When the Lead-Acid Battery Recycling Act (the Act) came into effect in April of 2017 with the passage of Assembly Bill 2153 (2016), we wrote about it extensively in our laws publication that was delivered to your inbox (or mailbox) at the beginning of 2017. Shortly before its effective date, we wrote about the topic again in the February/March 2017 issue of Transmission in an article called “The Battery Fee, Refundable Deposit, and the Board of Equalization (Yes, Another Tax).” The law requires dealers to collect $1 from every customer who purchases a new lead-acid battery at retail and to remit it to the California Department of Tax and Fee Administration (CDTFA) to deposit into the Lead-Acid Battery Cleanup Fund.
Additionally, manufacturers must remit $1 to the CDTFA for each lead-acid battery sold at retail or to a dealer, wholesaler, or distributor. The manufacturer Battery Fee was sunsetting on March 31, 2022, and by April 1, 2022, the customer Battery Fee was to increase to $2. It has been two and a half years since these fees were put in place, and the state legislature, in its infinite wisdom, now believes that the fees will be insufficient to cover all the expenses incurred for the cleanup efforts.
That is why Assembly Member Christina Garcia, author of the initial bill, introduced Assembly Bill 142 this past legislative session. Rather than sunsetting on March 31, 2022, the manufacturer Battery Fee will increase to $2 in perpetuity effective April 1, 2022. The bill was signed by Governor Gavin Newsom earlier this month and will take effect immediately as an urgency statute.
How does this affect me?
The answer: It doesn’t affect you to a certain extent. The Battery Fee that you charge the customer for the sale of every lead-acid battery and remit to the CDTFA is still $1 and will still increase to $2 on April 1, 2022. The processes you already have in place at your service department (or repair facility) do not change one bit. However, in revisiting the battery fees statutes and modifying them solely for the fact that the state is not collecting enough money, the state is sending smoke signals to tell us that enforcement will follow closely after that. We have it on very good authority that the Department of Toxic Substances Control (DTSC) will be conducting inspections all over the state to make sure all affected parties comply with the requirements of the Act.
What should I do?
Revisit the processes you have in place at your dealership (specifically your service department and parts department) to ensure compliance with the Act and that you are registered with the CDTFA. In addition to collecting the fee and the refundable deposit, make sure you are posting the notice either at the point of sale (i.e., near the cashiers at the parts counter or at each service writers’ area in the service department) or on the parts receipt or invoice. The notice should say the following:
This dealer is required by law to charge a nonrefundable $1.00 California battery fee and a refundable deposit for each lead-acid battery purchased.
A credit of the same amount as the refundable deposit will be issued if a used lead-acid battery is returned at the time of purchase or up to 45 days later along with this dealer’s receipt.
Note that the facility can establish the refundable deposit, and the facility may retain up to 1.5% of the fee as cost reimbursement.