1. (a) The Closure and Transfer Plan pursuant to subdivision (f) of section 42051.1 of the Public Resources Code shall be self-executing as of either the effective date of dissolution of a PRO or termination of its plan, as proposed in the notice provided to the Department pursuant to paragraph (7) of subdivision (b), or five calendar days after actual revocation. The Closure and Transfer Plan shall include the following:

   1. (1) Information pertaining to the trustees or escrow agents that will implement the Closure and Transfer Plan, if executed, including the following:

      1. (A) Primary and secondary contact names, contact information, and affiliations for the initial trustee or escrow agent who will implement the Closure and Transfer Plan.
      2. (B) Primary and secondary contact names, contact information, and affiliations for the successor trustee or escrow agent who will implement the Closure and Transfer Plan if the initial trustee or escrow agent is unable to serve.
      3. (C) A statement acknowledging that the Department will serve as the Trust Protector or Escrow Account Protector and the Beneficiary of the trust or escrow account, and may provide direction to the trustee or escrow agent and may remove and replace a trustee or escrow agent at its discretion.
      4. (D) A description of the credentials, qualifications, requisite industry knowledge, financial expertise, and skill in contract administration necessary for the trustees or escrow agents to fulfill all the duties required by the Act, these regulations, and the Closure and Transfer Plan and an indication of their consent to be appointed as a trustee or escrow agent.
      5. (E) Names and roles of key entities who may be affected by or have responsibilities pursuant to the initiation of the Closure and Transfer Plan. Such entities include, but are not limited to, participant producers, intermediate supply chain entities, local jurisdictions, recycling service providers, responsible end markets, and any other entity contracted with the PRO.
      6. (F) A description of how the trustee or escrow agent will receive payment for its services; for example, out of a specifically budgeted amount included in the Closure Fund.

   2. (2) An explanation of how the PRO will ensure that the Closure and Transfer Plan can be fully executed through a trustee or escrow agent according to the requirements of this chapter, with the direction of the Department, including how the PRO will:

      1. (A) Empower the trustee or escrow agent to satisfy the obligations of the PRO and implement the Closure and Transfer Plan.
      2. (B) Facilitate the trustee's or escrow agent's transfer of administration to the successor PRO or PROs.
      3. (C) Ensure that all contracts and other agreements are fully assignable to and assumable by the trustee or escrow agent and fully assignable by the trustee or escrow agent to the successor PRO or PROs, and assumable by the successor PRO or PROs.

   3. (3) Documentation that demonstrates the PRO has created and will maintain the Closure Fund, a trust fund or escrow account established pursuant to section 42056 of the Public Resources Code, separately from the PRO's other accounts:

      1. (A) Providing at all times, from thirty-six months after the time at which the first PRO plan is approved, for the full funding of the activities necessary to perform all of the PRO's obligations during, at minimum, a six-month period, except for its obligations pursuant to paragraphs (1) and (2) of subdivision (e) of section 42064 of the Public Resources Code. Funding necessary to perform the PRO's obligations pursuant to paragraphs (1) and (2) of subdivision (e) of section 42064 of the Public Resources Code shall not be required as part of the Closure Fund, trust fund, or escrow account.

         1. (i) Until the Closure Fund is fully funded thirty-six months after the approval of the first PRO plan, the PRO shall also provide to the Department documentation of a letter of credit maintained by the PRO with a lending institution that would make whole the full funding obligation if the Closure and Transfer Plan is executed.
      2. (B) Existing continuously through to the transfer to the trustee or escrow agent in an account dedicated solely to satisfying the obligations of the PRO during the closure period.
      3. (C) Into which the PRO will deposit moneys allocated to the payment of the PRO's obligations pursuant to paragraphs (1) and (2) of subdivision (e) of section 42064 of the Public Resources Code concerning the annual surcharge, as further specified by the PRO in its Closure and Transfer Plan and these regulations.
   4. (4) An explanation of how the PRO will ensure that, upon the self-execution of the Closure and Transfer Plan, adequate moneys will be available and deposited into the Closure Fund to satisfy its obligations pursuant to paragraphs (1) and (2) of subdivision (e) of section 42064 of the Public Resources Code concerning the annual surcharge, including the PRO's methodology for calculating the adequacy of the moneys.

   5. (5) An explanation of the following:

      1. (A) How the PRO will provide the Department and trustee or escrow agent with all necessary documents and information pursuant to subdivision (b).
      2. (B) The PRO's methodology for its financial computation and modeling assuring fund solvency, including how it calculates the cost of satisfying all of its obligations over a six-month period, except for those obligations specifically identified in paragraph (4) of this subdivision.
      3. (C) The PRO's plans for communicating with Producers, responsible end markets, materials recovery facilities (MRFs), contractors, local jurisdictions, and other key entities about the activation and carrying out of the Closure and Transfer Plan and directing communications to the Department.

   6. (6) A description of how the trustee or escrow agent will perform its tasks and receive payment for its services. The description shall include:

      1. (A) The trustee or escrow agent's scope of work.
      2. (B) The process for revising a trustee or escrow agent's scope of work.
      3. (C) How the PRO and trustee or escrow agent will independently confirm payment of the trustee or escrow agent.
   7. (7) Self-execute on the effective date of dissolution of a PRO or termination of its plan, as noticed to the Department pursuant to paragraph (7) of subdivision (b) of section 18980.8.2, or five calendar days after actual revocation.
   8. (8) Authorization of the trustee or escrow agent's development and implementation, subject to department approval, of adaptive management strategies to ensure that the requirements of the Act are met if specific plan elements conflict with their achievement, including those specific adaptive management authorities specified in subdivision (e) of section 18980.8.1.

2. (b) The PRO shall:

   1. (1) Ensure that all its contracts and other agreements are assignable to and assumable by the trustee or escrow agent, assignable by the trustee or escrow agent to the successor PRO or PROs, and assumable by the successor PRO or PROs.

   2. (2) Provide evidence that, at any given time, the contents of the Closure Fund can fully satisfy the PRO's obligations during a six-month period except those obligations specifically identified in paragraph (4) of subdivision (a). Such evidence shall:

      1. (A) Include financial modeling that assures fund solvency through Closure and Transfer Plan implementation, based on current program activity levels and most recent cost and revenue data.
      2. (B) Be provided to the Department in annual reports and at any time upon the request of the Department.
   3. (3) Notify the Department of any proposed change to its scope of work and seek the approval of the Department.
   4. (4) Notify the Department when changes to its scope of work are finalized.

   5. (5) Notify the Department of any of the following circumstances at the time specified:

      1. (A) Immediately upon discovery that the current contents of the Closure Fund are insufficient to support the estimated cost to fulfill the PRO's obligations identified in paragraph (2) of this subdivision over the next six months.
      2. (B) No more than five calendar days after the PRO determines that the trustee or escrow agent is temporarily or permanently unwilling or unable to carry out its obligations under the Closure and Transfer Plan.
   6. (6) Immediately deposit an amount that will establish Closure Fund solvency if the PRO believes that the Closure Fund is underfunded or if the Department notifies the PRO that it lacks sufficient information to verify the Closure Fund is solvent. If directed by the Department, cease spending until the Closure Fund is solvent.

   7. (7) In the event of the dissolution of a PRO or termination of a PRO's plan, submit to the Department via email a written notice of intent no fewer than 180 days prior to the PRO's proposed date of dissolution or termination. The notice shall include, at a minimum, the following information:

      1. (A) The proposed effective date of dissolution or plan termination, including a description of why the effective date is appropriate.
      2. (B) The PRO's reason for proposing to dissolve or terminate its plan.
      3. (C) A detailed description of how the PRO will implement the plan until the proposed effective date of dissolution or plan termination, and thereafter, how the trustee or escrow agent shall meet the requirements pursuant to subdivision (f) of section 42051.1 of the Public Resources Code.
      4. (D) An explanation of the PRO's outstanding obligations to the Department and key entities and how it will fulfill these obligations prior to the proposed effective date of dissolution or plan termination.
      5. (E) If the Department does not approve the proposal, the PRO may revise its proposal addressing deficiencies identified by the Department and resubmit the proposal to the Department.

   8. (8) The PRO shall notify the Department immediately in any of the following circumstances:

      1. (A) The governing board or members of the organization serving as the PRO, by vote, consent, adoption of resolution, or any other method, take affirmative steps to dissolve the organization.
      2. (B) In pursuit of dissolution, an organization serving as the PRO seeks a waiver concerning dissolution from the California State Attorney General or the Attorney General of the state in which the organization is incorporated or organized.
      3. (C) In pursuit of dissolution, an organization serving as the PRO files documents related to dissolution with the California Secretary of State or any other governmental agency, including tax authorities providing tax clearances and governmental agencies in the state in which the organization is incorporated or organized.

   9. (9) Provide the Department and the trustee or escrow agent with all records necessary to implement the Closure and Transfer Plan, including contract and agreement records, preliminary accounting of the Closure Fund, including its balance, and any other PRO accounts and assets, as well as all necessary contact information for Producers, responsible end markets, materials recovery facilities (MRFs), contractors, local jurisdictions, and other key entities.

      1. (A) Where the Closure and Transfer Plan is being activated due to plan revocation, these records must be provided no later than five calendar days after plan revocation.
      2. (B) Where the Closure and Transfer Plan is being activated due to dissolution or termination, these records must be provided no later than the established termination date.

   10. (10) Immediately upon self-execution of the Closure and Transfer Plan, carry out all actions assigned to it under the Closure and Transfer Plan, unless directed otherwise in writing by the Department, including:

       1. (A) Deposit into the Closure Fund all moneys allocated to satisfy its obligations pursuant to paragraphs (1) and (2) of subdivision (e) of section 42064 of the Public Resources Code concerning the annual surcharge and any unexpended funds.
       2. (B) Transfer the Closure Fund, complete with all funds described in subparagraph (A) of this paragraph, on the execution date of the Closure and Transfer Plan and provide a complete accounting of the fund balance, along with accounts payable and receivable. Thereafter, the PRO shall provide to the Department and the trustee or escrow agent any additional financial information received by the PRO concerning the plan.
       3. (C) Assign all third-party contracts to the trustee or escrow agent contemporaneously with the transfer of the Closure Fund.
3. (c) Annually and as otherwise directed by the Department, the PRO shall confirm the credentials of the initial trustee or escrow agent and successor trustee or escrow agent and their willingness and ability to carry out all duties required by the Act, these regulations, and the Closure and Transfer Plan. The PRO shall furnish the Department with this information. The PRO shall immediately notify the Department if the initial trustee or escrow agent or successor trustee or escrow agent becomes unwilling or unable to serve.

4. (d) The trustee or escrow agent shall:

   1. (1) Notify the Department within five calendar days if it believes that the PRO has breached its contract.
   2. (2) Notify the Department of any proposed changes to its scope of work and seek the approval of the Department.
   3. (3) Receive the Closure Fund on the execution date of the Closure and Transfer Plan and administer it thereafter.
   4. (4) As appropriate, assume or accept the assignment of all PRO contracts and agreements.
   5. (5) Propose adaptive management strategies to the Department for its approval and implement them once approved.
   6. (6) Implement the PRO's most recently approved PRO plan, as augmented by any adaptive management strategies necessary to meet the requirements of the Act, if applicable.
   7. (7) Upon written request, immediately provide to the Department records necessary to determine compliance with the Act and its implementing regulations. At the Department's option, records shall be provided either by allowing physical access during normal business hours to the Department or other duly authorized regulatory agency or by submitting them to the Department by electronic means.
   8. (8) Meet weekly to receive advice on the administration of the Closure and Transfer Plan, unless the Department determines that such meetings are not necessary for the trustee or escrow agent to perform its obligations under this section.
   9. (9) Submit an annual report to the Department that contains the information required by section 42063 of the Public Resources Code and Article 9 of this chapter.
   10. (10) Oversee the dissolution of the trust or escrow account and settle the obligations of the trust or escrow account if the trustee or escrow agent and the Department concur that funds are insufficient to continue the implementation of the Closure and Transfer Plan or if the Department exercises its discretion not to continue the Closure and Transfer Plan.
   11. (11) Transfer all responsibilities to the successor PRO or PROs, if directed by the Department to do so, and assign all contracts and agreements to the appropriate entity, if directed by the Department.

5. (e) The Department may:

   1. (1) Direct the trustee or escrow agent.
   2. (2) Dismiss a trustee or escrow agent.
   3. (3) Appoint a trustee or escrow agent upon its dismissal of a trustee or escrow agent or the trustee's or escrow agent's inability to serve.
   4. (4) During the period from the self-execution of the Closure and Transfer Plan through the approval of a successor PRO's plan, review and approve, if warranted, written requests from the trustee or escrow agent to implement adaptive management strategies pursuant to the PRO's previously approved plan if the requirements of the Act cannot be met without adaptive management.

Note: Authority cited: Sections 40401, 40502, 42056 and 42060, Public Resources Code. Reference: Sections 42051.1 and 42056, Public Resources Code.

History

1. New section filed 5-1-2026; operative 5-1-2026 pursuant to Government Code section 11343.4(b)(3) (Register 2026, No. 19).