The 3rd meeting of the Interim Joint Committee on Natural Resources and Environment was held on Friday, September 25, 2009, at 1:00 PM, in Room 131 of the Capitol Annex. Representative Jim Gooch Jr., Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Representative Jim Gooch Jr., Co-Chair; Senators David E. Boswell, Bob Leeper, Dorsey Ridley, John Schickel, Brandon Smith, Katie Kratz Stine, Robert Stivers II, Gary Tapp, and Johnny Ray Turner; Representatives Hubert Collins, Tim Couch, Keith Hall, Tim Moore, Don Pasley, Kevin Sinnette, Fitz Steele, and Jim Stewart III.
Guests: Tim Hubbard, Bruce Scott, Tom Heil, and Chris Fitzpatrick, Kentucky Department for Environmental Protection; James “Jitter” Allen, Republic Industries; Perry and Ann Sebaugh and Betty Williamson, Kentucky Woodlands Owners Association; Larry King, Sims Recycling; and Rusty Cress, Kentucky Association of Manufacturers.
Legislative Guests: Representatives Rocky Adkins and Ancel Smith.
LRC Staff: Tanya Monsanto, Stefan Kasacavage, and Kelly Blevins.
Rep. Gooch announced the meeting had a quorum and asked for a motion on the August meeting minutes. After a motion and a second, the August minutes were approved. Rep. Gooch welcomed Rep. Ancel Smith, who is awaiting approval to be named as a House member to the committee and invited members of the Energy and Environment Cabinet to present testimony on e-scrap.
Tim Hubbard stated that this is an important environmental issue. Some call the material e-waste, but e-scrap is more appropriate because of the market potential and the raw materials in the product. E-scrap does contain hazardous materials such as lead and mercury and valuable materials including copper, platinum, cadmium, and precious metals. There are several ways that e-scrap is disposed of including unregulated disposal, permitted facility disposal, storage and recycling. Unregulated disposal is a big problem because of the lead and mercury leaching into the ground water. Permitted facility disposal is better but the value of the scrap material is lost. Many companies currently store the material but this is a problem because of space limitations. Recycling is where the nation needs to go because it resolves the environmental problems and promotes recovery of the valuable materials.
The U.S. Environmental Protection Agency reports that 2 percent of the US waste stream may be e-scrap. There are 5.1 million tons of waste and 100 thousand tons available for e-scrap recycling. The cabinet needs more data regarding e-scrap waste collection and recycling in order for it to make better policies regarding e-scrap. Small quantity generators are exempt from regulated disposal and not all recyclers are registered. One good note is that the flood of televisions anticipated after digital conversion has not materialized.
There is an all agency statewide contract, and 1,000 tons of e-waste have been collected. All agencies including public universities and local governments can participate, although it is not mandated for counties to recycle e-scrap. Bruce Scott stated it would be $50 per ton for disposing of e-scrap in landfills but the state is actually making money for recycling the e-scrap. The cabinet identified the number of recyclers in and out-of-state handling e-scrap and one of the problems with running a program is unregistered recyclers such as scavengers. Scavengers will take e-scrap to obtain the valuable materials but not comply with best management practices and environmental laws.
The cabinet supports a step-by-step approach to implementing an e-scrap program. There is no need for restrictive rules. The cabinet advocates a moderate position with respect to reporting standards and government controls. Specific program features for an e-scrap program include (a) producer registration and reporting; (b) requirements to take back other brands; (c) dealers and processors register and meet operating standards; (d) recyclers report e-scrap processed and obtain financial assurance; and (e) 3 year, phased-in landfill ban on e-scrap. There would be a need to amend requirements on hazardous waste generators to separate them from e-scrap operations.
Sen. Leeper asked the cabinet to further explain the take back for other brands. Tom Heil stated there are 19 states with e-scrap laws. Most encourage the dealers to take back other brands, but it is optional. Commissioner Scott remarked that if it was proposed as a required element of a manufacturer take back program, the cabinet would not support it. Tom Heil continued that the cabinet would like to obtain more data on take backs.
Rep. Gooch next invited Larry King with Sims Recycling Solutions to speak about take back programs across the nation. He described what industry has learned through the process. Mr. King described Sims Recycling Solutions as a global electronics recycler and also stated that he worked with Hewlett Packard. He stated there are two types of e-scrap manufacturer programs one of which is producer responsibility. Mr. King described producer responsibility in detail.
No two states of the 19 states with e-scrap legislation have similar language, begging the question whether e-scrap legislation is necessary and which program the state should choose. It may be necessary because it is difficult to change consumer behavior. The consumer, not the recycler, owns the material to be discarded. One must examine the goal of the legislation. If the goal is to keep e-scrap out of landfills then the second system is best, but be aware of unintended consequences. Some states obligation to collect is based on sales and that encourages them to get more products out to market and then back into recycling. It is better to keep it in use rather than returning to the recycling stream however.
There are some similarities in the process. First, all stakeholders need to be at the table. The state has enforcement power. There needs to be a level playing field. Second, labeling should be required and retailers should only sell those products in compliance. Finally, there should be penalties for noncompliance. Most penalties enacted are monetary, but that is not as powerful as restricting the manufacturer’s right to sell. Also state should require recyclers and manufacturers to report. Some states include collectors in the reporting requirements. It is hard to sign up collectors however because many do not have the administrative support to field reporting requirements.
Complexity makes the cost of legislation go up. There should be recycling standards and a couple of states actually created their own standards. However, adopting unique standards creates inconsistencies and confusion. Use of national standards such as the R-2 which includes environmental assurance a closure plans is best. In terms of program costs for the state, resource requirements vary from 2 to 100 full time equivalents. California has over 100 fulltime equivalents and it is the highest per capita producer responsibility state. The lowest cost is a producer responsibility state too.
What is known is that “one size fits all” does not work in e-scrap. This has to do with various industry differences such as the lifespan of the device, the sales channels for the product and the stability of the original equipment manufacturer. There are also going to be urban and rural differences and preferred elements of legislation should include underserved households and consumer markets. Original equipment manufacturers may want to contract with a recycler of choice and most audit their operations. Manufacturers want to prevent business ties with unscrupulous recyclers and do not want to be held accountable for consumer behavior. For example, if consumers discard rather than recycle, the manufacturer does not want to be responsible. Manufacturers want a high environmental standard and recyclers want a direct relationship with the manufacturer.
Rep. Pasley asked if there are measures to protect the information on hard drives, PDAs, and other devices, and whether there should be a penalty for recyclers who misappropriate information. Mr. King stated that Sims Recycling uses the Department of Defense standard which is to destroy the hard drive. Sims grinds the drives which is the only way to ensure protection. Consumers should drill a hole through the drive or hit it with a hammer to ensure protection before recycling. No state has a penalty but this is a relatively new issue. Currently, the consumer is responsible for data left on the drive which forces the consumer to be proactive before recycling.
One representative asked if it is like the fee paid to dispose of tires and whether it should be performed like waste tires. Mr. King responded that California charges at the point of purchase and that fee has now gone to $12.00. No other state has charged a fee, and tires, oil, and electronics are different in how long the material can be held before disposing of it. The biggest impetus to recycling in the European Union is that the culture is different. In Europe, a covered device is anything with a plug. They recycle 3 times more than the United States. It is expensive to dispose of computers and it costs anywhere between 25 and 35 cents per pound to process a monitor.
Rusty Cress with Kentucky Association of Manufacturers spoke next. He described 3 different legislative proposals on e-scrap over several sessions. One was done by Rep. Webb and two others by Sen. Harper-Angel. KAM hopes there is an e-scrap bill in 2010 with the proper agreed upon provisions. KAM contends a bill should contain the following items. It should focus on the consumer. It should leave business contract alone. Mandatory take back programs should be only on large manufacturers and all requirements of law should apply prospectively, not retrospectively. There will be orphan waste as a separate issue. A landfill ban should be phased in over 5 years rather than 3 years. Government oversight should be minimal but reporting is reasonable. KAM recommends 2 one year studies on the issue to determine effectiveness and another study to deal with orphan wastes.
Rep. Gooch asked if there are materials improperly disposed of causing problems currently, and whether one industry is being singled out over others. Mr. Cress responded that KAM is focused on this issue because it is wanted. The information technology industry has taken the lead on this issue. Mr. King commented that there are materials of concern and there are reasons for the hazardous materials in these products. However, that does not negate the need or value of recycling them.
Rep. Gooch thanked the presenters and then asked members of the Kentucky Woodland Owners Association to testify. Mr. Jeff Stringer, John Obrikey and Betty Williamson testified on a series of legislative proposals desired for the 2010 session. The three legislative issues for the 2010 session are reauthorization of the forest health task force, reduction of timber theft and biomass incentives that encourage use of woody biomass. Dr. Obrikey discussed the reauthorization of the forest health task force. It would address issues of quarantine, disease outbreaks and insect infestations. There is a need for legislation to establish and endorse the forest health task force so that it can apply for federal dollars. Funding would be good too but we understand these are tight budgetary times.
Dr. Stringer stated there is civil law that allows victims of timber theft to be compensated but criminal law should set better penalties. It should balance so as not to harm for unintended trespass. There are two options: reinforce the bad actor provisions of the master logger laws; and create a special unit to aid in evidence gathering of timber theft. A timber theft arson unit within the Division of Forestry would be one way of approaching this problem.
Ms. Williamson discussed biomass and renewable fuels stating that there is a need for incentives for owners to better manage their forests. The Kentucky Division of Forestry needs to be stronger. Incentives would include funding the Division of Forestry rather than the Department of Agriculture and incentives to assist loggers and industry directly.
Rep. Gooch thanked the presenters and remarked that forests can reduce carbon from power plants. There has been substantial loss of forested land since the beginning of the industrial revolution.
Rep. Moore asked if there will still be timber theft problems even if the law is strengthened and whether it is trying to exact compliance by threat. Dr. Stringer replied that there will still be problems and that they hope for deterrence through stiffer penalties.
Rep. Sinnette asked whether logs are going out of state and whether it would be possible if the sawmill could take only marked logs for development of evidence. Dr. Stringer stated most of it is local and that marked logs have been a discussion in past ideas about legislation.
Sen. Leeper asked for the definition of woodland owner. Dr. Stringer reported that it is anyone with 1 acre and up. Sen. Leeper asked about problems from other invasive pests. Dr. Obrikey replied that there are many invasive plants coming into the area and there is the problem of the gypsy moth.
Sen. Leeper asked about the health of trees after the 2009 ice storm. Dr. Stringer stated that it depends on the degree of damage. Some species will recover quickly while others will take a long time. Overall they are weakened which makes them susceptible to disease and insect infestations.
Rep. Gooch remarked that in the fall we will have to examine the damage again. He then called for a motion to adjourn. After a motion and a second, the committee adjourned.