1. (a) Prior to approval of an initial plan and for the two years following that approval, a PRO shall charge all participant producers a fee based on the following items as set forth in subdivision (b) of section 42053 of the Public Resources Code:

   1. (1) Estimated costs of implementing the plan, including the costs to cover the environmental mitigation requirements of section 42064 of the Public Resources Code.
   2. (2) Operating costs of the PRO.
   3. (3) Costs of completing the needs assessment.
   4. (4) Costs to reimburse the Department, including the full personnel costs related to the administration, implementation, and enforcement of this chapter and the Act. Costs shall include labor, fringe benefits, travel, equipment, supplies, and contracts, as well as costs calculated using section 9213.1 of the State Administrative Manual, including for general administration, budgeting, accounting, business services, training, and legal.
2. (b) Beginning two years following the approval of a PRO's plan, the PRO shall charge each participant producer pursuant to subdivision (a) of section 42053 of the Public Resources Code. Such fees shall be based on the fee schedule described in subdivision (c) of section 42053 of the Public Resources Code and eco-modulated as described in the plan. A PRO shall account for the costs to ensure covered materials and covered material categories meet the requirements of this chapter, including minimization of environmental and public health impacts of covered material and the end-of-life management of covered material.
3. (c) Notwithstanding subdivisions (a) and (b), the PRO may charge each participant producer annual fees pursuant to subdivision (a) of section 42053 of the Public Resources Code at any time following approval of the initial plan if the PRO determines it has sufficient data to establish a fee schedule described in subdivision (c) of section 42053 of the Public Resources Code and to eco-modulate fees as described in the plan.
4. (d) If a PRO, pursuant to subdivision (f) of section 42053 of the Public Resources Code, charges a participant producer a special assessment, the PRO shall include the special assessment in the fee schedule for participant producers.

5. (e) In setting the individual assessments pursuant to paragraph (1) of subdivision (c) of section 42053 of the Public Resources Code, a PRO shall:

   1. (1) Determine the base fee rate for each covered material category.

      1. (A) In setting the base fee rates, a PRO shall include a justification of each rate, or of the methodology used to derive rates. The justification shall address each factor specified in subdivision (d) of section 42053 of the Public Resources Code. The justification for fees shall be informed, at a minimum, by the relevant data, if any, in the most recent needs assessment, the most recent material characterization study conducted pursuant to subdivision (a) of section 42061 of the Public Resources Code, source reduction data, data pertaining to recycling rates, and data pertaining to the biodegradation or disintegration rates of compostable covered materials.
      2. (B) If a PRO's justification contradicts the results of the most recent needs assessment or material characterization studies, the justification shall explain the discrepancy. The PRO shall provide evidence, such as records and data or other information, supporting the explanation.
      3. (C) A PRO shall set base fee rates for covered material categories to account for investments or other expenditures necessary to develop responsible end markets for such covered material categories, implement source reduction measures for such covered material categories, or shift to reuse and refill systems.
      4. (D) A PRO may set an alternative reduced base fee rate for a select covered material category if an alternative collection program is utilized. The alternative reduced base fee rate shall consider the measurable performance of the alternative collection program relative to the statewide performance of curbside collection for those same materials. Measurable performance factors to consider include, but are not limited to, the percentage of materials recovered by the program, contamination rate, recycling rate, and environmental impacts. The alternative reduced base fee rate shall only apply to producers who utilize an alternative collection program for a specific covered material category. If a PRO sets an alternative reduced base fee rate, the PRO shall in its justification, pursuant to subparagraph (A), explain how the alternative collection program's measurable performance warrants a reduced base fee rate.

   2. (2) Calculate the total individual assessment.

      1. (A) A PRO shall first calculate the base fee for each covered material category applicable to the producer. The base fee for a covered material category shall be equal to the [base fee rate of a covered material category (BFRCMC) times the [weight of covered material of that covered material category sold, distributed, or imported in or into the state within the previous calendar year (WCMSDI)]: BFRCMC x WCMSDI = Base Fee.
      2. (B) The total individual assessment shall be the sum of the base fees of each covered material category.

6. (f) In setting any adjustments pursuant to paragraph (2) of subdivision (c) of section 42053 of the Public Resources Code, which includes malus fees charged to a producer and credits awarded to a producer, a PRO shall include a justification.

   1. (1) The justification shall be done by covered material category and shall address each factor specified in subdivision (e) of section 42053 of the Public Resources Code. The justification for malus fees and credits shall be informed, at a minimum, by the relevant data, if any, in the most recent needs assessment, the most recent material characterization study conducted pursuant to subdivision (a) of section 42061 of the Public Resources Code, source reduction data, data pertaining to recycling rates, and data pertaining to biodegradation or disintegration rates of compostable covered materials.
   2. (2) If a PRO's justification for malus fees or credits is in contradiction with the results of the most recent needs assessment or material characterization studies, the PRO in its justification shall provide an explanation of the discrepancy. A PRO shall provide supporting documentation and any data to justify the discrepancy.
7. (g) In assessing fees pursuant to paragraph (5) of subdivision (c) of section 42053 of the Public Resources Code, a PRO shall develop a formula to calculate each participant's market share and corresponding environmental mitigation surcharge assessment. Pursuant to subdivision (f) of section 42064 of the Public Resources Code, the formula shall be based on the number of plastic components and weight of plastic covered material a producer offers for sale, sells, distributes, or imports in or into the state. The weight of plastic covered material shall be measured in accordance with paragraph (15) of subdivision (a) of section 18980.1. The PRO shall provide the formula to the Department. The Department shall annually notify the PRO of the PRO's share of the annual environmental mitigation surcharge, accounting for any amount owed by Independent Producers.
8. (h) For purposes of accounting for when recycling or composting is made “more difficult by incorporation of specific elements” pursuant to paragraph (2) of subdivision (d) of section 42053 of the Public Resources Code, the publications incorporated into a plan pursuant to subdivision (j) of section 18980.8 shall apply. An element of covered material shall be considered to make recycling more difficult according to the design guide incorporated pursuant to paragraph (1) of subdivision (j) of section 18980.8 if, as described in the design guide, the element “requires test results” or otherwise prevents the covered material from being considered “preferred.”
9. (i) Pursuant to paragraph (4) of subdivision (e) of section 42053 of the Public Resources Code, a PRO shall charge a malus fee to producers who use covered material that contains a chemical listed on the list established pursuant to section 25249.8 of the Health and Safety Code.

10. (j) Pursuant to paragraph (7) of subdivision (e) of section 42053 of the Public Resources Code, a PRO shall provide a credit for producers who use plastic covered material derived from renewable materials.

    1. (1) “Renewable materials,” for the purposes of paragraph (7) of subdivision (e) of section 42053 of the Public Resources Code, means materials that are wholly derived from natural resources that are not of mineral or fossil fuel origin, without resulting in the net depletion of any of the resources. Examples of potentially renewable material include those derived from wood, mycelium, algae, or plants such as cotton, corn, sugar cane, or wheat.
    2. (2) When awarding a credit to participant producers, the PRO shall in its justification specify the feedstocks used to produce the covered material.

Note: Authority cited: Sections 40401, 40502 and 42060, Public Resources Code. Reference: Sections 42053 and 42064, Public Resources Code.

History

1. New section filed 5-1-2026; operative 5-1-2026 pursuant to Government Code section 1343.4(b)(3) (Register 2026, No. 19).