 2023, the department shall issue a notice of violation to and impose an administrative civil penalty on a producer that is in violation of subdivision (a) of Section 42070 as follows:

(1) One cent ($0.01) per unit sold, offered for sale, distributed, or imported in or into the state of hard to recycle or hard to compost single-use packaging and single-use products.

(2) Two cents ($0.02) per unit sold, offered for sale, distributed, or imported in or into the state of nonrecyclable or noncompostable single-use packaging and single-use products.

(b) Beginning January 1, 2035, in addition to the administrative civil penalty outlined in subdivision (a), the department shall issue a notice of violation to and impose an administrative civil penalty on a producer that is in violation of subdivision (b) of Section 42070 of one cent ($0.01) per unit sold, offered for sale, imported, or distributed in or into the state for single-use packaging or single-use products that do not include 75 percent post-consumer postconsumer recycled content.

42072.

 (a) Administrative civil penalties collected pursuant to Section 42071 shall be deposited into the Single-Use Plastic Packaging and Products Penalty Account, which is hereby created. Moneys in the Single-Use Plastic Packaging and Products Penalty Account shall be available to the department, upon appropriation by the Legislature, to fund projects with demonstrated environmental or environmental health benefits, and that prioritize projects within California.

(b)Funds shall not be used for purposes that are inconsistent with the intent of this chapter.

(b) A minimum of 75 percent of moneys in the Single-Use Plastic Packaging and Products Penalty Account shall annually be allocated, upon appropriation by the Legislature, to projects described in subdivision (a) that benefit disadvantaged communities, as described in Section 39711 of the Health and Safety Code.

42073.

 In complying with this chapter, a producer shall do all of the following:

(a) Maintain records of packaging and product material manufactured, sold, offered for sale, imported, or distributed in or into the state.

(b) (1) Upon request, provide the department with relevant records necessary to determine compliance with this chapter.

(2) Records shall be submitted in a form and manner that the department establishes and determines is necessary to assess whether the producer is in compliance with this chapter.

(c) Provide required reports and data that are accurate and attested to under penalty of perjury as required by the department.

(d) Upon request, provide the department with reasonable and timely access to the producer’s facilities and operations, as necessary to determine compliance with this chapter.

(e) Upon request, provide the department with information necessary to identify the producers that provide the retailer or wholesaler retailers or wholesalers that the producer provides with products packaged in single-use packaging.

42074.

 (a) This chapter does not apply to single-use packaging or single-use products within a jurisdiction that is subject to a local stewardship program pursuant to an ordinance that took effect before January 1, 2021. If that ordinance is repealed in the jurisdiction, the single-use packaging or single-use products shall be subject to this chapter in that jurisdiction 270 days after the date on which the ordinance is repealed.

(b) This chapter preempts a local stewardship program for single-use packaging or single-use projects enacted by an ordinance with an effective date on or after January 1, 2021.

(c) A local stewardship program for single-use packaging or single-use products enacted by an ordinance that has an effective date before January 1, 2021, may continue to operate. Producers that are participants of a local stewardship program for single-use packaging or single-use products enacted by an ordinance that has an effective date before January 1, 2021, shall comply with this chapter for packaging or products subject to the local stewardship program if the local stewardship program is dissolved.

SEC. 2.

 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.

SEC. 3.

 The Legislature finds and declares that Section 1 of this act, which adds Chapter 3 (commencing with Section 42040) 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 protect the proprietary information of producers, retailers, and wholesalers of single-use packaging and single-use products, it is necessary that financial, production, and sales data reported by producers, retailers, and wholesalers of single-use packaging and single-use products be kept confidential.