California recently adopted the Responsible Textile Recovery Act (SB 707). This Act will establish an extended producer responsibility program for apparel and textile articles that will require designated producers to pay fees based on the volume of covered products sold in California and the environmental sustainability of those products. While many states have passed EPR legislation targeting packaging waste, the Act is the first EPR law in the United States specific to apparel and textiles.
The stated intent of the Act is to establish a statewide EPR program for apparel and textile articles that emphasizes repair and reuse, and minimizes generation of hazardous waste, generation of greenhouse gases, environmental impacts, environmental justice impacts and public health impacts. The Act seeks to accomplish these goals by increasing the amount of post-consumer 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 California's hierarchy for waste management practices.
Covered products
The Act applies to apparel and textile articles. These terms have specific meanings and only specified goods are included.
"Apparel" is defined as including only undergarments, shirts, pants, skirts, dresses, overalls, bodysuits, costumes, vests, dancewear, suits, saris, scarves, tops, leggings, school uniforms, leisurewear, athletic wear, sports uniforms, swimwear, formal wear, onesies, bibs, footwear, handbags, backpacks, knitted and woven accessories, jackets, coats, snow pants, ski pants and everyday uniforms for workwear. Personal protective equipment, military clothing items or certain textile products designed for absorption are expressly excluded.
"Textile articles" are defined as including only blankets, curtains, fabric window coverings, knitted and woven accessories, towels, tapestries, bedding, tablecloths, napkins, linens and pillows. Single-use products including paper towels, paper napkins, toilet paper, facial tissue and wet or dry wipes are expressly excluded.
Covered producers
EPR programs seek to shift the financial burden of disposal and end-of-life management of various products to the producers of those products. Similar to other EPR schemes, the Act has a tiered system for establishing which entities are producers in given scenarios.
Under the Act, a "producer" is the first entity that meets one of the following criteria:
- The entity that (1) manufactures the covered product and (2) owns or is the licensee of the brand or trademark under which the product is sold, offered for sale or distributed in or into California.
- If there is no person in California that is the producer under the prior bullet, the owner of the brand or trademark, or if that person is not in California, the exclusive licensee of the brand or trademark under which the covered product is sold, imported for sale, offered for sale or distributed for sale in or into California.
- If there is no person in California that is the producer under either of the prior bullets, the entity that imports the covered product into California for sale or distribution.
- If there is no person in California that is the producer under any of the prior bullets, the distributor, retailer or wholesaler who sells the product in or into California.
The sale of a covered product will be deemed to occur in California if the covered product is delivered to a consumer in California.
Certain third-party sellers on online marketplaces can be subject to the same reporting and fee obligations as producers under the Act. The Act will require online marketplaces to notify the California Department of Resources Recycling and Recovery (CalRecycle) and the producer responsibility organization of all third-party sellers with over $1,000,000 in covered product sales on the online marketplace in the preceding year, unless the third-party seller did not have any sales in California during that period. For these purposes, sales include only transactions through the online marketplace where the payment is processed by the marketplace directly or through its payment processor. The Act prohibits online marketplaces from selling or distributing products in California unless the online marketplace, or another importer or distributer, is in compliance with the Act with respect to those products.
Under the Act, entities are not considered to be producers if they have less than $1,000,000 in annual aggregate global turnover (together with their controlled affiliates) or exclusively sell secondhand products.
Producer responsibility organization
The EPR program will be administered by a third-party producer responsibility organization (PRO), which will manage the stewardship program for collecting, sorting, transporting, repairing and recycling post-consumer covered products. The Act requires producers of covered products to join the PRO for purposes of complying with the Act. Producers will be subject to civil penalties if they are not part of a PRO and all covered products are not accounted for in an approved PRO plan.
The PRO will be selected by CalRecycle. As part of the selection process, the PRO is required to develop a producer responsibility plan. The plan is required to address the collection, transportation, repair, recycling and safe and proper management of covered products. Among other things, the PRO will be required to provide in the plan for a free and convenient drop-off or collection system for covered products, which must include permanent collection sites (and may include temporary collection sites and mail-back options), in each California county. The number of permanent collection sites is based on population.
The plan must be submitted to CalRecycle for its approval. A PRO must review its plan at least every five years after approval and determine whether revisions to the plan are necessary.
The PRO must have a governing board consisting of producers that are diverse in size and type and that represent the diversity of covered products placed in the market by those entities. The governing board also may include ex officio members involved in the collection, sorting, repair, reuse, recycling or management of covered products.
After January 1, 2035, CalRecycle may approve additional PROs if it determines that would be beneficial in satisfying the requirements of the Act.
Key dates
- January 1, 2026: Prospective PROs must submit an application to CalRecycle.
- March 1, 2026: CalRecycle must approve a PRO.
- July 1, 2026: Covered producers must join the PRO.
- July 1, 2028: CalRecycle must adopt implementing regulations, which cannot take effect prior to this date.
- The PRO or covered producers must provide a list of covered product brands to CalRecycle within 30 days after the effective date of the implementing regulations. The list must be updated by January 15 of each year or upon request by CalRecycle.
- July 1, 2030: The PRO must have a complete, approved plan for meeting the objectives of the Act.
- Within three months after approval by CalRecycle, the PRO must begin implementing the plan, and the plan must be fully implemented within twelve months after approval.
EPR fees; producer compliance
The PRO is to be funded by producers through a per unit eco-modulated fee that reflects California sales volumes, existing producer collection, repair, reuse and recycling programs and the cost of reusing, repairing, recycling or otherwise managing covered products. The fee criteria are to be set out in the PRO's plan. The PRO will charge each producer annual fees in accordance with the plan.
Eco-modulated fee adjustments are meant to incentivize producers to use sustainable practices and minimize waste and disposal costs throughout the lifecycle of their products. Reduced fees are intended to incentivize design choices that facilitate reuse, repair and recycling.
The Act will require CalRecycle to post on its website a list of all producers that are in compliance with the requirements of the program. This must be done within 12 months of the effective date of the regulations adopted under the Act and on or before July 1 of each year thereafter. CalRecycle also may post a notice on its website that a producer is no longer in compliance with the Act. CalRecycle may audit the PRO or individual producers annually.
Retailers, importers, distributors and online marketplaces will be required to monitor the compliant producer list to determine if a producer, brand or covered product is in compliance with the Act. After the PRO's plan is approved, a retailer, importer, distributor or online marketplace generally may not sell, distribute, offer for sale or import a covered product in or into California for sale in the state unless the producer of the covered product is listed as compliant for that brand and covered product, unless the retailer, importer, distributor or online marketplace has fulfilled the obligations for those covered products.
Any person that is found to be noncompliant may be subject to administrative civil penalties of up to $10,000 per day, or $50,000 per day if the violation is intentional or knowing.
Six take-aways
- As a threshold matter, apparel and textile article manufacturers, brand owners and licensees, importers, distributors, retailers and wholesalers should determine whether they are a producer under the Act.
- Be mindful of the producer requirement to join the PRO and the date by which this must be done.
- Although there are no current compliance requirements, the Act is expected to have a significant impact on larger producers, as well as companies in the apparel and textiles value chain that are not producers. Producers and other parts of the value chain should begin to develop a strategy for mitigating the impacts of the Act. Among other things, this may include pursuing opportunities to proactively enhance the sustainability attributes of products and materials.
- The California Act is the first requirement of its type in the United States, but not likely to be the last. In addition, outside the United States, France, the Netherlands, Hungary and Latvia already have mandatory EPR scheme for textiles. Textile EPR schemes are expected in additional EU countries.
- More generally, EPR requirements not specific to apparel and textiles are being adopted across many jurisdictions, including in the United States.
- Many companies are just beginning to assess the potential impacts of EPR requirements. Given the potentially significant impacts, it will be increasingly important for larger companies to have a centralized approach for monitoring and managing these requirements.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
