1. (a) For an entity to be considered a responsible end market as defined in subdivision (ad) of section 42041 of the Public Resources Code, that entity shall, in its ordinary course of business, meet the following criteria:

   1. (1) The entity and the intermediate supply chain entities that handle materials it receives operate in compliance with all permitting, licensing, and other clearances that may be required to lawfully conduct collection, processing, or recycling activities under all applicable local, sub-national, national, and international laws including, but not limited to, laws concerning public health, safety, and land use.

   2. (2) The entity is transparent, which means the entity:

      1. (A) Maintains records establishing the chain of custody encompassing all intermediate supply chain entities and the end market for all covered materials accepted by the end market for at least the past three years. Such records shall document, at a minimum, every person that took possession of the discarded covered materials and the collection, processing, or recycling activities conducted by such persons with respect to the material. Notwithstanding the foregoing, a PRO or Independent Producer may, in a plan or plan amendment, propose an alternative manner for establishing transparency with respect to the intermediate supply chain entities that handle the material accepted by responsible end markets. The Department shall approve the proposal if it determines that the proposed approach will provide the same or greater degree of transparency, including availability of information concerning compliance with the Act's requirements related to responsible end markets, as otherwise provided herein.
      2. (B) Documents all complaints, penalties, violations, and other forms of enforcement action taken against the entity.
      3. (C) Maintains records of all permits, licenses, and other clearances with respect to collection, processing, or recycling activities as required by all applicable local, sub-national, national, and international laws.
      4. (D) Consents to be audited by a PRO or an Independent Producer pursuant to section 18980.4.2.
      5. (E) Provides any records identified in subparagraph (A) through (C) to a PRO or Independent Producer that requests them.
      6. (F) Upon request, discloses to the Department, a PRO, or any Independent Producers, the types of covered materials and covered material categories that it will accept.
      7. (G) Upon request, provides a PRO or Independent Producer documentation establishing that it handles materials in the manner described in paragraph (3).

   3. (3) The entity shall minimize the discharge of emissions, effluents, and materials produced by the entity, including feedstocks and residuals, and shall handle incompatible materials in the following manner:

      1. (A) For incompatible materials that can be further processed and recycled, the entity sends materials to entities that are authorized to further process and recycle the material.
      2. (B) For incompatible materials that cannot be further processed and recycled, the entity disposes of the material in a way that minimizes significant effects on the environment and risks to public health and safety.

   4. (4) The entity achieves the following, as applicable:

      1. (A) Each calendar year, the entity's average recycling yield meets or exceeds the threshold recycling yields identified by a PRO or Independent Producer in their approved plan for each material type identified in paragraphs (1) through (5) of subdivision (b) and any end markets identified following a study pursuant to paragraph (1) of subdivision (b) of section 18980.4.3. Each plan shall include a justification for each threshold recycling yield, including how the yield is informed by relevant data, if any, in the most recent needs assessment conducted by the Department pursuant to section 42067 of the Public Resources Code and other verifiable data pertaining to recycling processes.

         1. (i) For any period, average recycling yield shall be calculated by taking the total weight of material that has been recycled and dividing it by the total weight of material that has been accepted by the end market and not sent to a responsible end market for further processing.
         2. (ii) For the purpose of this subparagraph, the weight of material recycled shall be determined according to paragraph (2) of subdivision (b) of section 18980.3.2, except that “material” includes covered material and non-covered material.
         3. (iii) A separate yield rate shall be calculated for each recycling process that accepts covered material.
      2. (B) Covered material partially or wholly comprising plastic and intentionally included in the process used to generate a recycled organic product must fully biologically decompose, and the recycled organic product must meet standards necessary to be sold into the marketplace. Full biological decomposition of compostable plastic refers to the complete biodegradation and disintegration of the material under controlled composting conditions, resulting in its conversion to carbon dioxide, water, biomass, and inorganic compounds, with no visible, distinguishable, or toxic residues remaining after the composting cycle. The entity must neither dispose of undecomposed material intentionally included in the process nor send it to another entity that subsequently disposes of it, and the entity must ensure that it fully biologically decomposes, through additional processes conducted either by the entity or by subsequent entities to which the material is transferred. Covered material inadvertently included in the process that remain undecomposed shall be considered incompatible materials and are subject to paragraph (3) of subdivision (a).
      3. (C) For covered material comprising fiber or paper substrates (without a plastic component) or wholly derived from natural resources not of mineral or fossil fuel origin, the covered material intentionally included in the process used to generate a recycled organic product must biologically decompose and may be processed in a manner consistent with the management of other feedstocks to produce a marketable product that complies with standards found in sections 17868.2, 17868.3 and 17868.3.1 of Article 7 of Chapter 3.1 of Division 7 of Title 14 of the California Code of Regulations or in sections 17896.59, 17896.60, and 17896.61 of Article 6 of Chapter 3.2 of Division 7 of Title 14 of the California Code of Regulations, as applicable.

2. (b) An end market is an entity that produces and sells or transfers recycled organic product or recycled content feedstock that meets the quality standards necessary to be used for the creation of new or reconstituted products. An entity that produces and uses such material in the creation of new or reconstituted products is also an end market. An entity may be an end market for some materials and an intermediate supply chain entity for others. For example, if an entity transfers a portion of covered material it accepts to other entities for further processing, the entity is an intermediate supply chain for that portion, but an end market for the covered material it retained.

   1. (1) For material made of glass, the end market is the entity that first produces glass feedstock that meets the quality standards necessary to be used in lieu of virgin material for the creation of new or reconstituted products. Such end markets include, but are not limited to, the glass beneficiation plant that produces cullet.
   2. (2) For material made of metal, the end market is the entity that first produces metal feedstock that meets the quality standards necessary to be used in lieu of virgin material for the creation of new or reconstituted products. Such end markets include, but are not limited to, entities that smelt metal and produce ingots, sheets, and coils.
   3. (3) For material made of paper or non-plastic fiber, the end market is the entity that first produces paper feedstock that meets the quality standards necessary to be used in lieu of virgin material for the creation of new or reconstituted products. Such end markets include, but are not limited to, the beneficiation wastepaper plant or entity that re-pulps the material into a pulp product.
   4. (4) For material made of plastic, the end market is the entity that first produces plastic feedstock that meets the quality standards necessary to be used in lieu of virgin material for the creation of new or reconstituted products. Such end markets include, but are not limited to, entities that create pellet.
   5. (5) For material made of wood, the end market is the entity that first produces wood feedstock that meets the quality standards necessary to be used for the creation of new or reconstituted products. Such end markets include, but are not limited to, entities that chip and grind the material, including, but not limited to, C&D wood debris chipping and grinding operations, and facilities as described in section 17383.3.
   6. (6) Entities that convert material into a recycled organic product are end markets for such material. Such entities include, but are not limited to, compostable material handling operations or facilities described in paragraph (12) of subdivision (a) of section 17852 and in-vessel digestion facilities and operations described in paragraphs (15), (16), and (19) of subdivision (a) of section 17896.2.
   7. (7) For covered material that is eligible for multiple types of end markets, any of the eligible end markets shall be deemed valid.
   8. (8) For a covered material item made of a material type that is not represented in paragraphs (1) through (6), the end market shall be an end market established through a study conducted by a PRO or Independent Producer pursuant to paragraph (1) of subdivision (b) section 18980.4.3.

Note: Authority cited: Sections 40401, 40502, 42041, 42057 and 42060, Public Resources Code. Reference: Sections 42041, 42051, 42051.1, 42057, 42061 and 42067, Public Resources Code.

History

1. New article 4 (sections 18980.4-18980.4.3) and section filed 5-1-2026; operative 5-1-2026 pursuant to Government Code section 11343.4(b)(3) (Register 2026, No. 19).