Amended  IN  Assembly  April 03, 2024
Amended  IN  Assembly  July 03, 2023
Amended  IN  Senate  May 23, 2023
Amended  IN  Senate  April 11, 2023
Amended  IN  Senate  March 20, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill
No. 707

Introduced by Senator Newman
(Coauthors: Senators Skinner and Wiener)

February 16, 2023

An act to add Chapter 20.5 (commencing with Section 42984) to Part 3 of Division 30 of the Public Resources Code, relating to solid waste.


LEGISLATIVE COUNSEL'S DIGEST


SB 707, as amended, Newman. Responsible Textile Recovery Act of 2023. 2024.
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. The act establishes stewardship programs for various products, including, among others, carpet, mattresses, and pharmaceutical and sharps waste.
This bill would enact a stewardship program known as the Responsible Textile Recovery Act of 2023, 2024, which would require producers, as defined, either independently or through the creation of one or more stewardship organizations, to establish a stewardship program for the collection and recycling of a covered product. The bill would define a “covered product” to include any postconsumer apparel or postconsumer textile article that is unwanted by a consumer, except as specified. a producer of apparel, as defined, or textile articles, as defined, to form and join a producer responsibility organization or PRO. The bill would require the PRO to be approved by the department pursuant to the requirements of the bill, as provided. The bill would require the department to adopt regulations to implement the program no earlier than January 1, 2028. The bill would require a program operator, as defined, to submit a complete stewardship plan to the department for review and approval, disapproval, or conditional approval. the PRO to submit to the department, for approval or disapproval, a complete plan for the collection, transportation, repair, sorting, and recycling, and the safe and proper management, of apparel, as defined, and textile articles, as defined, in the state. Upon approval of a plan, or commencing January 1, 2030, whichever is earlier, the bill would prohibit a producer from selling, offering for sale, importing, or distributing apparel or textiles in or into the state, unless the producer is a participant of a PRO, the department has approved the plan, and other criteria are met. The bill would require the program operator PRO to review the plan at least every 5 years after approval. The bill would also require a program operator PRO to submit an annual report to the department. department, as provided. The bill would require all reports and records provided to the department to be provided under penalty of perjury. By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program. The bill would restrict public access to certain information collected for the purpose of administering a stewardship the program.
This bill would require the department to post on its internet website a list of producers that are in compliance with the requirements of the program. The bill would require the department to adopt regulations governing the program, and would authorize, beginning January 1, 2032, the department to reassess the adopted regulations to include adjusting the minimum required collection sites, establishing a minimum recycling efficiency rate for covered products collected and recycled by program operators, or establishing other criteria for the program. The bill would require program operators PROs to pay fees to the department, not to exceed the department’s actual and reasonable regulatory costs to implement and enforce the provisions of the act. The bill would establish the Textile Stewardship Recovery Fund in the State Treasury for the deposit of all moneys received from program operators PROs and would make the moneys in the fund available to the department, upon appropriation by the Legislature, for purposes of the program. The bill would also authorize the department to impose administrative civil penalties for a violation of the program’s requirements, not to exceed $10,000 per day, or not to exceed $50,000 per day for an intentional, knowing, or reckless intentional or knowing violation, as specified. The bill would create the Textile Stewardship Recovery Penalty Account in the fund for the deposit of penalties, which would be available for expenditure upon appropriation by the Legislature, as specified.
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 20.5 (commencing with Section 42984) is added to Part 3 of Division 30 of the Public Resources Code, to read:
CHAPTER  20.5. Responsible Textile Recovery Act of 2023 2024
Article  1. General Provisions
42984.

For purposes of this chapter, the following definitions apply:

(a)“Advisory committee” means the producer responsibility advisory body created pursuant to subdivision (c) of Section 42984.1.

(b)(1)“Apparel” means clothing and accessory items intended for regular wear or formal occasions, including, but not limited to, undergarments, shirts, pants, skirts, dresses, overalls, bodysuits, costumes, vests, dancewear, suits, saris, scarves, tops, leggings, school uniforms, leisurewear, athletic wear, sports uniforms, everyday swimwear, formal wear, onesies, bibs, diapers, footwear, handbags, backpacks, and everyday uniforms for workwear.

(2)“Apparel” does not include personal protective equipment or clothing items for exclusive use by the United States military.

42984.
 This act may be known, and shall be cited, as the Responsible Textile Recovery Act of 2024.

42984.1.
 The purpose of this chapter is to increase the amount of postconsumer apparel and textile articles that are diverted from landfills and reused, repaired, and recycled into secondary products or otherwise managed in a manner that is consistent with the state’s hierarchy for waste management practices pursuant to Section 40051.

42984.2.
 The department, acting in accordance with Article 1 (commencing with Section 11340) to Article 8 (commencing with Section 11350), inclusive, of the Administrative Procedure Act, as set forth in Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, shall adopt regulations to implement this chapter with an effective date of no earlier than January 1, 2028.

42984.3.
 (a) (1) “Apparel” means clothing and accessory items intended for regular wear or formal occasions and outdoor activities. For purposes of this chapter “apparel” includes only undergarments, shirts, pants, skirts, dresses, overalls, bodysuits, costumes, vests, dancewear, suits, saris, scarves, tops, leggings, school uniforms, leisurewear, athletic wear, sports uniforms, everyday swimwear, formal wear, onesies, bibs, footwear, handbags, backpacks, knitted and woven accessories, jackets, coats, snow pants, ski pants, and everyday uniforms for workwear.
(2) “Apparel” does not include any of the following:
(A) Personal protective equipment or clothing items for use by the United States military.
(B) Personal protective equipment worn to protect the wearer from health or environmental hazards.
(C) Reusable products designed to collect and absorb urine and feces, or reusable products regulated by the United States Food and Drug Administration that are designed to collect and absorb menstruation or vaginal discharge.

(c)

(b) “Authorized collector” means a person or entity that has entered into an agreement with a program operator PRO to collect covered products.

(d)

(c) “Authorized sorter” means a person or entity that has entered into an agreement with a program operator PRO to sort covered products collected by authorized collectors.

(e)

(d) “Authorized repair business” means a person or entity that has entered into an agreement with a program operator PRO to repair covered products for resale after collection by an authorized collector or after sorting by an authorized sorter.

(f)

(e) “Brand” means a trademark, including both a registered trademark and an unregistered trademark, a logo, a name, a symbol, a word, an identifier, or a traceable mark that identifies a covered textile article product and identifies the owner or licensee of the brand.

(g)

(f) “Collection site” means a permanent or temporary location operated by an authorized collector at which covered products are collected and prepared for transport in accordance with the requirements of this chapter.

(h)

(g) “Consumer” means an owner of a covered product, including a person, business, corporation, limited partnership, nonprofit organization, or governmental entity, and includes the ultimate purchaser, owner, or lessee of a covered product, who is not, as to that covered product, the distributor, importer, producer, recycler, retailer, or stewardship organization. PRO.

(i)(1)“Covered product” means any any postconsumer apparel or postconsumer textile article that is unwanted by a consumer.

(2)“Covered product” does not include either of the following:

(A)A product covered under the Used Mattress Recovery and Recycling Act (Chapter 21 (commencing with Section 42985)).

(B)A product covered under the Electronic Waste Recycling Act of 2003 (Chapter 8.5 (commencing with Section 42460)).

(h) (1) “Covered product” means an apparel or textile article.
(2) “Covered product” does not include either of the following:
(A) A product covered under the Used Mattress Recovery and Recycling Act (Chapter 21 (commencing with Section 42985)).
(B) A product covered under the Electronic Waste Recycling Act of 2003 (Chapter 8.5 (commencing with Section 42460)).
(C) A product covered under the Product Stewardship for Carpets law (Chapter 20 (commencing with Section 42970)).

(j)

(i) “Department” means the Department of Resources Recycling and Recovery or a successor agency.

(k)

(j) “Distributor” means a company that has a contractual relationship with one or more producers to market and sell covered textile articles products to a retailer.

(l)

(k) “Importer” means either of the following:
(1) 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 covered textile article product that is sold, distributed for sale, or offered for sale in or into the state that was manufactured or assembled by a company outside of the United States.
(2) A person importing into the state for sale, distributing for sale, or offering for sale in the state a covered textile article product that was manufactured or assembled by a company physically located outside of the state.

(m)

(l) “Local jurisdiction” means a city, county, city and county, or a regional agency formed pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code or Article 3 (commencing with Section 40970) of Chapter 1 of Part 2 of this code, or a special district that provides solid waste collection services.

(n)

(m) “Mail-back program” means a method of collecting covered products using prepaid, preaddressed mailing envelopes envelopes, boxes, or other means that are reusable, recyclable, or compostable.
(n) “Marketplace facilitator” means ____.
(o) “Nonprofit thrift store” has the same meaning as set forth in Section 6363.3 of the Revenue and Taxation Code.

(o)

(p) “Person” has the same meaning as set forth in Section 40170.

(p)

(q) (1) “Producer” means a person who manufactures a covered product and who owns or is the licensee of the brand or trademark under which that covered product is sold, offered for sale, or distributed for sale in or into the state.
(2) If there is no person in the state who is the producer for purposes of paragraph (1), the producer of the covered product is the owner of a brand or trademark or, if the owner is not in the state, the exclusive licensee of a brand or trademark under which the covered product is sold, imported for sale, offered for sale, or distributed for sale in or into the state. state, regardless of whether the trademark is registered. For purposes of this subdivision, an exclusive licensee is a person holding the exclusive right to use a trademark or brand in the state in connection with the manufacture, sale, or distribution for sale in or into the state of the covered product.

(3)If there is no person in the state who is the producer for purposes of paragraph (1) or (2), the producer of the covered product is the person who sells, offers for sale, or is the importer or distributor of the covered textile article in or into the state for sale in or into the state.

(4)For purposes of this chapter, the sale of a covered textile article shall be deemed to occur in the state if the covered textile article is delivered to the consumer in the state.

(5)“Producer” does not include a seller of secondhand apparel or secondhand textile articles.

(q)“Program operator” means a producer, or a stewardship organization on behalf of a group of producers, which is responsible for implementing a stewardship program in accordance with the requirements of this chapter.

(r)“Recycling” has the same meaning as set forth in Section 40180.

(s)“Recycling efficiency rate” means the ratio of the weight of covered products recycled by a program operator to the weight of those covered products collected by the program operator.

(t)“Repair” means any alteration or improvement of damaged covered materials deemed worth the cost of repair by criteria established by the stewardship plan, including, but not limited to, any of the following:

(1)Washing or laundering.

(2)Upcycling, redesign, and repurposing.

(3)Mending rips, holes, seams, and hems.

(4)Removing and repairing surface damages, such as pilling, stain removal, or abrasion.

(5)Securing and reattaching buttons and other fastenings.

(6)Dyeing, redyeing, overdyeing, or printing of images on covered products.

(u)“Retailer” means a person who sells or offers for sale a covered product 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.

(v)“Reuse” means putting a collected covered product back into commerce for its original intended use and when the collected covered product retains its original performance characteristics and can be used for its original purpose with or without repair.

(w)“Secondhand apparel” means any apparel item that has been previously owned by a consumer.

(x)“Secondhand textile article” means a usable textile article that has been previously owned by a consumer.

(y)“Secondhand markets” means a retailer who sells secondhand apparel or secondhand textile articles, including, but not limited to, thrifts, online resale platforms, and flea markets.

(z)“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 or designated by a group of producers in accordance with this chapter to develop and implement a stewardship program.

(aa)“Stewardship plan” or “plan” means a plan developed by a program operator pursuant to this chapter for the collection, transportation, repair, recycling, and the safe and proper management of covered products.

(ab)“Stewardship program” means a program established by a program operator pursuant to this chapter for the free at drop off, convenient, and safe collection, transportation, repair, recycling, and otherwise proper management of covered products.

(ac)“Textile article” means any item customarily used in households or businesses that are made entirely or primarily from a natural, artificial, or synthetic fiber, yarn, or fabric. For purposes of this chapter, “textile article” includes blankets, curtains and fabric window coverings, knitted and woven accessories, towels, tapestries, bedding, tablecloths, napkins, linens, pillows, and fabric sold by the bolt at retail.

(3) If there is no person in the state who is the producer for purposes of paragraph (1) or (2), then the producer of the covered product is the person that imports the covered product into the state for sale or distribution.
(4) If there is no person in the state who is the producer for purposes of paragraph (1), (2), or (3) and if the person who sells the covered product is a ____, then the marketplace facilitator is the obligated producer.
(5) If there is no other person in the state who is the producer for purposes of paragraphs (1), (2), (3), or (4), the producer of the covered product is the distributor, retailer, or wholesaler who sells the product in or into the state.
(6) For the purposes of this chapter, the sale of a covered product shall be deemed to occur in the state if the covered product is delivered to the consumer in the state.
(7) “Producer” does not include a seller that only sells secondhand apparel.
(8) “Producer” does not include a seller with less than one million dollars ($1,000,000) in annual sales.
(r) “Producer responsibility organization” or “PRO” means an organization that is exempt from taxation under Section 501(c)(3) of the federal Internal Revenue Code of 1986, is formed for the purpose of implementing a plan to meet the requirements of this chapter, and is approved by the department.
(s) “Producer responsibility plan” or “plan” means the plan developed by the PRO for the collection, transportation, repair, recycling, and the safe and proper management of covered products pursuant to subdivision (a) of Section 42984.8 and submitted to the department for approval pursuant to subdivision (b) of Section 42984.8.
(t) “Recycle” or “recycling” has the same meaning as set forth in subdivision (aa) of Section 42041.
(u) “Repair” means any alteration or improvement of damaged covered product deemed worth the cost of repair by criteria established by the plan, including, but not limited to, any of the following:
(1) Redesigning and repurposing.
(2) Mending rips, holes, seams, and hems.
(3) Removing and repairing surface damage, such as pilling, stain removal, or abrasion.
(4) Securing and reattaching buttons and other fastenings.
(5) Dyeing, redyeing, overdyeing, or printing of images on covered products.
(6) Preparation for reuse and resale.
(v) “Retailer” means a person who sells or offers for sale a covered product 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.
(w) “Reuse” means the resale of a collected covered product for its original intended use with or without repair.
(x) “Secondhand covered product” means any covered product that has been previously owned by a consumer.
(y) “Secondhand markets” means a retailer who sells secondhand covered products, including, but not limited to, thrift stores, online resale platforms, and flea markets.
(z) “Stewardship program” means a program established by a PRO pursuant to this chapter for the free, convenient, and safe collection, transportation, repair, recycling, and otherwise proper management of covered products.
(aa) “Textile article” means an item customarily used in households or businesses that are made entirely or primarily from a natural, artificial, or synthetic fiber, yard, or fabric. For purposes of this chapter, “textile article” includes only blankets, curtains, fabric window coverings, knitted and woven accessories, towels, tapestries, bedding, tablecloths, napkins, linens, and pillows.

42984.1.

(a)The department, acting in accordance with Article 1 (commencing with Section 11340) to Article 8 (commencing with Section 11350), inclusive, of the Administrative Procedure Act, as set forth in Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, shall adopt regulations to implement this chapter with an effective date of no earlier than December 31, 2025.

(b)Beginning January 1, 2032, the department may reassess the regulations developed pursuant to subdivision (a). The reassessment may include adjusting the minimum required collection sites, establishing a minimum recycling efficiency rate for covered products collected and recycled by program operators, or establishing other criteria for the program.

(c)(1)No later than 90 days after the effective date of regulations adopted pursuant to this section, the department shall appoint an advisory committee for the purposes of consulting with producers and stewardship organizations with approved plans. Membership in the advisory committee shall include, but is not limited to, representatives from local governments, recyclers, retailers, nonprofit thrift stores, authorized collectors, authorized sorters, authorized repair businesses, nongovernmental organizations, environmental organizations, community-based justice and public health organizations, the second-hand industry, and the solid waste industry.

(2)Participation on the advisory committee shall be voluntary.

(3)The advisory committee is not a state body as that term is used in Section 11121 of the Government Code, but shall provide advanced public notice about meetings, allow public participation in all meetings, and vote on written recommendations at public meetings.

Article  2. Producers
42984.2.

(a)In order to comply with the requirements of this chapter, a producer may establish and implement a stewardship program independently, or as part of a group of producers through membership in a stewardship organization exempt from taxation under Section 501(c)(3) of the federal Internal Revenue Code of 1986 (21 U.S.C. 501(c)(3)). Producers may establish or designate one or more stewardship organizations to comply with the requirements of this chapter.

(1)A producer shall not sell, distribute for sale, offer for sale, or import for sale any apparel or textile article in or into this state unless the producer is in compliance with this chapter and any regulations in effect and adopted pursuant to Section 42984.1.

(2)Every producer shall, no later than 180 days after the effective date of this chapter, notify all persons through which it is selling, distributing, importing, or offering for sale a covered product in or into the state for sale in or into the state whether it will comply with this chapter individually or through a stewardship organization.

(3)Each producer covered under a stewardship organization shall register with that stewardship organization in accordance with the procedures and requirements established by that stewardship organization and shall comply with those procedures and requirements.

(b)A producer is not in compliance with this chapter and is subject to penalties pursuant to Article 7 (commencing with Section 42984.15) if, commencing two years from the adoption of regulations pursuant to Section 42984.1, a covered product sold or offered for sale by the producer is not subject to an approved stewardship plan that has been approved by the department pursuant to Section 42984.5.

42984.4.
 (a) (1) Producers of covered products shall form and join a PRO for the purposes of complying with this chapter. The governing body of the PRO shall submit an application to the department by January 1, 2026, describing how the PRO meets the requirements to be an approved PRO pursuant to this chapter. If the department approves the PRO, the PRO shall proceed to carry out the requirements of this chapter. If applications for more than one PRO are submitted to the department, the department shall determine which proposed PRO can most effectively implement this chapter.
(2) The department shall, by, March 1, 2026, approve a PRO that meets the requirements of this chapter and both of the following:
(A) The PRO has a governing board consisting of producers that represent the diversity of covered products placed in the market by those entities.
(B) The PRO demonstrates that it has adequate financial responsibility and financial controls in place, including fraud prevention measures and an audit schedule, to ensure proper management of funds.
(3) After January 1, 2035, upon the determination of the director that an additional PRO would be beneficial in satisfying the requirements of this chapter, the department may approve additional PROs that meet the requirements of this chapter and that meet all of the following requirements:
(A) The proposed PRO submits to the department, and agrees to cover the department’s reasonable costs to review, a petition to establish a new PRO.
(B) The proposed PRO is composed of a sufficient number of producers to jointly comply with the requirements of this chapter.
(C) The proposed PRO agrees to cover the costs of all of the provisions of this chapter applicable to the proposed PRO and its participant producers.
(b) Each producer covered under a PRO shall register with that PRO in accordance with the procedures and requirements established by that PRO and shall comply with those procedures and requirements.
(c) Upon approval of a plan pursuant to Section 42984.8, or commencing January 1, 2030, whichever is sooner, a producer shall not sell, offer for sale, import, or distribute a covered product in the state unless all of the following are met:
(1) The producer is a participant of the PRO.
(2) The covered product is accounted for in the plan.
(3) The department has approved the plan.
(4) If an entity does not meet the definition of a producer and is not subject to this chapter before January 1, 2030, but, at any point, after January 1, 2030, meets the definition of a producer, the producer shall become a participant of the PRO and comply with the requirements of this chapter prior to beginning to sell, offer for sale, import, or distribute covered products in or into the state.
(d) A producer is not in compliance with this chapter and is subject to penalties pursuant to this chapter if a covered product sold or offered for sale by the producer is not subject to an approved PRO plan that has been approved by the department pursuant to Section 42984.8.

42984.3.42984.5.
 (a) No later than 180 30 days after the effective date of the regulations implementing this chapter, individual producers or the PRO shall provide to the department, in a form and manner established by the department, a list of covered products and brands of covered products that the producer sells, distributes for sale, imports for sale, or offers for sale in or into the state.
(b) A producer or PRO shall update the list described in subdivision (a) and provide the updated list to the department on or before January 15 of each year or upon request of the department.

Article  3. Program Operators Producer Responsibility Organizations (PROs)
42984.4.

(a)(1)A program operator shall establish a method for fully funding the stewardship program in a manner that equitably distributes the stewardship program’s costs among participating producers that reflects production and sales volumes. The funding mechanism shall incentivize green design by modulating distribution of cost of participating producers to consider the cost of repairing, recycling, or otherwise managing their specific covered products.

(2)A producer that elects to meet the requirements of this chapter individually, without joining a stewardship organization, shall establish a method for fully funding the stewardship program.

(b)A program operator shall include as a collection site under its stewardship program any local jurisdiction that offers in writing to participate in the stewardship program and agrees to comply with any program operator requirements that are consistent with that program operator’s approved stewardship plan, even if the minimum thresholds described in subdivision (e) of Section 42984.7, as applicable, have been achieved.

(1)A program operator shall include the local jurisdiction as a collection site in the stewardship program within 90 days of receiving the written offer to participate, confirming that the offering entity will comply with any program operator requirements that are consistent with that program operator’s approved stewardship plan, even if the minimum thresholds described in subdivision (e) of Section 42984.7, as applicable, have been achieved.

(2)The program operator shall not be required to respond to offers pursuant to this paragraph until the program operator’s stewardship plan has been approved by the department.

(c)A program operator may suspend or terminate a collection site that does not comply with all applicable state, federal, or municipal laws and regulations or adhere to the rules and conditions imposed by the program operator pursuant to paragraph (5) of subdivision (g) of Section 42984.7.

(d)A collection site shall be operated to ensure that covered products are collected safely and handled in accordance with all applicable state, federal, and municipal laws and regulations and the rules and conditions of the stewardship plan. Authorized collectors and authorized sorters may divert reusable apparel and textile articles for sale in secondhand markets.

(e)A program operator shall require all contractors to pay the state minimum wage.

42984.6.
 (a) (1) A PRO shall prepare the initial statewide needs assessment, in consultation with the department, designed to determine the necessary steps and investment needed for covered products, to achieve the requirements of this chapter. Needs assessments, or components thereof, shall be updated every five years or as necessary to ensure the requirements of this chapter are met. An initial needs assessment for covered products shall be completed before the completion and approval of any producer responsibility plan for covered products. The PRO may select an independent third-party contractor to complete the needs assessment.
(2) A PRO shall cover the cost of developing any needs assessment and any update to a needs assessment.
(3) A PRO may prepare more than one needs assessment, with each assessment specific to one or more covered products subject to this chapter, or may prepare one comprehensive needs assessment that includes all covered material subject to this chapter.
(4) A PRO shall consult with the department and local jurisdictions when preparing the needs assessment.
(5) The initial needs assessment, and any updates, shall be submitted to the department by March 1, 2027.
(6) If there is more than one PRO approved by the department at the time updated needs assessments are completed, then the approved PROs may collaborate on a single needs assessment.
(b) A needs assessment shall comply with all of the following:
(1) Be designed to inform the program budget and PRO plan.
(2) Include an evaluation of all of the following with respect to covered products and covered product categories:
(A) Existing scope and scale of annual covered products diverted to landfill in the state by type of covered product, material composition, and volume and annual covered product recovery diverted to reuse, repair, or recycling in the state or from the state by type of covered product, material composition, and volume.
(B) The current repair, reuse, recycling, collection, sorting, and hauling system in the state and the expanded access and additional repair, reuse, recycling, collection, sorting, disassembly, and hauling options needed to meet the requirements of this chapter.
(C) Current market conditions and the need to create viable end markets in the state, regionally, and globally.
(D) Existing state statutory provisions and funding sources related to market development and financial incentives to help achieve the state’s goals related to repair, reuse, recycling, collection, sorting, disassembly, and hauling.
(E) Consumer education needs and the methods by which the PRO can best reach consumers with educational messaging.
(F) Consumer behaviors to drive repair, reuse, and recycling and to achieve the requirements of this chapter.
(G) Funding needs and incentive mechanisms necessary to achieve the requirements of this chapter, including coverage of the operation of the stewardship program.
(H) Fee reduction or redistribution mechanisms necessary to achieve the requirements of this chapter, in a manner that equitably distributes the costs among participating producers that reflects production and sales volumes.
(I) Actions and investments necessary to provide sufficient access to collection, recycling, composting, processing, and transportation to viable end markets.
(J) An evaluation of the availability or lack of availability of markets for recycled covered material, the need to incentivize reused products or recycled material market development, and the associated investments and actions needed to ensure that the covered products are reused or recycled and have viable and sufficient end markets.
(K) Whether allowing more than one PRO would be beneficial in meeting the requirements of the chapter.

42984.7.
 (a) A PRO shall include as a collection site under its stewardship program any local jurisdiction that offers in writing to participate in the stewardship program and agrees to comply with any PRO requirements that are consistent with that PRO’s approved plan even if the minimum thresholds described in subdivision (d) of Section 42984.10, as applicable, have been achieved.
(1) A PRO shall include the local jurisdiction as a collection site in the stewardship program within 90 days of receiving the written offer to participate, confirming that the local jurisdiction will comply with any PRO requirements that are consistent with an approved plan, even if the minimum thresholds described in subdivision (d) of Section 42984.10, as applicable, have been achieved.
(2) The PRO shall not be required to respond to offers pursuant to this paragraph until the PRO’s plan has been approved by the department.
(b) A PRO may suspend or terminate a collection site that does not comply with all applicable state, federal, or municipal laws and regulations or adhere to the rules and conditions imposed by the PRO.
(c) A collection site shall be operated and managed to ensure that covered products are collected safely and handled in accordance with all applicable state, federal, and municipal laws and regulations and the rules and conditions of the plan. Authorized collectors and authorized sorters may divert reusable covered products for sale in secondhand markets.
(d) A PRO shall require all contractors to pay at least the state minimum wage.
(e) Each participant of a PRO with an approved plan shall comply with the requirements of this chapter. The PRO shall notify the department within 30 calendar days of any the following:
(1) The end of any three-month period in which the PRO unsuccessfully attempted to obtain a fee, records, or information from a participant producer, or received incomplete or incorrect records or information.
(2) The date a producer no longer participates in the PRO’s approved plan.
(3) Any instance of noncompliance by a participant producer.

Article  4. Stewardship Plan for Covered Products Producer Responsibility Plan for Covered Products

42984.5.42984.8.
 (a) Within 12 months of the effective date of the regulations adopted by the department pursuant to Section 42984.1, 42984.2, a program operator PRO shall develop and submit to the department a complete stewardship plan, in a form and manner determined by the department, in accordance with the requirements of this chapter, for the collection, transportation, repair, sorting, recycling, and the safe and proper management of covered products in the state. No program operator PRO serving more than one producer may limit its stewardship plan for covered products to the covered products of the producers participating in that stewardship program.
(b) The department shall review the stewardship plan for compliance with this chapter and shall approve, disapprove, or conditionally approve the plan within 120 days of receipt of the plan. The department may consult with or submit a stewardship plan for review to the Department of Toxic Substances Control if the department determines it is necessary for making a determination of approval of a stewardship plan. If the department consults with the Department of Toxic Substances Control, then the department shall approve, disapprove, or conditionally approve the plan within 180 days of receipt of the plan.
(c) (1) If the department disapproves a stewardship plan submitted by a program operator, PRO, the department shall explain how the stewardship plan does not comply with this chapter and provide written notice to the program operator PRO within 30 60 days of disapproval. The program operator PRO may resubmit to the department a revised stewardship plan within 60 30 days of the date the written notice was issued, and the department shall review the revised stewardship plan within 90 60 days of resubmittal. If a revised stewardship plan is disapproved by the department, a producer operating under the stewardship plan shall not be in compliance with this chapter until the department approves a stewardship plan submitted by a program operator that covers the producer’s products.

(d)Within 24 months of the effective date of the regulations adopted by the department pursuant to Section 42984.1, a program operator shall have a complete stewardship plan approved by the department and each producer shall be subject to an approved stewardship plan in order to be in compliance with this chapter.

(2) If the department disapproves a revised plan submitted by a PRO, the department shall explain how the plan does not comply with this chapter and provide written notice to the PRO within 60 days of disapproval. The PRO shall then revise and resubmit the plan consistent with the department’s direction within 30 days, otherwise the disapproval is final and the PRO and producers may be subject to penalties.
(3) By January 1, 2030, a PRO shall have a complete plan approved by the department and each producer shall be subject to an approved plan to be in compliance with this chapter.
(d) Within three months of approval by the department, a PRO shall begin to implement the approved plan.
(e) A PRO with an approved plan shall submit any proposed substantial change to the plan to the department for approval employing the procedures set forth in this section.

(e)

(f) The approved plan shall be a public record, except that financial or sales data reported to the department by the program operator PRO is not a public record for purposes of the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) and shall not be open to public inspection. The department may release financial or sales data in summary form only so the information cannot be attributable to a specific producer or distributor or to any other entity.

42984.6.

(a)Within 12 months of the approval of the stewardship plan by the department pursuant to Section 42984.5, a program operator shall fully implement its stewardship program.

(b)An individual producer or a program operator may petition the department to investigate a noncompliant producer, and the department shall respond to the petition in a timely manner.

42984.7.

A stewardship plan for covered products shall include all of the following:

(a)The names of producers and brands of covered products covered under the stewardship plan.

(b)A description of the consultative process by which the program operator consulted with the advisory committee created pursuant to subdivision (c) of Section 42984.1 to receive advice on the development and implementation of the stewardship plan, including all correspondence between the program operator and the advisory committee and a detailed explanation of how and why the program operator decided to adopt or not adopt each recommendation by the advisory committee.

(c)(1)A description of the method to establish and administer a means for fully funding the stewardship program in a manner that equitably distributes the stewardship program’s costs among the producers that are part of the stewardship organization that reflects production and sales volumes and the cost of repairing, recycling, or otherwise managing covered products pursuant to subdivision (a) of Section 42984.4. For producers that elect to meet the requirements of this chapter individually, without joining a stewardship organization, a description of the proposed method to establish and administer a means for fully funding the stewardship program.

(2)(A)The stewardship plan shall include a stewardship program budget, for the next five calendar years, which includes a funding level and anticipated revenues and costs sufficient to cover the budgeted costs, including, but not limited to, administrative costs, operational costs, and capital costs, to operate the stewardship program in a prudent and responsible manner. Administrative costs shall include the department’s anticipated actual, reasonable, and direct regulatory costs to implement and enforce this chapter as the criteria for all the costs are defined in the regulations adopted pursuant to Section 42984.1. For purposes of this paragraph, stewardship program implementation begins once the department approves a program operator’s stewardship plan, except the department’s costs shall include actual, reasonable, and direct regulatory development costs and other startup regulatory costs incurred prior to stewardship plan submittal and approval.

(B)(i)The stewardship program shall reevaluate the budget on an annual basis and adjust allocations for the five-year budget plan as needed.

(ii)When reevaluating the budget as required by paragraph (1), the program operator shall also reconsider the distribution of costs pursuant to subdivision (a) of Section 42984.4.

(d)A description of methodologies for annually measuring, and meeting or exceeding the recycling efficiency rate or other criteria established by the department pursuant to subdivision (b) of Section 42984.1, as applicable. If a minimum recycling rate has not been established by the department, a program operator shall include a target recycling efficiency rate for covered products recycled by the program operator.

(e)A description of how the program operator will provide for a free and convenient collection system for covered products in each county of the state that meets both of the following requirements:

(1)A minimum of 10 collection sites per county or one collection site per 25,000 people, whichever is greater, except as identified in this paragraph.

(A)A county with a population of 18,000 and under, as reported annually by the Department of Finance, shall have a minimum of three collection sites.

(B)A county with a population of between 18,001 and 50,000, as reported annually by the Department of Finance, shall have a minimum of four collection sites.

(C)A county with a population between 50,001 and 100,000, as reported annually by the Department of Finance, shall have a minimum of eight collection sites.

(2)The collection sites in each county shall be spread throughout the county to facilitate widespread access and convenience.

(f)A description of how a program operator and its authorized collection sites will allow a consumer to drop off covered products at a collection site at no charge.

(g)A description of how collection sites will be authorized and managed, including all of the following:

(1)A description of the process by which local jurisdictions can request to be a collection site pursuant to Section 42984.4.

(2)A description of how the program operator will provide to collection sites at no cost the appropriate containers for covered products, training, signage, safety guidance, and educational materials.

(3)An explanation of the process by which the program operator will provide for the transport of covered products from the collection sites to an authorized sorter, or directly to an authorized repair business, or recycling facility.

(4)A description of how collection sites will be allowed to divert collected covered products to secondhand markets for reuse, and how those diversions will be tracked.

(5)A list of all proposed rules, conditions, and requirements for authorized collectors, authorized sorters, and authorized repair businesses, including a template proposed agreement for each of those types of entities, as applicable.

(6)A description of how the program operator will prioritize the use of nonprofit thrift stores, as defined in Section 6363.3 of the Revenue and Taxation Code, when establishing collection sites to meet the minimum requirements in subdivision (e).

(h)A description of the process by which collected covered products will be sorted, transported, processed, repaired, reused, and recycled following collection at collection sites, including all of the following:

(1)A description of how covered products will be handled and managed according to the waste management practices pursuant to Section 40051, including both of the following:

(A)How the stewardship plan will prioritize source reduction through the repair and reuse of collected covered products.

(B)How the stewardship plan will include the incentive payments, grants, and market development investments specified in paragraph (7) to encourage reuse and repair over recycling and composting.

(2)A description of how covered products will be sorted by authorized sorters, including a description of how the flow of covered products to and from authorized collectors, authorized sorters, authorized repair businesses, and recyclers will be tracked.

(3)A description of how the program operator will maximize the repair, reuse, and recycling of all covered products.

(4)A description of how the program operator will minimize disposal of covered products collected by the program operator.

(5)A description of how the program operator will prioritize the use of sorting, repair, and recycling facilities located closer to the point of collection to minimize transportation-related emissions and increase accountability for the ultimate disposition of the covered products.

(6)A description of how the program operator will annually assess the efficacy of the collection, sorting, and transportation process.

(7)A description of how the stewardship plan will provide incentive payments, grants, and market development investments to support the infrastructure necessary to effectively implement the plan, including how incentive payments, grants, and market development investments will prioritize infrastructure closer to the point of generation to minimize transportation emissions and increase accountability for the ultimate disposition of collected covered products.

(8)A description of how the program operator will prioritize the use of nonprofit entities in the sorting and repair of collected covered products.

(i)A comprehensive statewide education and outreach program designed to educate consumers and promote participation in the collection, repair, and recycling program offered by the program operator. At a minimum, the comprehensive statewide education and outreach program shall include all of the following:

(1)A description of the education and communications strategy being implemented to effectively promote participation in the stewardship program and provide the information necessary for effective participation by consumers, retailers, local jurisdictions, and others.

(2)An internet website that publicizes the location of collection sites and provides information to consumers on how to drop off covered products at the free and convenient network of collection sites offered by the stewardship program, including any information reasonably necessary to safely and conveniently access the collection, repair, and recycling services offered by the program operator.

(3)All signage and materials required for collection sites by the program operator, and the method by which collection sites can access replacement materials at no cost to the collection site.

(4)A description of efforts to support participation by all California communities, including a description of efforts to communicate with consumers in languages other than English.

(5)A description of strategies, goals, and metrics used to determine the success of the statewide education and outreach program.

(A)The statewide education and outreach program shall promote the safe and proper management of covered products, including source reduction, environmentally preferable purchasing, and repairing covered products. This includes education and training for authorized collectors to incentivize domestic resale of usable textile articles.

(B)The statewide education and outreach program shall not promote the disposal of covered products in a manner inconsistent with the services offered by the stewardship plan.

(C)The statewide education and outreach plan shall include information for consumers about how to avoid improper disposal of covered products.

(6)(A)A description of how the program operators will annually assess and evaluate the efficacy of the comprehensive statewide education and outreach program and periodically adjust strategies to maximize participation in the stewardship program.

(B)Any program operator serving more than one producer shall coordinate with other program operators on the education and outreach programs that they implement pursuant to this subdivision.

(7)Information to the public on secondhand markets and the source reduction benefits of reuse and repair.

(j)Coordination with, and a description of the efforts and methods used to coordinate activities with, all of the following entities who are responsive to a request from the program operator:

(1)Other program operators.

(2)Existing textile article collection, repair, and recycling programs.

(3)Community-based organizations, including nonprofit thrift stores as defined in Section 6363.3 of the Revenue and Taxation Code, that contact the program operator and that are qualified to run or support collection events.

(k)A contingency plan in the event the stewardship plan expires, is disapproved, or is revoked. The contingency plan shall describe how the stewardship plan objectives can be carried out in the absence of a plan, either by the program operator or through an entity such as an escrow company.

(l)Develop a program in coordination with other program operators to support laundries for laundering-covered products that includes funding for technology that reduces water consumption and improves microfiber filtration.

(m)A description of how counterfeit goods that are illegal for secondhand markets to resell pursuant to Section 350 of the Penal Code will be recycled.

(n)Develop strategies to address green design challenges for covered products, such as, but not limited to, compostability, reduction and removal of harmful chemicals, microfiber shedding, and mixed material blends.

(o)A description of how the program operator will minimize the negative environmental impacts of all operations associated with the plan.

42984.8.

(a)In preparing a stewardship plan pursuant to Section 42984.7, and any updates to the plan pursuant to Section 42984.9, a program operator shall engage in a consultative process with the advisory committee created by the department pursuant to subdivision (d) of Section 42489.1. A program operator shall provide sufficient time and shall consider all written recommendations from the advisory committee during the plan development process.

(b)A program operator shall consider the advisory committee’s recommendations. If the producer or stewardship organization decides not to incorporate the advisory committee’s written recommendations into the plan, the program operator shall provide a brief written explanation to the department and the advisory committee that explains the basis for the decision and also indicates whether the program operator plans to incorporate the recommendations into a subsequent stewardship plan, subsequent amendments to the plan, or a subsequent annual report.

42984.9.

(a)A program operator shall review its stewardship plan at least every five years after approval by the department and determine whether revisions to the plan are necessary.

(b)If a program operator determines that revisions to the plan are necessary, the program operator shall submit to the department a revised plan for review and approval employing the procedures set forth in Section 42984.5. The stewardship organization shall submit the revised plan pursuant to this subdivision within 90 days of the review deadline outlined pursuant to subdivision (a).

(c)If a program operator determines that no revisions to the plan are necessary, the program operator shall send a letter to the department no later than 30 days after the review deadline outlined in subdivision (a), explaining that the program operator has reviewed the plan, consulted with the advisory committee, and determined that no revisions are needed. The department may disapprove the program operator’s determination within 30 days of receipt of that determination if the department concludes that the program operator cannot implement the objectives of this chapter without revising the stewardship plan. In the event the department disapproves the program operator’s determination, the program operator shall submit to the department a revised stewardship plan for review and approval in accordance with Section 42984.5. The program operator shall submit the revised plan pursuant to this subdivision within 90 days of receipt of the department’s disapproval.

42984.9.
 The PRO shall fully implement the approved plan within 12 months of the department’s approval of the plan pursuant to Section 42984.8.

42984.10.
 A plan for covered products shall be designed to accept and manage all postconsumer covered products and shall include all of the following:
(a) The names and contact information, including email address, phone number, and mailing and physical addresses, of producers and brands of covered products covered under the plan.
(b) (1) A description of the method to establish and administer a means for fully funding the PRO in a manner that distributes the PRO’s costs among the producers that are part of the stewardship organization using an eco-modulated fee that reflects production and California sales volumes and the cost of reusing, recycling, or otherwise managing covered products pursuant to subdivision (a) of Section 42984.4.
(2) A five-year budget that establishes a funding level sufficient to operate the PRO in a prudent and responsible manner. The budget shall demonstrate how estimated revenues will cover all budgeted costs for each cost category.
(3) Budgeted costs shall include, but not be limited to, administrative costs, education and outreach costs, operational costs, capital costs, and a reserve to operate the PRO should there be unexpected events, such as losses of income, and large unbudgeted expenses in order to protect the recycling infrastructure the PRO relies upon in its plan, during any lapse in producer participation during the life of the program. The plan shall include a description of the types of activities related to each line-item cost category. The reserve cost category shall include a reserve level amount and description justifying the reserve level amount indicated.
(4) The PRO shall maintain reserve funds sufficient to operate the plan for no less than six months. If a new plan submitted by a PRO is approved by the department, the PRO shall establish its reserve and maintain the required reserve fund balance by the end of the second year of plan operation.
(5) Administrative costs shall include the department’s actual and reasonable regulatory costs, which include full personnel costs, to implement and enforce this chapter as the criteria for all the costs that are defined in the regulations adopted pursuant to Section 42984.2. For the purposes of this paragraph, PRO implementation begins once the department approves a PRO’s plan, except the department’s costs shall include actual regulatory development costs and other startup costs incurred prior to plan submittal and approval.
(c) Include quantifiable five-year and annual performance standards and metrics until the department publishes performance standards pursuant to Section 42984.11. The PRO shall amend its plan to meet the performance standards published by the department. Performance standards published by the department pursuant to this subdivision shall not be subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. Performance standards may include, but are not limited to, collection, reduction in disposal, and maximizing reuse and recycling.
(d) A description of how the PRO will provide for a free and convenient dropoff or collection system for covered products, which shall include permanent collection sites and may include temporary collection sites and mail-back options, in each county of the state that meets both of the following requirements:
(1) Provides for a minimum of 10 permanent collection sites or one permanent collection site per 25,000 people, whichever is greater.
(2) Provides for a reasonable geographic spread of permanent collection sites and an explanation for the geographic spread.
(e) A description of how collection sites will be authorized and managed, including all of the following:
(1) A description of the process by which local jurisdictions can request to be a collection site pursuant to Section 42984.7.
(2) A description of how the PRO will provide to collection sites at no cost the appropriate containers for covered products, training, signage, safety guidance, and educational materials.
(3) An explanation of the process by which the PRO will provide for the transport of covered products from the collection sites to an authorized sorter, or directly to an authorized repair business, or recycling facility.
(4) A description of how collection sites will be allowed to divert collected covered products to domestic secondhand markets for reuse, and how those diversions will be tracked through final disposition.
(5) A list of all proposed rules, conditions, and requirements for authorized collectors, authorized sorters, and authorized repair businesses, including a template proposed agreement for each of those types of entities, as applicable.
(6) A description of how the PRO will prioritize the use of secondhand markets and nonprofit thrift stores, as described in Section 6363.3 of the Revenue and Taxation Code, when establishing collection sites to meet the minimum requirements in subdivision (d).
(f) A description of the process by which collected covered products will be sorted, transported, processed, reused, and recycled following collection at collection sites, including all of the following:
(1) A description of how covered products will be handled and managed according to the waste management practices pursuant to Section 40051, including both of the following:
(A) (i) How the plan will prioritize the repair and reuse of collected covered products.
(ii) Products designed for use by infants and children under 12 years of age with components that pose a risk of detachment, thus creating choking hazards, or containing components subject to Part 1303 (commencing with Section 1303.1) and Part 1307 (commencing with Section 1307.1) of Title 16 of the Code of Federal Regulations, including, but not limited to, metallic, vinyl, or plastic snaps, zippers, grommets, closures, or appliqués may be excluded from repair and reuse by the PRO.
(B) (i) How the plan will include the incentive payments, grants, and market development investments specified in clause (vii) to encourage reuse over recycling and other methods.
(ii) A description of how covered products will be sorted by authorized sorters, including a description of how the flow of covered products to and from authorized collectors, authorized sorters, authorized repair businesses, and recyclers will be tracked.
(iii) A description of how the PRO will maximize the reuse and recycling of all covered products.
(iv) A description of how the PRO will minimize disposal of covered products collected by the PRO.
(v) A description of how the PRO will prioritize the use of sorting, repair, and recycling facilities located closer to the point of collection to minimize transportation-related emissions and increase accountability for the ultimate disposition of the covered products.
(vi) A description of the annual assessment the PRO will conduct and the metrics it will use to determine how collection, sorting, and transportation outcomes aligned with projections.
(vii) A description of how the plan will provide incentive payments, grants, and market development investments to support the infrastructure necessary to effectively implement the plan, including how incentive payments, grants, and market development investments will prioritize infrastructure closer to the point of generation pursuant to clause (v).
(g) A comprehensive statewide education and outreach program designed to educate consumers and promote participation in the program offered by the PRO. At a minimum, the comprehensive statewide education and outreach program shall include all of the following:
(1) A description of the education and communications for strategy being implemented to effectively promote participation in the stewardship program and provide the information necessary for effective participation by consumers, retailers, distributors, wholesalers, local jurisdictions, and others.
(2) A joint internet website in coordination with all other PROs, as applicable, that publicizes the location of collection sites and provides information to consumers on how to drop off covered products at the free and convenient network of collection sites offered by the PRO, including any information reasonably necessary to safely and conveniently access the collection, repair, and recycling services offered by the PRO.
(3) Signage that is prominently displayed and easily visible.
(4) All signage and materials required for collection sites by the PRO, and the method by which collection sites can access replacement materials at no cost to the collection site.
(5) A description of efforts to support participation by all California communities, including a description of efforts to communicate with consumers in languages other than English.
(6) Promotional materials or activities, or both, that explain the purpose of the PRO and the means by which it is being carried out.
(7) A description of how the PRO will encourage users to separate products that are not covered products from covered products, when appropriate, before submitting the covered products to an authorized collection site or mail-back program.
(h) A description of the strategies, goals, and metrics the PRO will use to annually assess and evaluate the efficacy of the comprehensive statewide education and outreach program.
(i) A description of how the PRO will coordinate with other PROs to avoid confusion to the public regarding program activities, including, but not limited to, education and outreach, including establishing point-of-sale messaging, a joint website, and toll-free telephone number for purposes of providing information on the program.
(j) Information to the public on secondhand markets and the benefits of reuse, including repair.
(k) (1) The statewide education and outreach program shall promote the safe and proper management of covered products, including source reduction, environmentally preferable purchasing, and reusing covered products. This includes education and training for authorized collectors to incentivize domestic resale of usable covered products.
(2) The statewide education and outreach program shall not promote the disposal of covered products in a manner inconsistent with the services offered by the plan.
(3) The statewide education and outreach plan shall include information for consumers about how to avoid improper disposal of covered products.
(l) Coordination with, and a description of the efforts and methods used to coordinate activities with, all of the following entities who are responsive to a request from the PRO:
(1) Other PROs.
(2) Existing collection, reuse, and recycling programs.
(3) Community-based organizations, including nonprofit thrift stores as described in Section 6363.3 of the Revenue and Taxation Code, that contact the PRO and that are qualified to run or support collection events.
(m) A contingency plan in the event the plan expires or is revoked. The contingency plan shall guarantee that the contracts, financial data, and other necessary authority and assets to operate the program shall vest in a trustee approved by the department. The trustee shall operate the most recently approved plan, subject to the direction of the department, until such time as a new plan is approved. Upon plan expiration or revocation of the plan, the balance of the PRO’s operating reserves collected pursuant to paragraph (4) of subdivision (b) shall be transferred to the control of the trustee within five calendar days. All documents, digital records, contracts, and files related to the operation of the plan shall be transferred to the control of the trustee within five calendar days.
(n) Develop a program to support laundries for laundering covered products that includes funding for technology that reduces water consumption and improves microfiber and microplastic filtration.
(o) A description of how counterfeit goods that are illegal for secondhand markets to resell pursuant to Section 350 of the Penal Code will be managed in the most environmentally sound manner that will mitigate the risks counterfeit goods pose to human health and the environment.
(p) Develop strategies to address design challenges for covered products, including, but not limited to, compostability, reduction and removal of harmful chemicals, microfiber and microplastic shedding, and mixed material blends.
(q) A description of how the PRO will minimize the negative environmental impacts of all operations associated with the plan.
(r) A process by which the financial activities of the organization or individual producers that are related to implementation of the plan will be subject to an independent audit consistent with generally accepted accounting principles (GAAP).

42984.11.
 (a) A producer of a covered product sold, offered for sale, imported, or distributed in or into the state shall achieve the performance standards pursuant to Section 42984.10.
(b) The department shall establish, review, and may adjust performance standards based on information included in the plan and annual reports, other information provided by the PRO, department waste characterization studies, the needs assessment conducted pursuant to Section 42984.6, and economic and any other relevant information.

42984.12.
 (a) A PRO shall review its plan at least every five years after approval by the department and determine whether revisions to the plan are necessary.
(b) If a PRO determines that revisions to the plan are necessary, the PRO shall submit to the department a revised plan for review and approval employing the procedures set forth in Section 42984.8. The stewardship organization shall submit the revised plan to the department pursuant to this subdivision at least 12 months prior to the review deadline outlined in subdivision (c). The revised plan shall include a cover letter that summarizes the revisions to the plan within 90 days of the review deadline outlined pursuant to subdivision (a).
(c) If a PRO determines that no revisions to the plan are necessary, the PRO shall send a letter to the department 12 months prior to the review deadline outlined in subdivision (a), explaining that the PRO has reviewed the plan and determined that no revisions are needed. The department may disapprove the PRO’s determination within 30 days of receipt of that determination if the department concludes that the PRO cannot implement the objectives of this chapter without revising the plan. If the department disapproves the PRO’s determination, the PRO shall submit to the department a revised plan for review and approval employing the procedures set forth in Section 42984.8. The PRO shall submit the revised plan pursuant to this subdivision within 60 days of receipt of the department’s disapproval, unless the department determines that additional time is needed.

Article  5. Financial Provisions
42984.10.

(a)No later than 90 days before a budget is submitted to the department, the department shall notify each program operator of each agency’s respective anticipated actual and reasonable regulatory costs directly related to implementing and enforcing this chapter in relation to the program operator’s activities as the criteria for those costs are defined in the regulations adopted pursuant to Section 42984.1. This may include the actual and reasonable costs associated with regulatory regulation development pursuant to Section 42984.1 and other startup activities prior to stewardship plan submittal and approval, relative to the role of the program operator’s program compared to other programs.

(b)Program operators shall, on a schedule determined by the department, pay the department fees incurred to reimburse the department for incurred costs as described in subdivision (a). The fees shall not exceed the department’s actual and reasonable regulatory costs to implement and enforce this chapter. The fees shall be paid by each producer, either individually, if the producer is complying with the requirements of this chapter individually, or through a stewardship organization.

(c)(1)The department shall deposit all moneys received from a program operator pursuant to this section into the Textile Stewardship Recovery Fund, which is hereby established in the State Treasury.

(2)Upon appropriation by the Legislature, moneys in the Textile Stewardship Recovery Fund shall be expended by the department to implement and enforce this chapter, as well as to reimburse any outstanding loans made from other funds used to finance regulation, development, and startup costs of the department’s activities pursuant to this chapter.

(3)The money in the Textile Stewardship Recovery Fund shall not be expended for any other purpose.

42984.11.

42984.13.
 (a) Each producer shall, either individually or through a stewardship organization, Each PRO shall pay all administrative and operational costs associated with establishing and implementing the stewardship program in which it participates, including, but not limited to, the cost of collection, transportation, sorting, repairing, recycling, and the safe and proper management of covered products.
(b) A PRO shall establish a method for fully funding the PRO in a manner that distributes the program’s costs among participating producers that reflects sales volumes and the eco-modulated fee criteria included in the plan pursuant to Section 42984.10. The funding mechanism shall demonstrate adequate funding for all administrative and operational costs of the program, to be borne by participating producers, and shall distribute participating producers’ costs in consideration of the cost of managing their specific covered products according to the approved plan.
(c) Within nine months of the effective date of the regulations, the department shall notify each PRO of its estimated regulatory costs as the criteria for those costs are defined in the regulations adopted pursuant to Section 42984.2, which includes full personnel costs, related to implementing and enforcing this chapter. This shall include the actual reasonable costs associated with regulation development pursuant to Section 42968.2 and other startup activities prior to plan submittal and approval.
(d) The PRO shall, on a schedule determined by the department, pay the department fees to cover the department’s incurred costs as described in subdivision (c). The fees shall not exceed the department’s actual and reasonable regulatory costs to implement and enforce this chapter.
(e) (1) The department shall deposit all moneys received from a PRO pursuant to this section into the Textile Stewardship Recovery Fund, which is hereby established in the State Treasury.
(2) Upon appropriation by the Legislature, moneys in the Textile Stewardship Recovery Fund shall be expended by the department to implement and enforce this chapter, as well as to reimburse any outstanding loans made from other funds used to finance regulation, development, and startup costs of the department’s activities pursuant to this chapter.
(3) The money in the Textile Stewardship Recovery Fund shall not be expended for any other purpose.

42984.14.
 (a) Upon approval of the PRO’s plan, the PRO shall charge each participant producer annual fees that are eco-modulated as described in the plan. The intent of the eco-modulated fee is to incentivize design choices that facilitate the achievement of source reduction goals as outlined in the plan, including reuse, repair, and recycling through reduced fees, while using malus fees to disincentivize practices and materials incongruent with the plan.
(b) The PRO shall account for the costs to ensure each covered material and covered material category meet the requirements of the chapter, including minimization of environmental and public health impacts along the entire supply chain of covered materials or covered material category.

Article  6. Records, Audits, and Reports
42984.12.

(a)A program operator shall keep board minutes, books, and records that clearly reflect the activities and transactions of the program operator.

(b)A program operator shall retain, at the program operator’s expense, an independent public accountant, certified in the United States, to annually audit the accounting books of the program operator.

(c)The program operator shall include the audit in its annual report submitted pursuant to Section 42984.13 commencing within 18 months of plan approval by the department. The department shall review the audit for compliance with this chapter and consistency with the program operator’s stewardship plan. The department shall notify the program operator 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 program operator may obtain copies of the department’s audit upon request.

(e)The department shall not publicly disclose any confidential proprietary or trade secret information in an audit conducted pursuant to this section.

42984.13.

A program operator shall annually submit to the department, in the form and manner, and by the date, determined by the department, an annual report, which the department shall make publicly available that includes all of the following information for the preceding calendar year:

(a)The program operator’s costs and revenues.

(b)(1)An estimate of the quantity of covered products sold in or into the state by the producers covered by the program operator’s stewardship plan, as determined by the best available commercial information, potentially including the application of California population data to the national sales information and the discarded covered textile articles collected for repair and recycling through the stewardship program.

(2)The estimate described in paragraph (1) shall include an estimate of covered products sold into the state, broken down by fiber type and United States Harmonized Tariff Schedule (HTS) number.

(c)A list of the stewardship program’s collection sites, by name, location, and type.

(d)The total weight of covered products, respectively, that were collected, broken down by fiber type categories.

(e)The total weight of covered products, by category, that were collected and deemed reusable by each respective authorized collector and authorized sorter.

(f)A list of each authorized sorter, authorized repair business, and textile article recycling facility used by the stewardship program, including both of the following:

(1)Name and location.

(2)Total weight of covered products handled by each location.

(g)An updated list of the names and corporate mailing addresses of producers, as described in subdivision (a) of Section 42984.7 and brands of covered textile articles covered under the stewardship plan.

(h)The total weight and number of covered textile articles sold in or into the state attributed to a producer, who is a registered participant of the program operator’s plan, which are collected in the state and repaired or recycled by the program operator during the preceding calendar year, including a description of the methodology and information used to determine and calculate these values.

(i)A complete accounting of the ultimate disposition of all covered products collected by the program operator, including the total weight of covered products that were repaired and recycled.

(j)A description of methods used to collect, transport, repair, and recycle covered products by the program operator.

(k)A description of outreach efforts and education, including, but not limited to, education and outreach provided to consumers, collection sites, manufacturers, distributors, and retailers by the program operator for the purpose of promoting the collection, repair, reuse, and recycling of covered products. This includes messaging on environmentally preferable purchasing and repairing covered textile articles.

(l)Findings from the evaluation of the comprehensive statewide education and outreach program required by paragraph (8) of subdivision (i) of Section 42984.7.

(m)A description of consultation with the California Environmental Protection Agency’s Environmental Justice Task Force and other relevant stakeholders for collecting covered textile articles for repair and recycling in areas and communities that face unique challenges.

(n)A description of actions taken by the program operator to pay all administrative and operational costs associated with establishing and implementing the stewardship program.

(o)A report on activities the program operator has undertaken to prioritize the use of sorting, repair, and recycling facilities located closer to the point of generation to minimize transportation emissions and increase accountability for the ultimate disposition of collected covered products.

(p)The progress toward attaining the goals included in the program operator’s stewardship plan.

(q)Any modifications or revisions to the stewardship plan.

(r)Any other information deemed relevant by the program operator for the department to determine compliance with the approved stewardship plan.

(s)Any other information required by regulations promulgated pursuant to Section 42984.1.

42984.14.

(a)No later than 120 days after the date the department receives the annual report submitted by a program operator pursuant to Section 42984.13, the department shall notify the program operator if the annual report is compliant or noncompliant.

(b)(1)If the department determines that the annual report is noncompliant due to failure to meet the requirements of Section 42984.13, the program operator shall resubmit a revised annual report addressing the department’s written reasons for its decision within 30 days of the department’s response.

(2)The department, within 60 days from the date a program operator resubmits a revised annual report, shall determine whether the annual report is compliant or noncompliant.

(3)If the department determines a revised annual report submitted pursuant to paragraph (1) is noncompliant, the program operator may submit only one additional revised annual report, subject to review in accordance with paragraph (2).

42984.15.
 (a) A PRO shall keep board minutes, books, and records that clearly reflect the activities and transactions of the PRO.
(b) A PRO shall include in its plan a process by which the financial activities of the organization or individual producers that are related to implementation of the plan will be subject to an independent audit consistent with generally accepted accounting principles (GAAP), which shall be reviewed by the department.
(c) The department may audit the PRO or individual producer annually.
(d) Failure of a PRO or producer, or their respective agent who holds records, to produce documents or data that is requested by the department, required to be collected or generated to carry out operation of the plan in the form and manner determined by the department, as part of a department audit, or review of a third-party audit, constitutes a violation of this chapter.

42984.16.
 (a) A PRO shall retain an independent public accountant, certified in the United States, to annually audit the accounting books of the PRO. The department shall review the independent certified public accountant audit for compliance with this chapter and consistency with the PRO’s plan and annual report, submitted pursuant to this chapter. After the department conducts its own audit, the department shall notify the PRO of any conduct or practice that does not comply with this chapter or of any inconsistencies identified in the audit. The PRO may obtain copies of the department’s audit, including proprietary information contained in the department’s audit, upon request, and withhold from disclosure confidential proprietary information to the extent allowed under Section 1040 of the Evidence Code and Section 7929.000 of the Government Code. The items submitted to the department as part of the independent audit shall include:
(1) Financial statements audited in accordance with generally accepted accounting principles (GAAP).
(2) An audit of the PRO’s compliance with this chapter.
(3) An audit of the PRO’s adherence to, execution of, and consistency with its plan.
(b) The PRO shall include the independent audit in its annual report submitted to the department pursuant to Section 42984.17 commencing within 18 months of plan approval by the department. The department shall review the audit for compliance with this chapter and consistency with the PRO’s plan.

42984.17.
 A PRO shall annually submit to the department, in the form and manner and by the date determined by the department, an annual report and make that report publicly available on the PRO’s internet website. The report shall include at minimum, all of the following information for the preceding calendar year unless otherwise specified:
(a) The PRO’s costs, according to the cost categories established in the plan, and revenues.
(b) A summary of any anticipated changes to allocations in cost categories for the next calendar year.
(c) Any changes to the distribution of a participating producer’s costs.
(d) The amounts of the eco-modulated fees based on the criteria established pursuant to subdivision (b) of Section 42984.14 and the PRO’s evaluation of the effectiveness of the eco-modulated fees.
(e) The producers participating in the plan and an updated list of the names and contact information, including email address, telephone number, and physical and mailing addresses of producers and brands of covered products covered under the plan.
(f) (1) The amount of covered products sold in or into the state by the producers covered by the PRO’s plan,
(2) The amount described in paragraph (1) shall be broken down by fiber type and Harmonized Tariff Schedule of the United States (HTS) number.
(g) A list of the PRO’s collection sites, by name, location, and type.
(h) The total weight of covered products, respectively, that were collected, broken down by fiber type categories.
(i) The total weight of covered products, by category, that were collected and deemed reusable by each respective authorized collector and authorized sorter.
(j) A list of each authorized sorter, authorized repair business, and textile article recycling facility used by the PRO, including both of the following:
(1) Name and location.
(2) Total weight of covered products handled by each location.
(k) An updated list of the names and corporate mailing addresses of producers, as described in subdivision (a) of Section 42984.10 and brands of covered products and brands of covered products covered under the plan.
(l) The total weight and number of covered products sold in or into the state attributed to a producer, who is a registered participant of the PRO’s plan, which are collected in the state and reused or recycled by the PRO, including a description of the methodology and information used to determine and calculate these values.
(m) A complete accounting of the ultimate disposition of all covered products collected by the PRO, including the total weight of covered products that were repaired and recycled.
(n) Metrics and a description of the progress toward attaining the performance standards included in the plan.
(o) A description of methods used to collect, transport, repair, and recycle covered products by the PRO, including a description of all of the following:
(1) How the PRO handled and managed covered products according to the waste hierarchy as defined in Section 40051.
(2) How the PRO maximized reuse and recycling of all covered products.
(3) How the PRO minimized disposal of all covered products collected by the PRO.
(4) Results of the PRO’s assessment of the efficacy of the collection, sorting, and transportation process.
(p) A description of how the PRO provided incentive payments, grants, and market development investments to support the infrastructure necessary to effectively implement the plan, including how incentive payments, grants, and market development investments prioritized infrastructure closer to the point of generation.
(q) A description of outreach efforts and education, including, but not limited to, the PRO’s evaluation of the efficacy of the comprehensive statewide education and outreach program pursuant to subdivisions (i) and (k) of Section 42984.10.
(r) A description of how the PRO coordinated with other PROs and entities pursuant to subdivision (l) of Section 42984.10.
(s) A report on activities the PRO has undertaken to prioritize the use of sorting and recycling facilities located closer to the point of generation to minimize transportation emissions and increase accountability for the ultimate disposition of collected covered products.
(t) Any other information deemed relevant by the PRO for the department to determine compliance with the approved plan.
(u) Any other information required by regulations adopted pursuant to Section 42984.2.

42984.18.
 (a) No later than 120 days after the date the department receives the annual report submitted by a PRO pursuant to Section 42984.17, the department shall notify the PRO if the annual report is compliant or noncompliant.
(b) If the department determines that the annual report is noncompliant due to failure to meet the requirements of this chapter, the department may require the resubmittal of the annual report or take enforcement action.

Article  7. Department Responsibilities

42984.19.
 Except where stated elsewhere, the department shall establish, review, and may adjust performance standards and the dates by which they must be achieved based on information included in the plan and annual reports, other information provided by the PRO, department waste characterization studies, needs assessment, and economic and any other relevant information. Performance standards published by the department pursuant to this subdivision shall not be subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

Article  8. Enforcement and Civil Penalties

42984.15.42984.20.
 (a) Within 24 12 months of the effective date of regulations pursuant to Section 42984.1, 42984.2, 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 of covered products for each producer.
(b) A producer that is not listed on the department’s internet website pursuant to subdivision (a) that demonstrates compliance with this chapter before the next list is posted by the department may either be added to the internet website or be provided a certification letter from the department stating that the producer of a covered product is in compliance with this chapter.
(c) (1) A retailer, importer, or distributor shall monitor the department’s internet website to determine if a producer, brand, or covered product is in compliance with this chapter for that brand producer of covered product. products.
(2) Except as provided in subdivision (d), on and after the date a stewardship plan is approved by the department pursuant to Section 42984.5, 42984.8, a retailer, importer, or distributor shall not sell, distribute, offer for sale, or import a covered product in or into the state for sale in the state unless the producer of the covered product is listed as in compliance pursuant to this section for that brand and covered product.
(d) (1) Notwithstanding paragraph (2) of subdivision (c), a retailer, importer, or distributor may sell, offer for sale, import, or distribute a covered product if, on the date the retailer or distributor sells or offers for sale the covered product in or into the state, the producer, brand, or covered product was listed as compliant on the department’s internet website.
(2) Notwithstanding paragraph (2) of subdivision (c), 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 for sale in or into the state.
(e) (1) If the department determines a producer is not in compliance with this chapter, the department shall remove the producer, along with its brands and covered products, from the list of compliant producers posted on the department’s internet website pursuant to subdivision (a).
(2) The department shall list on its internet website a producer, along with its brands and covered products, if the department subsequently determines that the producer is in compliance with this chapter.

42984.16.

(a)The department may impose an administrative civil penalty on a producer, program operator, stewardship organization, manufacturer, distributor, retailer, or importer 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. The department shall establish, through regulations adopted by the department pursuant to Section 42984.1, a process that shall include an informal hearing process by which the penalties will be assessed.

42984.21.
 (a) An administrative civil penalty up to the following amounts may be administratively imposed by the department on any person who is in violation of any provision of this chapter:
(1) Ten thousand dollars ($10,000) per day.
(2) Fifty thousand dollars ($50,000) per day if the violation is intentional or knowing.
(b) In assessing or reviewing the amount of a civil penalty imposed pursuant to subdivision (a) for a violation of this chapter, the department or the court shall consider all of the following:
(1) The nature and extent of the violation.
(2) The number and severity of the violation or violations.
(3) The economic effect of the penalty on the violator.
(4) Whether the violator took good faith measures to comply with this chapter and the period of time over which these measures were taken.
(5) The willfulness of the violator’s misconduct.
(6) The deterrent effect that the imposition of the penalty would have on both the violator and the regulated community.
(7) Any other factor that justice may require.
(c) The department shall establish, through regulations adopted pursuant to Section 42984.2, a process that shall include an informal hearing process by which the penalties will be assessed.

(b)

(d) The department shall deposit all penalties collected pursuant to this section into the Textile Stewardship Recovery Penalty Account, which is hereby created in the Textile Stewardship Recovery Fund. Upon appropriation by the Legislature, moneys in the Textile Stewardship Recovery Penalty Account shall be available for expenditure by the department on activities related to the collection and recycling of covered products, grants for related purposes, and the administration and enforcement of this chapter.

(c)This chapter does not limit or restrict the department’s enforcement authority pursuant to Chapter 6.5 (commencing with Section 25100) of Division 20 of the Health and Safety Code and its implementing regulations, if any.

(d)

(e) The Administrative Adjudication Bill of Rights, as set forth in Chapter 4.5 (commencing with Section 11425.10) of Part 1 of Division 3 of Title 2 of the Government Code, applies to hearings conducted under this chapter and mandates minimum due process.

42984.17.

(a)Upon a written finding that a producer, program operator, stewardship organization, manufacturer, distributor, retailer, or importer 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 program operator’s stewardship plan approval or require the program operator to resubmit the plan.

(2)Remove the producer, along with its brands and covered textile articles from the department’s list of compliant producers, as specified in Section 42984.15.

(3)Impose additional compliance reporting requirements.

(4)Post the noncompliant entity onto a list of noncompliant entities.

(b)If a stewardship plan is revoked pursuant to paragraph (1) of subdivision (a) or terminated by the program operator that submitted the plan, a producer no longer subject to that plan may, without being subject to administrative civil penalties pursuant to Section 42984.16, sell or offer for sale covered products in or into the state for a period of up to one year after the stewardship plan was terminated or revoked if the producer continues to operate under the most recent approved stewardship plan to which the producer was subject.

42984.22.
 (a) Upon a written finding that a producer, PRO, manufacturer, distributor, retailer, or importer site has not met a material requirement of this chapter, in addition to any other penalties authorized under this chapter, the department may take one or both of the following actions to ensure compliance with the requirements of this chapter, 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 PRO’s plan approval or require the PRO to resubmit the plan.
(2) Require additional reporting relating to compliance with the material requirement of this chapter that was not met.

42984.18.42984.23.
 (a) A producer, program operator, stewardship organization, PRO, manufacturer, distributor, retailer, or importer shall do both of the following:
(1) Upon request, provide the department with reasonable and timely access, as determined by the department, to its facilities and operations, as necessary to determine compliance with this chapter.
(2) Upon request, within 14 days, 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 five years. All reports and records provided to the department pursuant to this chapter shall be provided under penalty of perjury.
(c) (1) The department may impose administrative civil penalties pursuant to Section 42984.16 42984.21 on a producer, program operator, stewardship organization, PRO, manufacturer, distributor, retailer, or importer that fails to provide the department with the access required pursuant to this section.
(2) The department may post a notice on the department’s internet website that is maintained pursuant to Section 42984.15 42984.20 that a producer that fails to provide the department with access pursuant to this section, along with the producer’s brands and covered products, is no longer in compliance with this chapter.

42984.19.42984.24.
 After the time for judicial review under Section 11523 of the Government Code has expired, the department may apply to the small claims court or superior court, depending on the jurisdictional amount and any other remedy sought, in the county where the penalties, restitution, or other remedy was imposed by the department, for a judgment to collect any unpaid civil penalties or restitution or to enforce any other remedy provided by this chapter. The application, which shall include a certified copy of the final agency order or decision, shall constitute a sufficient showing to warrant the issuance of the judgment. The court clerk shall enter the judgment immediately in conformity with the application. The judgment so entered shall have the same force and effect as and shall be subject to all the provisions of law relating to a judgment in a civil action and may be enforced in the same manner as any other judgment of the court. The court shall make enforcement of the judgment a priority.

Article  8. Antitrust Immunity

42984.20.42984.25.
 (a) Except as provided in subdivision (c), an action specified in subdivision (b) that is taken by a program operator PRO 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 program operator: PRO:
(1) The creation, implementation, or management of a stewardship plan approved or conditionally approved by the department pursuant to Article 3 (commencing with Section 42984.4) 42984.6) and the determination of the types or quantities of covered products repaired, reused, 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 covered 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 covered products.
(3) Restricts the geographic area in which, or customers to whom, covered products will be sold.

Article  9. County Authority

42984.21.42984.26.
 This chapter does not grant a city, county, city and county, special district, or joint powers authority any new authority over solid waste hauling operations pursuant to a franchise agreement and does not affect, limit, or abrogate in any manner any franchise granted to a solid waste enterprise for the handling of solid waste.

SEC. 2.

 The Legislature finds and declares that Section 1 of this act, which adds Section 42984.5 Sections 42984.8 and 42984.16 to 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:
It is in the best interest of the public to provide limited protection of certain financial and sales data of program participants, in order to protect the interests of businesses and the privacy of their data regarding their customers.

SEC. 3.

 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.